YAHOO [BRIEFING.COM]: Stocks
started 2012 on a strong note by scoring its best single-session percentage
move in two weeks. The effort took the stock market to a two-month closing
high.
A lack of corporate news and
domestic data ahead of the open left many market participants to take their
cues from foreign averages. Buying abroad was backed by a manufacturing reading
from China that suggested activity began to expand after it had contracted in
the prior month. India also reported its best manufacturing reading in six
months. Manufacturing data from Europe also proved relatively encouraging.
Recent manufacturing activity in the United Kingdom made a modest contraction,
but to a lesser extent than had been anticipated. A reading on eurozone
manufacturing activity was more in-line with expectations.
An advance by the euro also
proved beneficial to stocks. By session's end the euro was sporting a 0.8% lead
against the greenback. Stocks took little time to sprint higher following the
toll of the opening bell.
Collective gains remained
strong, on the order of 2%, following the release of the December ISM
Manufacturing Index, which improved to 53.9 from 52.7 in November. That
exceeded expectations for a reading of 53.4.
Construction spending for
November also proved supportive of early gains. It increased by 1.2%, which
bested the 0.5% increase that had been generally expected after a downwardly
revised 0.2% decline during October.
Financial and materials
stocks, the two worst performing sectors of 2011, led early gains, but the pair
lacked the influence to take the S&P 500 past resistance at its multi-month
closing high of 1285. From there stocks drifted lower before they made a modest
attempt to reclaim gains.
Minutes from the most recent
FOMC meeting failed to have any real influence on action since they offered no
new insight. The minutes indicated that domestic economic activity expanded
moderately despite some apparent slowing in the growth of foreign economies and
ongoing financial difficulties in Europe. Although members of the FOMC
generally continue to believe that the pace economic activity will pick up in
2012 and 2013, a number of members indicated that current and prospective
conditions could warrant additional policy accommodation.
Stocks were unable to return
to session highs, but the major averages still settled with strong gains.
Participants were uninterested in defensive-oriented issues, however. As such,
both the telecom and consumer staples sectors settled only fractionally above
the flat line while utilities lagged the only loss of any sector. In the first
session of 2012 utilities tumbled almost 2% for a poor follow up to 2011; by
climbing close to 15% last year utilities were the best performing sector of
the year.
Commodities also benefited
from a positive bias, which took the CRB Commodity Index 2.6% higher. That made
for its best single-session percentage move in more than three months. Oil was
a strong influence; it climbed more than 4% to settle pit trade only a few
cents shy of $103 per barrel. In addition to a weaker dollar, oil's climb came
in conjunction with aggressive rhetoric from Iran regarding its occupation of
shipping lanes and the presence of the U.S. ships there.
There was a broad based rally
in commodities today, aided by strength in global equity markets and weakness
in the dollar (or corresponding strength in the euro). Gold futures rallied
2.1% to close at $1600.50 per ounce, while silver futures surged 5.9% to settle
at $29.57 per ounce. Copper futures partook in the rally as well, posting gains
of 2.8% to finish at $3.53 per pound.
Crude oil futures posted gains
of 4.2% to settle at $102.96. Aided by the continued saber-rattling in Iran and
the rally in equities, crude futures put in session highs at $103.13, its best
levels since Nov 17, and closed just shy of those levels. Natural gas finished
just above the unchanged mark at $3.00 per MMBtu. In morning trade, nat gas
priced dipped to a fresh 28 month low at $2.94. They managed to rebound off
those lows to recoup their losses.
Advancing Sectors: Materials +3.0%, Financials +2.8%,
Energy +2.6%, Industrials +2.1%, Tech +1.7%, Health Care +1.4%, Consumer
Discretionary +0.9%, Telecom +0.1%
Unchanged: Consumer Staples
Declining Sectors: Utilities -1.7%DJ30 +179.82 NASDAQ +43.57
NQ100 +1.9% R2K +1.5% SP400 +1.0% SP500 +19.46 NASDAQ Adv/Vol/Dec 1921/1.66
bln/693 NYSE Adv/Vol/Dec 2351/851 mln/695