Is this the calm before the storm or after the storm. That’s what investors and analysts seemed to be debating on Tuesday. Tuesday was a mixed day for stock market with the indices increasing at time and falling later clearly showing that investors are being cautious after Monday’s rally when the Dow reached its highest level in 13 months. On Tuesday indices more or less settled in a mixed fashion. The Dow Jones industrial average finally closed at 10,246.97 up by 20 points.

Other important indices like S&P and Nasdaq Composite however showed a marginal decline. The S&P 500 declined by 1 point to end at 1,093.01 while the Nasdaq composite declined by 3 points to close at 2,151.08. This was expected as after a rally like on Monday there are normally pullbacks. Many analysts feel that this lack of direction in the market is mainly on account of no major economic news this week as investors wait for the big news to come. The markets is expected to remain in a close range until the next Federal Reserve policy-setting meeting on Dec. 16 where some fireworks are expected.

As mentioned in our yesterday’s briefing on Monday Dow increased by 204 points to reach 2009 high. This was mainly on account of G-20 countries decision to continue with economic stimulus which investors took as an indication of low interest rates in the future.

Investors and analysts are arguing whether the current rally in stock is warranted on fundamentals. There is still debate raging among economist as to whether we are out of recession to support such a rally. Majority of economist however agree that the economy is definitely showing some signs of recovery and the US economy may soon be on a growth path.

In Global markets Asian shares closed at a slightly higher level. European stocks registered a slight decline from Monday. In the currency market dollar finally increased from its 15 month low increasing marginally against the Euro and British pound. With a strengthening dollar, price of crude oil declined by 38 cents to close at $79.05 a barrel.

Sectorally material stocks registered a modest gain of 0.2%.The advancing sectors on Tuesday also included Health Care which registered a gain of +0.5%, Utilities which registered a gain of +0.3%, Materials which registered a gain of +0.2%, Consumer Discretionary which registered a gain of +0.1% and Consumer Staples which registered a gain of +0.1%. Financials (-0.5%) and Industrials (-0.3%) were among the sectors that showed a decline. Energy, technology and telecom stocks showed no change.

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