Stock Market Today 2/2/10
US Market
Stocks Rally Following Pending Home Sales Report
Stocks have shown a strong upward move in mid-morning trading on Tuesday, shaking off a lackluster start after the National Association of Realtors reported that pending home sales stabilized in December. The major averages are all in positive territory, recovering further from last week’s two-month lows.
NAR said pending home sales, a leading indicator of activity in the housing sector, rose by 1.0 percent in December following a revised 16.4 percent decrease in November. Economists had been expecting pending home sales to increase by about 1.1 percent.
Lawrence Yun, NAR chief economist, said, “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded.”
“These swings are masking the underlying trend, which is a broad improvement over year-ago levels,” he added. “December activity was the fifth highest monthly tally in two years.”
The markets are also keeping an eye on Paul Volcker, the head of the President’s Economic Board, as he testifies on Capitol Hill regarding regulations to limit high-risk bank activities.
Meanwhile, Treasury Secretary Tim Geithner is fielding questions from the Senate Finance Committee regarding the 2011 budget.
Auto sales from major automakers for the month of January may also garner market attention as they are released over the course of the day.
The major averages have all seen substantial upside in recent trading, reaching new highs for the session. The Dow is currently up 70.43 at 10,255.96, the Nasdaq is up 11.32 at 2,182.52 and the S&P 500 is up 8.05 at 1,097.23.
Sector News
Benefiting from the pending home sales data, housing stocks are seeing a strong outing, driving the Philadelphia Housing Sector Index up by 4.5 percent. With the advance, the index continues to recover from the one-month low set in mid-January.
Airline stocks are also on the rise, with the NYSE Arca Airline Index posting a gain of 2.6 percent. The index is continuing to recover from Friday’s six week closing low.
Computer hardware, brokerage, steel and electronic storage stocks are also rebounding from last week’s lows, while trucking have moved modestly lower on the day.
(Source: iHub World Daily Briefing)
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