The rally resumed on Monday with the stock market hitting new 52-week highs. Instead of selling the news investors are buying Friday's jobs report that came in less than expected. Positive pending home sales and a better than expected ISM services number this morning helped fuel the bullish mood. Commodities are rising too as they ignore a bounce in the U.S. dollar. Crude oil is up more than 2% nearing $86.60 a barrel. Gold futures are up fractionally near $1,127 an ounce. Copper hit a new 52-week high with a 1.2% gain near $3.63 a pound.
Many of the foreign markets were still closed for trading on Monday. The only one of any significance that was open was the Japanese market. Investors were still in a buying mood as the Japanese NIKKEI rose +0.4% and hit another 18-month high for its third day in a row.
The financial media is focused on four main stories this morning with a surprise Fed meeting, pending home sales, the ISM services report, and Apple Inc's (AAPL) iPad launch. The next Fed meeting wasn't due until April 27th but a surprise meeting by the Board of Governors was announced late last week for Monday morning at 11:30 a.m. This closed meeting's agenda is "review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks." No one is really expecting any big changes to come out of the meeting today but it remains a possibility.
On the home front the National Association of Realtors said their index for pending home sales surged 8.2%. Buyers are faced with the April 30th deadline to get under contract or lose the federal government's tax break between $6,500 to $8,000. NAR announced that their seasonally adjusted index of pending sales rose from a downwardly revised January reading of 90.2 to 97.6 in February. Economists were expecting a dip toward 90.3. The DJUSHB home builder index is up 1.7% on the session.
The Institute for Supply Management released their index of non-manufacturing business activity (a.k.a. services index), which accounts for almost 90% of our economy. Economists were expecting the services index to come in at 54.0. According to the ISM their services index rose from 53.0 in February to 55.4 in March. This was the fastest pace since May 2006.
Speaking of fast paced, AAPL announced that they sold more than 300,000 of their new iPads in the first day. The company launched the product on April 3rd and consumers have already downloaded more than one million iPad applications (apps) and purchased more than 250,000 ebooks. Shares of AAPL spiked toward their 52-week high hit last week but failed to get past it.
The market is currently experiencing a widespread rally. The S&P 500 index is up 0.8% and hitting new highs past recent resistance near the 1180 level. The NASDAQ composite is up 0.9% and testing its 52-week high hit on March 25th. The Dow Industrials are up 0.4% and nearing potential round-number, psychological resistance at the 11,000 level. The small cap Russell 2000 index is up 1.4% and has just managed to score a new 52-week high. The best performers are casino stocks (+4.9%), homebuilders (+1.7%), oil services (+1.8%), banks (1.3%), and semiconductors (+2.4%). The worst performers are airlines (-1.3%) and drugs (-0.2%).
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index: