Stocks gain as pullback draws buyers

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Stocks are higher again today as investors take advantage of the recent pullback to get long.

S&P 500 futures are up more than 0.6 percent and near their highs of the session at the time of this writing, while most European indexes are up 1.5 percent to 2 percent. Asia was mixed overnight as Hong Kong rose but a strong Japanese yen weighed on the Nikkei.

The S&P 500 gained almost 1 percent yesterday, attempting to rebound from a one-month slide. The pullback brought the index back to its 100-day moving average and the same 1560 area where it struggled in March. This suggests that old resistance has become support, which is potentially bullish.

Strong economic data also boosted sentiment: Durable-goods orders, home prices, consumer confidence and new home sales all beat expectations yesterday. We now enter a period of few headlines, leading up to the Institute of Supply Management's key manufacturing index on Monday and monthly employment data at the end of next week. Markets will also be closed on Thursday, July 4, and attention will turn to corporate earnings after the holiday.

Treasury bond yields are falling today, which could also support bullish sentiment. They had surged in the last month on signs the Federal Reserve will reduce asset purchases. Equities that would benefit from lower yields, such as utilities and real-estate investment trusts, have also started to rebound drops from big drops in the last three sessions.

In an interesting note yesterday, Merrill Lynch classified 43 of 45 global markets as "oversold." Brazil (:EWZ), Turkey (:TUR), South Africa, Mexico (:EWW), and the materials sector (:XLB) were identified as the cheapest.

Precious metals are making the big move in commodities today, with gold down more than 3 percent and silver plunging almost 5 percent. Oil is slightly lower and copper fell 1 percent.

The strength in equities is somewhat remarkable given the move in foreign-exchange markets today, with the euro down and the Japanese yen higher. The Australian and Canadian dollars are gaining, however, which could bode well for global risk appetite.

In company-specific news, touch-screen maker Synaptics is indicated higher after raised its revenue guidance for the current quarter. Handgun maker Smith & Wesson is also up after reporting strong quarterly results.

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