The recent trend of strong Monday rallies continues. Today's stampede higher is fueled by another decline in the dollar and some unexpected strength in existing home sales. The dollar weakness is fueling some strong gains in commodities. Gold futures hit a new all-time high at $1,174.00 an ounce this morning. Some of the best performers today are energy stocks, banks, miners, and healthcare.
Foreign markets were higher across the board. The Hong Kong Hang Seng ended a four-day losing streak with a 1.4% gain. The Chinese Shanghai index gained 0.9%. Automobile makers were stronger following positive comments out of a regional Chinese car show. The Japanese NIKKEI was closed on Monday. The gains in Europe were a lot stronger following four days of declines last week. The EU's version of the purchasing manager's index came in positive with a rise from 53.0 in October to 53.7 in November. Readings over 50 indicate expansion. The English FTSE rose 1.6%. The French CAC-40 gained 2.2%. The German DAX rallied 2.4%.
One of the big stories today was better than expected existing home sales data. Economists were estimating a 1.4% rise in October sales. The National Association of Realtors announced this morning that existing home sales had soared 10.1% to the fastest pace in two and a half years. Investors should look past the headline numbers. October sales surged because consumers thought the new homebuyer tax credit was expiring. Many analysts are concerned that the program merely pulled sales forward. Of course now the tax credit program has been extended through April 2010. October's sales pace hit a seasonally adjusted annual rate of 6.1 million compared to a downwardly adjusted 5.54 million pace for September. A pickup in sales is healthy for the economy but it comes at a cost. Home prices continue to fall. The median sales price is down 7% from a year ago at $173,100. This is a 2% drop from just a month ago.
The U.S. dollar is making headlines on a daily basis. Today the dollar is sliding toward its 2009 lows. Commodities are bouncing on the dollar weakness. Gold hit new highs at $1,174 an ounce but has since pulled back to $1,167. Both silver and copper have hit new highs for the year. Oil gapped open higher but the deeper we go into the trading session the faster oil seems to be correcting from the morning rally. Fortunately the oil stocks appear to be ignoring the retracement in oil futures for now.
Currently the S&P 500 index is up 1.3%. The index spiked toward last week's highs near 1,112 but has pared its gains. The Dow Industrials are up 1.1% and managed to hit a new 2009 high at 10,495 this morning. The NASDAQ composite is up 1.3% but it too is trimming its gains. The small cap Russell 2000 index spiked toward round-number resistance near the 600 level this morning.
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
A quick review of the OptionInvestor.com play list shows Deere & Co (DE) hitting new 2009 highs at $53.59 this morning. The stock is still up 2.7%. The GLD gold ETF hit an all-time high at $115.11 this morning. NSC appears to be breaking out from its short-term downward consolidation. Banks are showing relative strength and NTRS is up 2.4% on the session.