Week Starts On A Positive Note

The week started on a positive note with Dow reaching its highest level in more than a year. The markets were helped by a strong housing report and increase in commodity prices.

The Dow Jones industrial average increased by a huge 133 points( 1.2%) to end at 10,450.95 points. This is Dow’s highest level since October 2, 2008. In early trading Dow increased by 177 points to reach 10,495.61 which is the highest trading level since Oct. 3, 2008. Other indices also showed an increase.  The Nasdaq increased by 30 points (1.4%) to close at 2,176.01.The S&P 500 increased by 15 points(1.4%) to close at 1,106.24. Since reaching its 12 year low on March 9 the Dow has increased by approximately 60% while Nasdaq and S&P have increased by 69% and 64% respectively.

Sector wise all sectors registered gain on Monday with Telecom, Technology and Energy gaining the most of 1.6%. Other sectors that gained include Industrials (gain of 1.5%), Financials (gain of 1.5%), Utilities (gain of 1.4%), Health Care (gain of 1.1%), Consumer Staples (gain of 1.0%), Consumer Discretionary (gain of 0.9%) and Materials (gain of 0.9%)

Markets on Monday were helped by a favourable home sales number for October. As per data from National Association of Realtors existing home sales in October increased to the highest level since February 2007. Sales increased by 10.1% in October to a seasonally adjusted annual rate of 6.1 million units as against 5.54 million units in September. This is also against an expectation of 5.7 million unit sale in October. The increase in sales is mainly on account of incentives offered like tax advantage for first-time homebuyer. This scheme which was supposed to expire by the end of November has now been extended till end of April 2010 and will now cover a broad range of buyers.

Last week markets were down for the last three consecutive days as investors felt that the market had increased too much without the right fundamentals. Overall November has been a good month for stock market with S&P increasing by approximately 6%.

Going forward the market is waiting for reports on housing and consumer confidence and revised GDP numbers which will be released on Tuesday. Economic news more or less has been driving the market with investors looking at economic news to get an idea as to whether the economy is on a recovery path.

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