DJ30 PointChange: +179.82 Level: 12397.38 NASDAQ PointChange: +43.57 Level: 2648.72 NQ100 PercentChange: +1.9 R2K PercentChange: +1.5 SP400 PercentChange: +1.0 SP500 PointChange: +19.46 Level: 1277.06 NASDAQ-Adv:1921 Dec: 693 NYSE-Adv:2351 Dec: 695
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
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
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
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.
Materials +3.0%, Financials +2.8%, Energy +2.6%, Industrials +2.1%,
Tech +1.7%, Health Care +1.4%, Consumer Discretionary +0.9%, Telecom
Unchanged: Consumer Staples
Declining Sectors: Utilities -1.7%