Thursday, May 19, 2011

Dow Jones Up 81 Points, Snapping Three Straight Losses, 19-05-2011

Wall Street outlook:Dow Jones up 81 points, snapping three straight losses

U.S. overnight markets snapped its recent losing streak following a rebound in commodity prices. Material and energy stocks were the biggest gainers as crude oil +3% to settle back above $100/barrel alongside a broad commodities rally after a 2 week sell off, for the first time in a week after a report showed U.S. inventories held steady last week. Overall sentiment however remained lackluster with modest trading volumes as concerns on the global economy about the euro-zone debt and a slowing economy continue to lurk at the back of investors' minds. The Dow Jones Industrial Average rallied 80.60 points, or 0.7%, to 12,560.18. The S&P 500 jumped 11.70 points, or 0.9%, to 1340.68.

However, these concerns subsided following Dell’s strong earnings and Fed's April minutes that it is in no hurry to tighten monetary policy even as they held detailed exit-strategy talks.

Most Federal Reserve officials prefer to raise rock-bottom interest rates before selling assets when the time comes to tighten policy, restoring their main tool for managing the economy, according to Apr meeting minutes. The minutes also showed worries about inflation rising among Fed officials last month before a big surge in oil prices subsided. During an extensive discussion of how the central bank might pull back its massive support for the world's largest economy, officials indicated unloading the mortgage debt the Fed piled on during the financial crisis would be a priority in eventually shrinking the Fed's US$2.7tr balance sheet.

Daily Dow Jones: A Closed Above Mid Bollinger Band Could Signal More Upside Bias Ahead.


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