US midday: Economic data cheers stocks
May 17, 2013
- Better than expected economic data
- JP Morgan raises year-end target for S and P 500 to 1,715 from 1,580
- Large rise in US dollar index
- Goldman Sachs sees Fed tapering QE in December-CNBC
Dow Jones Industrials: 0.39%
Nasdaq Composite: 0.45%
S&P 500: 0.46%
The main US equity averages were registering moderate gains by midday as traders stepped in after yesterday's late stumble, following erroneous reports - in some media outlets - of important forthcoming policy signals from Fed officials, expected on Friday.
Also helping things along were the better-than-expected readings for the Conference Board's index of leading economic indicators and this morning's preliminary University of Michigan consumer confidence survey data for the month of May.
On the negative side of the ledger were a clutch of negative corporate results out overnight.
Acting as a backdrop, the US dollar index rose to its highest level since mid-2010 on Friday, as US yields turned up in both absolute and relative terms.
Amongst those companies who released weaker than forecast results were fashion retailers J.C. Penney Co. and Nordstroms.
Guidance from technology outfits such as Brocade Communications, Autodesk and Applied Materials also came in below forecasts.
Weapons-maker Northrop Grumman will add $4bn to an existing $1bn share-repurchase program and retire 25% of its shares outstanding by 2015.
From a sector standpoint the best performance is now to be seen in the following industrial groups: Tires (6.18%), Automobiles (2.41%) and Platinum (2.31%).
Better than expected economic figures
The University of Michigan's preliminary reading on US consumer sentiment rose to 83.7 in May, from 76.4 in the month before and versus expectations for a reading of 77.5. Both the current conditions and expectations sub-indices registered large gains.
The Conference Board's index of leading economic indicators rose by 0.6% month-on-month in April, far ahead of the 0.2% rise expected by economists.
Yields bounce back as well
Front month West Texas crude futures rose by 0.85% to the 95.96 dollar level on the NYMEX.
10 year US Treasury yields were up by 6 basis points at 1.94%.