Two-day advance wipes out last week's losses
US stocks ended with good gains once again on Tuesday, 18 June 2013. Stocks stocks rallied on Tuesday, with a two-day advance wiping out last week's losses, as Wall Street gave an advance thumbs up to the upcoming Federal Reserve monetary-policy announcement. The Federal Open Market Committee begun its two-day meeting on Tuesday, with a monetary-policy announcement and Bernanke's news conference due on Wednesday.
For the day, the Dow ended higher by 138.38 points, or 0.91%, at 15,318.23. The S&P 500 added 12.77 points, or 0.8%, to 1,651.81. The Nasdaq Composite rose 30.05 points, or 0.9%, to 3,482.2.
Industrials paced sector gains that included all but one of its 10 industry groups. 28 of 30 Dow components advanced led by GE.
General Electric settled higher by 2.4% after forging a strategic partnership with Accenture.
The market place anxiously awaited the results of the two-day meeting of the U.S. Federal Reserve's Open Market Committee (FOMC) that began Tuesday morning and concludes Wednesday afternoon. Fed Chairman Ben Bernanke will also hold a press conference following the FOMC meeting. Traders and investors will be looking for fresh information from the Fed on if, when and by what degree it will start to wind down its quantitative easing programs that have been in place for several years.
In other news, the Euro currency got some support on Tuesday from a better-than-expected German ZEW consumer confidence survey for June. The survey also saw respondents reckon that German economic activity would pick up as the year progresses. The Japanese stock market was slightly lower in quieter trading on Tuesday. The world is keeping a closer eye on Japan's Nikkei stock index, thinking it could be a leading indicator of what is to come for the other major world stock markets.
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Regarding economic data expected at Wall Street, new home sales for the month of May hit an annualized rate of 914,000, which was short of the 950,000 expected by the consensus. Notably, single-family starts increased a minuscule 0.3% in May from 597,000 in April to 599,000. The lack of solid rebound after 4.2% decline in April could signal a slowdown in overall construction levels.
Separately, consumer prices increased 0.1% in May, which was the first increase since February after prices fell 0.2% in March and 0.4% in April. The consensus expected the CPI to increase 0.2%. Surprisingly, the higher-than-expected food and energy prices from the May PPI did not pass through to consumer prices.
Crude-oil prices ended moderately higher on Tuesday, 18 June 2013 at Nymex. Prices rose as Mideast tensions supported prices, but then built on their gains in electronic trading after the first release of weekly supply data. Light and sweet crude for July ended higher by $0.67 (0.7%) at $98.44 a barrel on the New York Mercantile Exchange on Tuesday.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.2% on Tuesday.
Bullion metal prices ended substantially lower on Tuesday, 18 June 2013 at Comex. Comex gold futures prices ended the U.S. day session lower as traders focused on the possibility the U.S. Federal Reserve will signal that it's prepared to slow the flow of monetary stimulus.
Gold for August delivery ended lower by $16.2 (1.2%) at $1,366.9 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. July silver ended lower by $0.08 cents (0.4%) at $21.68 an ounce on Tuesday.
For every stock falling, more than two gained on the New York Stock Exchange, where 634 million shares traded. Composite volume topped 3 billion.
Indian ADRs ended lower on Tuesday. In the IT space, Infosys was down 1.6% and Wipro was down 0.9%. In the Banking space, HDFC Bank was down 2.7% and ICICI Bank was down 2.1%. In the Telecom space, Tata Communication was down 0.9%. In other space, Tata Motors was down 1.6%, Dr Reddys was down 0.7% and Sterlite was down 0.35%.
For tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while the FOMC decision is set to cross the wires at 14:00 ET.
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