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Forex · News · USMarket

NEWS / USMarket

USmarket Basic stock indexes intend to continue its rally

11:47 01/06/2006

After a little reduction at the beginning of trading session Wall Street has continued its victorious January rally. Thus investors weren’t confused by Wal-Mart Stores Inc. message that for the last quarter of 2005 the retail seller’s profit would be at the bottom border of forecasts.

 

And, even reduction of Boeing and IBM ratings could not lower the investors’ optimism - key stock indexes have overcome an hour trading range in which quotations "stayed" from the end of November, 2005.

 

Let's remind that the indexes have received a powerful impulse to growth from the beginning of the year after the publication of the FOMC minutes of the last meeting therefore among investors there was a confidence of fast end of a cycle of FRS interest rates increase.

"In many respects yesterday and today growth is due to FRS", - FTN Financial senior stock analyst Toni Duajer told.

 

Moreover the indexes have been supported by growing shares of the Internet-companies, and yesterday data, having shown that the ISM index for nonproductive sector of the USA rose to 59,8 points in December, 2005 from November 58,5.

Let's remind that the economists predicted value of the index at a level 59,0 points in November.

Let's notice that value of the indicator above 50 points indicates the rise of sector, below - recession.

The employment index raised to 57,1 points in December from November 57,0. The Price index decreased to 69,5 points from 74,2. The new orders index in service sphere went up to 61,9 points from 59,5.

 

As a result at the tenders on Thursday the growth of technological shares was especially significant. They became the main drivers of January rally.

Thus Dow-Jones and S&P 500 indexes were also in "green", but with modest achievements.

The investors’ buying mood, caused by Consumer Electronics Show in Las Vegas - the largest exhibition of technological achievements, has helped NASDAQ index to grow and rise higher.

Among semi-conductor shares Altera Corp. papers have risen in price on 2.8 % to 19.73 and Broadcom Corp. papers have risen on 3.2 % to 50.11.

The competitor of Altera Corporation - Xilinx Inc. company has raised its forecasts on quarter markets. Shares of this company have jumped on 6 % to 28.55.

And Cisco Systems shares have grown on 2.8 % to 18.35 after Citigroup analysts declared that the company’s incomes could raise in 2006.

 

Dow index can blame two its components for absence of achievements of similar to NASDAQ index: Wal-Mart Stores Inc. and Boeing Co. Banc of America Securities has lowered the aircraft construction rating that caused its decrease on 1.2 % to 70.33.

At the same time the largest retail seller of the USA has informed that the income of last quarter, 2005 will, possibly, be in line with the bottom border of a range of forecasts that has disappointed investors. We shall remind that Wal-Mart shares have fallen on 1.4 % to 45.69.

 

And drop in oil prices has caused sale pressure upon the power companies. So Exxon Mobil papers have dipped on 0.5 % to 58.28. Chevron papers have decreased on 1.2 % to 58.19.

 

As a result Dow-Jones index of New York stock exchange has grown on 2.00 points and was closed at a level 10882.15. NASDAQ index has come up on 13.41 points and is at a level 2276.87. S&P 500 index has risen on 0.02 point and is at a level 1273.48.

Profitability of the US state obligations for 30 years has grown on 0.003 in comparison with the previous closing and makes up 4.547.

 

As a result we recommend to keep opened before purchase of futures for Dow-Jones index from levels 10690. All earlier mentioned purposes of growth hold good.

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