The market's rebound continues right on schedule. British bank Barclays reported stronger earnings giving the financial sector a boost. The economic data out of New York was better than expected. Euro strength and dollar weakness is giving commodities a big boost. Investors are shrugging off concerns that the Greece aid package might unravel before it's even detailed.
It was a quiet day in Asia with the Chinese markets closed for the weeklong Lunar New Year festival. The Japanese NIKKEI managed a 0.2% gain. The nightmare continues for Toyota Motors. Toyota said it was temporarily closing two assembly plants in the U.S. Meanwhile the U.S. transportation department is officially requesting documentation from Toyota regarding its recall and when the company knew there were problems. Shares of TM are down 1.4% today falling under the $76 level.
European markets were showing strength. Resource stocks were in marching higher as the dollar declined on euro strength. Barclays reported earnings of $18.18 billion in 2009, which was much better than expected and the banking sector rallied on the news. Most of the major markets were higher. The French CAC-40 rallied 1.6%. Both the German DAX and English FTSE rose 1.47%. There was some news out yesterday that EU leaders were demanding more stringent budget cuts for Greece to get their debt burden in order before they would agree to a bailout.
Here at home the New York Federal Reserve's Empire State economic index came in much better than expected. Economists were expecting a reading of 18.0. The economic index of activity hit its fastest pace in four months with a jump from 15.9 in January to 24.9 in February. Numbers over zero are positive.
In corporate news the REIT stocks are bouncing as Simon Property Group (SPG) made a $10 billion bid to buy the bankrupt remains of General Growth Properties (new symbol GGWPQ). Shares of SPG are up 3.7%. Shares of GGWPQ are up 24.6%.
The nuclear-energy sector is in rally mode after President Obama announced a plan to offer $8 billion in loan guarantees to build the first nuclear plant in the U.S. in the last 30 years.
The widespread strength in the financial sector was enough for investors to shrug off the negative news from Capital One Financial. The credit card issuer said that consumer credit defaults were rising. The company reported that January defaults rose to 10.41% from 10.14% in December. COF's accounts past day (at least 30 days) inched up from 5.78% to 5.80%. There was some improvement in the company's U.S. auto loans division, which saw delinquencies move down from 10.03% to 9.61%. Shares of COF are up 4% on the session.
Currently the S&P 500 index is up 1.3% and pushing past resistance at the 1080 level and actually trading above the 1090 level. The next area of resistance is possibly the 1100-1110 zone with the 50-dma at 1108. The NASDAQ is up 1.0% and trying to hold above the 2200 level. The Dow Industrials are up 1.1% with a rally past the 10,200 level. The small cap Russell 2000 index is only up 0.9% as is nears overhead resistance at its 50-dma. Overall it's a widespread rally with only the healthcare sector in negative territory. Crude oil is up 3.7% to $76.87 a barrel. Gold futures are up 2.4% (almost $27.00) to $1,116.90 an ounce.
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index:
Scanning the OptionInvestor.com play list I see that AZO has hit our trigger to buy calls this morning. The play is now open. FCX is showing strength with a gap higher this morning. Shares of X are surging with a 6.4% gain. Readers may want to go ahead and take some money off the table. ABT is breaking out over its 50-dma. It might be time to exit. Our put play on INFY has been stopped out. JPM is testing resistance near $40.00.