Day Traders Diary
01/25/2012WRAPX End of Day Summary: Market Marches Higher
The broad market was able to fight through moderate selling pressure this morning, but gains didn't come until after the Federal Open Market Committee (FOMC) issued its latest Policy Statement. The afternoon advance eventually gained enough momentum to take the stock market to a new multi-month high.
A blowout quarterly report from Apple (AAPL 446.66, +26.25) helped prop up the Nasdaq and the rest of the tech sector (+1.0%) this morning, but most stocks started the session in the red. Of little inspiration were better-than-expected earnings from Boeing (BA 75.82, +0.46), United Technologies (UTX 77.65, -0.13), and ConocoPhillips (COP 69.98, -0.63) as Europe's bourses traded lower amid further frustration surrounding Greece's failure to compromise with its creditors.
Selling pressure slowly eased, but buyers didn't really step in until the FOMC announced that it will keep the federal funds rate at 0.00% to 0.25%. It also stated that economic conditions are likely to warrant such exceptionally low rates through at least late 2014... The ensuing advance was temporarily interrupted when the Fed disclosed that it now expects GDP for 2012 to grow in a range of 2.2% to 2.7% this year, down from the range of 2.5% to 2.9% that it had stated previously. Fed Chairman Bernanke acknowledged, though, that if inflation remains below target and employment remains slow there is a case for further policy action.
Materials stocks scored some of the strongest gains overall; the sector settled 1.6% higher. Energy stocks were able to turn an early loss of about 1% into a 1.1% gain. Their effort was likely complemented by a climb in commodity prices... General weakness among commodities this morning had the CRB Index in the red, but it was able to swing to a 0.5% gain. The dollar's downturn helped make its climb a little easier.
Treasuries also traded higher today, but they settled shy of their session highs. The yield on the benchmark 10-year Note saw its yield drop below 2.00% before it eventually worked its way back up to that mark.
While stocks, commodities, and Treasuries responded positively to the Fed's commentary, the dollar took a dive. It had been up markedly in morning trade, but was down about 0.5% by session's end.
The first piece of actual domestic data in three days was the latest monthly pending home sales report. It showed that pending home sales for December fell 3.5%, which is slightly steeper than the 3.0% decline that had been generally expected.
Advancing Sectors: Materials +1.6%, Utilities +1.6%, Industrials +1.2%, Energy +1.1%, Tech +1.0%, Consumer Staples +1.0%, Consumer Discretionary +0.7%, Health Care +0.7%, Telecom +0.3%, Financials +0.2%
Declining Sectors: (None)
Dow +0.7%, S&P 500 +0.9%, Nasdaq +1.1%, Nasdaq 100 +1.3%, S&P 400 +1.0%, Russell 2000 +1.0%
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