News Column

Strong Confidence Data Contributes To Strength On Wall Street - US Commentary

July 29, 2014

WASHINGTON (Alliance News) - Stocks have moved mostly higher in early trading on Tuesday after ending the previous session roughly flat. The major averages have climbed into positive territory, although there does not seem to be much conviction behind the upward move.

Currently, the major are posting moderate gains, not far off their highs for the young session. The Dow is up 67.77 points or 0.4% at 17,050.46, the Nasdaq is up 22.23 points or 0.5% at 4,467.13 and the S&P 500 is up 5.22 points or 0.3% at 1,984.13.

The early strength on Wall Street is partly due to the release of a report from the Conference Board showing a much bigger than expected improvement in consumer confidence in the month of July.

The Conference Board said its consumer confidence index surged up to 90.9 in July from an upwardly revised 86.4 in June.

Economists had been expecting the index to inch up to a reading of 85.4 from the 85.2 originally reported for the previous month.

With the much bigger than expected increase, the consumer confidence index reached its highest level since hitting 95.2 in October of 2007.

The markets have also reacted positively to the latest batch of earnings news, with drug giant Merck (MRK) moving notably higher after reporting better than expected second quarter results.

Nonetheless, trading activity has remained somewhat subdued as traders look ahead to the Federal Reserve's announcement of its latest monetary policy decision on Wednesday.

The Fed is widely expected to announce another USD10 billion reduction in the pace of its asset purchases, slowing the pace of purchases to USD25 billion a month.

Traders are likely to pay close attention to the Fed's accompanying statement, looking for indications regarding the outlook for interest rates.

Telecom, biotechnology, and housing stocks have moved significantly higher in early trading, while most of the other major sectors are showing only modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan'sNikkei 225 Index rose by 0.6%, while Hong Kong'sHang Seng Index advanced by 0.9%.

The major European markets have also moved to the upside on the day. While the UK'sFTSE 100 Index has climbed by 0.6%, the German DAX Index and the French CAC 40 Index are both up by 0.8%.

In the bond market, treasuries have given back ground after an early upward move but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.7 basis points at 2.474%.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Alliance News

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters