S&P Takes The Show – Close At 1,100 Points
Stock markets reached new high on Monday on the back of weak US dollar and Fed chairman Ben Bernanke comment that the interest rate will continue to be low as the economy recovers. Dow increased by 136 points(1.3%) to close at 10,406.96 points which is the highest level since October 2008. S&P increased by 15.8 points(1.8%) to end at 1,100 points. The Nasdaq increased by 30 points (1.4%) to close at 2,197.5 points.
Energy and Material stock gained the maximum in Monday’s rally with both of them increasing by 2.5% and 2.3% respectively. Commodity prices were helped by weak dollar with gold and oil in particular gaining. Crude oil prices increased by 3.4% to close at $78.94 per barrel. Gold touched another record high of $1143.40 per ounce before finally settling down at $1139.20 per ounce recording a gain of 2%.
The other advancing sectors on Monday includes Industrials (gain of 2.0%), Consumer Discretionary (gain of 1.7%), Health Care (gain of 1.4%), Utilities (gain of 1.3%), Financials (gain of 1.2%), Technology (gain of 1.0%), Telecom (gain of 0.8%) and Consumer Discretionary (gain of 0.7%)
Many analysts feel that the market seems to be focussed on weak dollar with every decline in dollar pushing the market up. On Monday the dollar fell by 0.3% to 74.94 to reach a 15 month low against a basket of currencies.
S&P touching the 1,100 level was clearly the news on Monday. With the Dow sitting steadily above the 10,000 level the attention is clearly on the other high profile index S&P. Analyst perceive 1,100 points on S&P as an indicator of further gains in the market.
Also the current stock market high is being taken as an indicator that the market is convinced that economic recovery is underway. In fact this positive sentiment was further reinforced by Fed chairman Ben Bernanke comment that financial conditions are much better than last year. He however also warned that the constrained bank lending and the weak job market are still big deterrents and the growth is not like to be as robust as we are expecting. He also reinforced that interest rates will continue to remain low. The fed also underlined that it will continue with its dual programme of generating maximum employment and price stability.
There were lot of other good news also that probably helped the market. According to census bureau data in October retail sales increased by 1.4% from September as against the forecasted increase of 0.9% .In comparison in September retail sales had declined by 1.5%. The latest numbers clearly show that the consumer sentiment which is so vital for economic recovery has improved.
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