S&P 500 at four-year high on economy bets
Business Day - Mar 14th 2012, 09:00
The S&P 500 and Nasdaq hit multi-year highs on Tuesday as US retail sales rose more than forecast last month and as concerns eased about the euro zone’s crisis.
Euro-zone finance ministers gave final approval to a second bailout for Greece, and data in Germany showed analyst and investor sentiment rose significantly more than expected in March.
Data in the United States once again indicated a slowly improving domestic economy, as retail sales recorded their largest gain in five months in February despite rising gasoline prices.
"Europe has improved from a crisis situation to a chronic condition," said Stephen Wood, chief market strategist at Russell Investments in New York. "The data in America continues to grind upward, and investors can more effectively assess risk."
Underscoring the upbeat sentiment, the CBOE volatility index fell to levels not seen since mid-2007. Its 14-day average is at its lowest since last June.
Analysts say the lack of volatility has helped dry up volume, as high-frequency traders see less opportunities for quick gains. But others worry the low volumes point to a lack of commitment to the market that can make it vulnerable.
Monday’s volume of 5,24bn shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq represented the lowest tally of the year and was 33% below last year’s daily average during March.
The Dow Jones industrial average rose 88,32 points, or 0,68%, to 13048,03. The S&P 500 Index gained 9,61 points, or 0,70%, to 1380,70. The Nasdaq Composite added 23,11 points, or 0,77%, to 3006,77.
The S&P 500 index reached it highest intraday level since June 2008, and the Nasdaq Composite hit its highest mark since December 2000.
The PHLX housing sector index hit its highest level since May 2010, and a banking sector index was at a seven-month high.
Later in the session, investors will look to the US Federal Reserve, which is expected to hold steady on monetary policy when it concludes its one-day meeting, acknowledging a mildly brighter economic outlook while refraining from any suggestion that further easing is now off the table.
Fed officials also are expected to nod to the labour market’s stronger pulse in a statement due at about 2:15 p.m. (1815 GMT).
To the extent the market is expecting more quantitative easing form the Fed, "there will be disappointment," said Wood.
"If they are expecting a continuation of policy with no radical changes, they’ll be happy."
Markets were unnerved recently after Fed Chairman Ben Bernanke stopped short of giving a strong signal of more economic stimulus during Congressional testimony.
Despite the upbeat retail data, shares of Urban Outfitters Inc dropped 4,6% to $28,16 after it said it expects margins to continue to be pressured.
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05/12/2012 - 09:15
Johannesburg - Consumer confidence declined during the fourth quarter of 2012, First National Bank and the Bureau for Economic Research's Consumer Confidence Index (CCI) reported on Tuesday.
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US retail sales hurt stocks, while euro falls broadly
17/07/2012 - 08:22
NEW YORK — World stocks slipped on Monday after a surprise drop in US retail sales in June and the euro hit a three-and-a-half-year low against sterling as investors fretted about the delay in making bail-out funds accessible to troubled eurozone states.
Exports save eurozone from recession
07/06/2012 - 08:59
Brussels - The eurozone narrowly escaped technical recession in the first quarter as exports offset a plunge in investment and inventories to produce a flat reading, data showed on Wednesday, but it was unlikely to escape contraction again in the second quarter.