Looking very good for today on ASX!
Symbol Last Change
Dow 12,673.68 +51.99 (0.41%)
Nasdaq 2,468.38 +4.45 (0.18%)
S&P 500 1,445.94 +7.70 (0.54%)
10-Yr Bond 4.8370% +0.0110
NYSE Volume 2,914,890,000
Nasdaq Volume 2,234,755,000
NY time 4:20 pm :
The Stock Trader’s Almanac states that, “as the S&P goes in January, so goes the year.” Well, with the S&P 500 briefly slipping into negative territory for 2007 last Friday but rallying into the end of the month to finish up 1.4%, that momentum carried over into Thursday’s session, jumpstarting what is historically a flat month for equities.
Strong leadership from several key sectors, especially Industrials, contributed to the bullish disposition that left the Dow at a new record high. Raytheon (RTN 52.55 +0.65) becoming the second defense contractor in as many days to post strong Q4 results prompted follow-through buying in Boeing (BA 91.05 +1.49). The Dow component surged 1.7% to a new all-time high.
More notable was the economically-sensitive sector’s ability to look past a discouraging update about manufacturing conditions. The January ISM index unexpectedly fell to 49.3%, indicating contraction, which ran counter to a Fed directive that showed firming economic growth a day earlier. The disappointment initially left investors questioning the validity of Wednesday’s rally that we still believe was overdone considering the Fed’s continued talk about tightening.
Be that as it may, investors eventually rallied around an earlier report that reinforced the Fed’s view of moderating inflation pressures. Before the bell, the Commerce Dept. reported only a 0.1% rise in the core PCE deflator — the Fed’s favored inflation measure. While the January data left the year/year increase steady at 2.2%, still probably above where the Fed would like to see it, the rate of increase slowing over the last three months offered some added relief on the market’s current focus — inflation.
The Industrials sector’s best performer, though, was American Standard (ASD 53.14 +3.75), which soared more than 7% to a record high after posting a 77% rise in Q4 earnings and saying it will split into three different businesses. The Dow Jones Transportation Average eclipsing the 5,000 mark for the first time since May, getting a boost from falling oil prices, provided additional support Industrials.
With regard to crude, the Energy sector’s resilience in the face of a 1.4% pullback in oil was also noteworthy. After surging nearly 8% over the last two days, crude for March delivery closed lower at $57.30/bbl in sympathy with a decline in natural gas futures following bearish supply data. Exxon Mobil (XOM 75.08 +0.98) said that it earned $39.5 bln in 2006, the largest profit ever for a U.S. company. Valero Energy (VLO 56.03 +1.75), which also handily topped Wall Street expectations, got an additional lift as it weighed the possible sale of an Ohio refinery.
The Financials sector also showed its buoyancy, as an increase in borrowing costs was overshadowed by Lehman Brothers’ (LEH 85.04 +2.80) plan to buy back nearly 20% of its stock.
Of the two sectors trading lower, the absence of leadership from Technology was the only reason the indices didn’t turn in an even better performance. Google (GOOG 481.75 -19.75) failed to impress shareholders with a report that still showed Q4 profits nearly tripled. A change in sentiment as to what Michael Dell’s return as CEO to the company that bears his name — Dell (DELL 23.80 -0.42) — also weighed on the influential sector. BTK +1.3% DJ30 +51.99 DJTA +1.7% DJUA 0.8% DOT +0.6% NASDAQ +4.45 NQ100 -0.1% R2K +0.9% SOX +0.8% SP400 +0.9% SP500 +7.70 XOI +1.3% NASDAQ Dec/Adv/Vol 1086/1952/2.15 bln NYSE Dec/Adv/Vol 881/2405/1.66 bln