The bulls appear to be out of breath after a five-day winning streak but stocks are starting to rebound off the intraday lows. Buyers might still be able to lift markets to six in a row. There was plenty of positive news today. U.S. consumer confidence came in better than expected. China released positive economic data. FedEx (FDX) raised their earnings guidance. Meanwhile the U.S. dollar is still falling and that's giving gold a boost, which is now trading over $1,006 an ounce. Oddly enough crude oil is ignoring dollar weakness and has reversed sharply lower, down more than $2.50 toward $69.30 a barrel.
China stole the spotlight for the Asian markets. Banking stocks led the rally thanks to news that lending for the first eight months of 2009 hit 8.15 trillion yuan. The Chinese government's target for the whole year was 5 trillion. Factory output soared 12.3% in August compared to a year ago. Retail sales in China climbed 15.4%. Yet exports fell for the tenth month in a row. Investors reacted with more buying pressure. The Shanghai index gained 2.2% and posted a 4.5% rally for the week. The Hong Kong Hang Seng rose 0.4% and marked a 4.2% gain for the week. The Japanese markets were quiet. September futures and options expired today for Japanese investors and the NIKKEI index settled with a 0.6% decline. Speaking of quiet the European markets were quietly higher. The English FTSE rose 0.4%. The German DAX gained 0.5%. The French CAC-40 rallied 0.78%.
Here in the states the big news was better than expected consumer confidence numbers. Economists were expecting consumer confidence to rise from 65.7 in August to 67.5 in September. The Reuters/University of Michigan consumer confidence index actually jumped to 70.2 for their preliminary read in September. Looking inside at some of the components the current conditions gauge rose from 66.6 to 71.8. The consumer expectations for the next six months component rose from 65 to 69.2. Consumer spending accounts for nearly 70% of the U.S. economy thus rising confidence is very healthy for the economy and the stock market.
The Commerce Department released their wholesale inventories data this morning. Economists were looking for inventories to fall 1.0% from June to July. The government reported a 1.4% decline to $387.2 billion. This is the lowest level since September 2006 and marks the 11th monthly decline in a row. This can be viewed as good news since businesses will need to start replacing inventories soon, which will fuel a restocking phase for the economy.
Another read on the health of the economy came from package delivery firm FedEx (FDX). The Memphis, Tennessee-based company raised its earnings guidance for the current quarter from 30-to-45 cents to 58 cents. Analysts were expecting FDX to report a profit of 44 cents per share. The company is due to report its first quarter earnings on September 17th. FDX also raised its second quarter guidance to a range of 65-95 cents versus estimates at 70 cents. The stock is up more than 5% on the news near $76.50.
Overall the market is mixed. The best performers are gambling, transports and mining stocks. Transports are getting a boost from FDX and a drop in oil. Mining stocks are rising thanks to new highs in gold. The worst performers are semiconductors and housing stocks. Currently the S&P 500 index is off about three points at 1041. The NASDAQ composite is off less than eight points at 2076. The Dow Industrials are down just over forty points at 9585. The small cap Russell 2000 index is down less than three points at 592.
Let's take a quick look at charts for the major averages:
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
Glancing over the OptionInvestor.com play list for movers today I see that ATI is breaking out to new relative highs with a 1.6% gain. ATI has hit our first target to take profits at $33.85. FDX has exceeded our first target to take profits when it gapped open higher this morning. GWR almost hit our target this morning. OXY has exceeded our first target to take profits this morning at $77.00.
Today marks the 8th anniversary of the 9/11 attacks on New York. I want to say "thank you" to all the brave men and women in the military, the fire departments, and police forces across the nation, who put their lives at risk everyday to protect us.