Jan

03

Sentiment Evenly Poised Amid Uncertainties

Tagged Under : Sentiment, Sentiment Poised

– The major U.S. index futures are pointing to a modestly higher opening on Thursday, with sentiment wobbly amid the uncertainty surrounding how the debt crisis in Europe will pan out. That said, the negativity has been mitigated by the release of some positive economic data recently, especially from the U.S. A Labor Department report released earlier in the day showed that jobless claims unexpectedly fell, while a separate report showed that the third quarter GDP growth estimate was downwardly revised.

The dollar has regained some ground amid the fluid situation, suggesting that risk appetite is on the wane. The markets may also focus on the consumer sentiment report to be released shortly after the markets open.

After spending much of Wednesday’s session below the unchanged line, the major averages pared back their losses in afternoon trading before closing on a mixed note. A European Central Bank move to extend long-term loans to the region’s financial institutions did not cut much ice with investors and instead triggered anxiety after it was reported that a large number of banks flocked to take advantage of the financing. Additionally, disappointing earnings from Oracle (ORCL) also weighed on the markets.

The Dow Industrials ended up 4.16 points or 0.03 percent at 12,107 and the S&P 500 Index added 2.42 points or 0.19 percent before closing at 1,244, while the Nasdaq Composite Index closed at 2,577.97, down 25.76 points or 0.99 percent.

Twenty of the thirty Dow components closed higher, with Boeing (BA), Chevron (CVX), General Electric (GE), Coca-Cola (KO) and Travelers Companies (TRV) among the biggest advancers. On the other hand, Cisco Systems (CSCO), IBM (IBM), Microsoft (MSFT) and United Technologies (UTX) declined sharply.

Utility, oil, banking and housing stocks were among the best performing sectors of the session, while technology stocks came under selling pressure on Oracle’s (ORCL) disappointing earnings.

On the economic front, the National Association of Realtors reported that existing home sales rose 4 percent month-over-month to a seasonally adjusted annual rate of 4.42 million units in November. Single-family home sales rose 4.5 percent, while condominium sales were almost flat. Inventories measured in absolute terms fell 5.8 percent, while in terms of months of supply, inventories fell to 7 months from 7.7 in October. Distressed sales accounted for 29 percent of total sales compared to 28 percent in October, while first time buyers accounted for 35 percent of the total.

Commodity, Currency Markets

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