Stock Market News: Optimism Marks the First Day of Quarter 3
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Optimism is in good supply today as the stock market bulls take over. The Dow is up almost 100 points, with three hours remaining, after starting up higher out of the gate. The Nasdaq is up 20 points, and the S&P 500 is approaching a gain of 10 points. So far, it appears like today isn’t going to turn into a rout like yesterday’s initial gains did. Indeed, the bulls appear to be firmly in control for now. With Quarter 3 starting, investors appear to be very interested in the prospect of an end to the recession. And much of today’s economic data appears to support the idea that the decline is at least slowing. The other side to the economic data story, though, is that contraction is still taking place. Economic contraction may be slowing, but it is still taking place.
Especially encouraging to bulls was the information on manufacturing and home sales. Manufacturing is still declining, but the pace has slowed. There are hopes that perhaps, by the end of the year, that sector will start making gains again. U.S. pending home sales increased for the fourth straight month, adding to hopes for a stable housing market — in spite of continuing foreclosures. MarketWatch reports on pending home sales:
The pending home sales index rose 0.1% in May after an upwardly revised gain of 7.1% in April, the National Association of Realtors said. The index is 6.7% above May 2008.
“Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” said Lawrence Yun, NAR’s chief economist, in a statement.
He added that existing-home sales should trend up through the end of the year.
Investors are largely ignoring employment data today. ADP employment data came in worse than expected, but investors are focusing on the good as they attempt to start Quarter 3 off on a good note.
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July 2nd, 2009 at 9:26 am
[…] yesterday’s optimistic open to the 3rd quarter, things have turned pessimistic quickly. Even though yesterday’s disappointing ADP employment […]