US Stock Indexes Up Modestly On Light Volume

Posted by: : Paul EbelingPosted on: January 21, 2015 US Stock Indexes Up Modestly On Light Volume
 

US Stock Indexes Up Modestly On Light Volume

$SLX, $ASML, $CREE, $IBM, $NFLX

DJIA -1.5% YTD, NAS 100 -1.5% YTD, S&P 500 -1.3% YTD, Russell 2000 -3.2% YTD

DJIA +39.05 at 17554.28, NAS 100 +12.58 at 4667.42, S&P 500 +9.57 at 2032.12

Volume:  trade was below average with 750-M/shares changing hands on the NYSE.

US stock indexes saw the 3rd straight advance Wednesday with the S&P 500 + 0.5%. This ahead of  policy meeting at the European Central Bank Thursday morning. The Bank of Japan lowered its inflation outlook to 1.0% from 1.7%, which boosted the Yen (117.80).

The Bank of England minutes surprised, as Messrs. McCafferty and Weale rejoined the majority in their belief that hiking rates too early would prolong the period of low inflation. The newfound Dovish ilk at the BOE helped UK’s FTSE spike 1.6%.

Global stocks came off their lows in reaction to reports indicating the European Central Bank is set to propose EUR50-M monthly in asset purchases through 2017. EUR ended the day near 1.1590 Vs USD. In a surprising move, Germany’s 10-yr note sank, sending the benchmark yield higher by 7 bpts to 0.47%.

The Bank of Canada surprised with 25-bpt cut to 0.75% in response to diving Crude Oil prices, which are expected to put downward pressure on Canadian inflation. The Loonie retreated to its lowest mark since early Y 2009, sending USD/CAD to 1.2330 from 1.2070.

All 10 S&P 500 stock sectors posted gainer on the day

The energy stock sector (+1.8%) led the session. The hammered sector was able to trim its January loss to 2.8% with help from Crude Oil, which rose 2.7% to 47.78bbl. The materials (+1.0%)—followed with steelmakers underpinning the move. The Market Vectors Steel ETF (NYSEArca:SLX 33.38, +0.68 gained 2.1%.

The remaining cyclical stock sectors finished mixed with respect to the broader market.

Industrials (+0.7%) and consumer discretionary (+0.6%) outperformed with the latter receiving a boost from above consensus earnings reported by Netflix (NASDAQ:NFLX) 409.28, +60.48.

The financials (+0.2%) and technology stock sectors (+0.2%) were laggards.

The tech sector could not keep pace with the market due to a 3.1% loss in the shares of IBM (NYSE:IBM)  152.09, -4.86 after it missed revenue estimates and issued disappointing guidance. Chipmakers rallied behind better than expected results from ASML (NASDAQ:ASML) 106.59, +2.78) and Cree (NASDAQ:CREE) 33.88, +1.54. The broader PHLX Semiconductor Index advanced 1.1%.

On the countercyclical side

The utilities stock sector (+1.0%) extended its January advance to 4.3%, consumer staples (+0.3%), telecom services (+0.2%), and healthcare (+0.1%) under performed the broad market.

US Treasuries made their highs early, and faded in afternoon action. As a result, the 10-yr yield rose 6 bpts to 1.86%.

Economic data

  • Led by a large increase in single-family construction, new housing starts increased 4.4% in December to 1.089 million from an upwardly revised 1.043-M (from 1.028-M) in November
  • The weekly MBA Mortgage Index spiked 14.2% to follow last week’s 49.1% spike.

Thursday

Weekly Initial Claims will be released at 8:30a EST (consensus 302,000), the FHFA Housing Price Index for November will cross the wire at 9:00a EST.

Stay tuned…

HeffX-LTN

Paul Ebeling

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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