S&p Looking To Reverse Trend This Pm
The S&P 500 suffered a second straight decline yesterday, but stocks bounced back in convincing fashion on Tuesday, led by energy companies.
By Peter Martin
Tuesday, September 16, 2014 - 00:00
Energy stocks have endured a rough patch in recent trading days, but have been boosted today by a sharp rise in the price of crude oil. US crude oil futures have gained more than 2%, joining Brent crude’s rally after OPEC’s secretary general said the cartel could trim its production quota by as much as 500,000 barrels a day next year. US crude oil futures were as high as $107 a barrel in the summer, but have tumbled since then to under $95 a barrel.
By mid-afternoon in New York, the Dow Jones Industrial Average was up 0.75% or 128 points at 17,159, while the broader-based S&P 500 index rose even more sharply, gaining 0.86% to break above the 2000 mark once again. The NASDAQ 100, which began the week with a heavy fall, bounced back 0.88% to 4065.5. The tech-heavy index’s big decline on Monday was speculated to have been caused by investor’s getting ready to plow cash into the much-anticipated Alibaba ($BABA) IPO set for later this week, but that theory doesn’t seem to hold in light of today’s strong advance, with NASDAQ high-flyers Facebook ($FB) and eBay ($EBAY)both climbing more than 1% on Tuesday.
As the Fed began the first day of its two-day FOMC meeting (the decision is due for 14.00 ET Wednesday) the latest economic data shows food and energy prices softening at the wholesale level, with prices as a whole unchanged. The Producer Price Index for final demand showed no change month-on-month in August, which was in line with expectations, slowing down after a 0.1% rise in July. The index rose 0.3% for services, but declined 1.5% for energy and 0.5% for food.
We will have a chance to see the latest numbers for inflation at the consumer level tomorrow with the pre-market release of the August CPI. Once again, no change is expected. CPI slowed to a change of just 0.1% in July after a 0.3% rise in June. Should expectations prove to be correct and no change is the actual result for August it will feed into a growing concern that, if anything, we should be worried about inflation being too low. With the Fed on a path to end stimulus in the next few months, it will be interesting to hear what Fed Chief Janet Yellen has to say about the inflation outlook, especially post-stimulus.
This information has been prepared by Nadex, a trading name of North American Derivatives Exchange, Inc., prepared by independent third parties contracted by Nadex or reproduced form third party news agencies. In addition to the disclaimer below, the material on this page does not contain an offer of, or solicitation for, a transaction in any financial instrument. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.