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Forex · News · USMarket

NEWS / USMarket

USmarket Force of resistance of key levels assumes realization of down correction.

11:47 10/20/2006

Last months the American stock market shows surprising stability to negative factors and obstinate desire to grow upwards regardless of anything.

 

As a result the oldest index Dow Jones Industrial Average became the champion on establishment of records. We remind that for last thirteen trading sessions the new historical maximum was established already nine times!

And, on Thursday, on 19-th of October, DJIA fixed above a psychological level -12 thousand points.

 

It is remarkable that despite strong resistance the index overcomes a psychological level in the form of round figures. Such events attract new players and raise investors’ confidence to the market.

 

Let's notice that contradictory fundamental macroeconomic data, pointing out unconditional slowdown of economic growth, could not constrain growth of key stock indexes.

So, data on jobless claims in the USA for a week by 14.10 were much better than the forecast and reached a minimum level since July. We remind that value of the parameter made 299 thousand, at the forecast 308 thousand. And the previous value is revised from 308 thousand up to 309 thousand.

 

Another important parameter - the index of leading indicators in the USA made +0.1 % for September, at the forecast of +0.3 %, and the previous value -0.2 %.

However the most unexpected for the market’s participants became the data of publication of Philadelphia FED index for October which were not only considerably below the expected level, but also a second straight month were in negative area.

Value of the parameter made -0.7, at the forecast 7.0, and the previous value -0.4.

 

After this publication in the market again there were talks that FOMC following step at the meeting, which takes place next week, the decision not about increase of the basic interest rate, and, on the contrary, about its decrease can be made.

This fact has emboldened more bull investors.

 

From corporate events there became unexpected revival of building sector, which in October started to show restoration,.

So, the largest building companies raised noticeably the capitalization that attracts new investors.

Let's remind that results of yesterday's tenders of some large building firms were as follows: Beazer Homes +1,9 %; Toll Brothers + 1,8 %; KB Homes + 1,5 %; Lennar Corp. + 0,5 %.

 

The reason of growth of papers of oil-and-gas sector were expectation that OPEC members will agree about decrease in oil production. We remind that after Saudi Arabia supported the decision of other OPEC members on decrease in oil production by 1 million barrels a day, oil futures rose in price $0,85 and were closed at a level $58,50 a barrel.

As a result papers of oil-and-gas miners Apache and Chevron grew +3,12 % and +1,61 % accordingly, having added $2,03 up to $67,13 and $1,04 up to $65,64.

And GlobalSantaFe Corp. And Noble Corp.shares, rendering holing services, rose in price 4,59 % and +5,42 % accordingly, having added $2,26 up to $51,54 and $3,51 up to $68,26.

 

On the other hand, after a rise in prices on precious metals, indexes were supported by growth of papers of the companies, operating in the given direction.

So, Universal Stainless and Alloy Products papers hiked at once +19,28 %, having added $5,03 up to $31,12 for a share.

RTI International Metals, Glamis Gold and Agnico Eagle Mines also increased their capitalization, added +4,63 %, +6,00 % and +4,17 % accordingly, having grown $2,44; $2,24 and $1,33.

 

After largest world on-line shop ?Bay Inc. informed that on results of the third accounting quarter the profit was up 10 %, and sales grew practically by third basically owing to growth of volumes of electronic payments, its shares jumped up 7 %.

As a result parameters of the company surpassed analysts’ expectations that became the reason of hike of shares. We remind that the maximum of trading session shares reached a level $30.42.

 

As a result Dow-Jones index of New York stock exchange was up 16.65 points and is at a level 12009.33. NASDAQ index rose 2.26 points and is at a level 2339.41. S&P 500 index grew 0.65 point and is at a level 1366.61.

And 30-years US Treasury notes’ yield was up 0.018 in comparison with the previous closing and makes 4.910.

 

We recommend while to be outside the market. Force of resistance of key levels assumes realization of down correction then there are possible long-term purchases of futures for Dow-Jones and S&P 500 indexes.

 

 

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