U.S. equities enjoyed a much-needed rally Tuesday amid a slew
of bullish earnings reports and favorable economic news.
Among the blue-chip components posting favorable profits were
DuPont (NYSE:DD), Johnson & Johnson (NYSE:JNJ), and Merrill
Lynch (NYSE:MER). The upbeat reports helped the Dow achieve
triple-digit gains in early trading and the bullish momentum
bolstered shares values in the broader market sectors as well.
Stocks in technology segment were driven higher by a number
of brokerage upgrades including Juniper Networks (NASDAQ:JNPR)
Research in Motion (NASDAQ:RIMM), and Yahoo! (NASDAQ:YHOO).
Also setting a positive tone for markets was an unexpected
increase in consumer confidence. The consumer confidence
index climbed to 103.4 in January from an upwardly revised
102.7 in December. For the most part, analysts expected a
slight decline in the numbers, but the consensus outlook is
relatively optimistic with above average economic expansion
and high single-digit earnings growth for the upcoming year.
In other markets, the dollar traded higher while February
gold dropped $4.70 to $422.40 an ounce in New York. March
crude futures fell below $49 a barrel, despite terrorist
threats to Middle East oil installations, Sunday's OPEC
meeting and a potential oil-worker strike in Nigeria. In
the bond market, the benchmark 10-year Treasury was last
down 12/32 at 100 20/32 to yield 4.18%.
Looking forward, the recent sell-off in equities may have
finally reached an end as investors take advantage of the
buying opportunity and the quarterly earnings season comes
to a close. The majority of bullish positions in our portfolios
were not seriously threatened by the recent slump, however
a few of the bearish plays will require adjustments if the rally
finds substantial buying support in the next few sessions.