Stocks finished higher on Tuesday following another sideways session of trading. The big news overnight that had major indices gapping up to start the day was a particularly bad Chinese Import Data release. This created hope that the Chinese would shift to monetary easing, which could in turn stimulate the global economy. Chinese stocks rallied big on the speculation. In other good news, ratings agency Fitch also said that it did not expect to downgrade France this year, which would be quite the contrary to its Q4 2011 “downgrade everything” tendency.
The China and Fitch headlines drove stocks to gap up, but intraday movement for equities was mostly flat and slightly negative. In Europe, ECB deposits hit a record high, indicating that a lack of confidence exists in banks lending to one another. Alcoa also didn’t exactly dazzle as it kicked off earnings season with an EPS loss (which missed, too), though revenues were slightly above consensus.
Stocks spent the morning in choppy trading, selling off as the early afternoon started. Major indices would rebound in the mid afternoon, and enter a choppy range into the close. Besides the gap up on the major indices, stocks didn’t make much progress on Tuesday. Though the charts suggest a breakout on select indices, volume wasn’t exactly strong, and stocks are now overbought in the short term. We’ll see if the bulls can follow through in the latter half of this week.
Speaking of the rest of the week, we have Spain and Italy’s bond auctions on Thursday. Also worth noting as earnings season gets underway is a Friday announcement from JPMorgan Chase before the opening bell.
Close Recap: S&P 500 +0.89%, NASDAQ +0.97%, DJIA +0.56%, Midcaps +1.28%.
Have a pleasant evening.
S&P 500 - Intraday
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