Wall Street wrap
by Peter Switzer
History actually says that the week of Thanksgiving on Wall Street isn’t for stocks and given the contribution from North Korea’s bombshell and the persistent worries about Ireland, Portugal and the rest of Europe’s problem child economies, you would have expected a disappointing week for share prices.
Well the positive nature of Yanks should never be underestimated and the Dow showed it spiking nearly 151 points, or 1.4 per cent, to finish around 11187.28.
The S&P 500 index put on gained 17.62 points, or 1.5 per cent, to finish at 1198.35 while the Nasdaq roared up 48 points, or 1.9 per cent, to finish at 2543.12.
This was a big effort and it will power along our markets today.
Interestingly, for the past five years, shares have moved against the yearly trend of the market and so this was a big effort. Since Wednesday last week, the Dow is up 1.54 per cent.
Usually after Thanksgiving, the prevailing trend takes over and given the current run of better-than-expected economic data, it’s no wonder the market is super-positive.
The trading day was helped by better share news out of Europe and suggests that the bailout for Ireland is seen as a plus and not a negative.
Meanwhile in the US, high-end retailers such as Tiffany’s have all been reporting well. Friday is called Black Friday as it’s the day after Thanksgiving and it’s the day retailers go into the black with the start of the holiday sales that go up to New Year.
I’m in New York and the shops are packed and the recession mentality that might be gripping some parts of America (though I didn’t see it in LA despite California’s dire straights) makes me suspect that the US consumer is on the comeback trail.
On the good economic news front, the Mortgage Bankers Association reported that mortgage applications rose to the highest level in more than six months.
Also consumer spending went up for the fourth month in a row in October while consumer sentiment hit the best level since June.
I was also keen to see Art Cashin, the director of floor operations at UBS Financial Sevices at the NYSE, who I will interview next Monday for my Sky News Business Channel program. He has turned more positive than he has been for a while.
"I don't want to throw cold water on [market optimism], but when you have an off-reporting-time," it sometimes skews the data, Cashin told CNBC.
He further added: "There's going to be an overhang through the rest of today (Wednesday) and Friday," with a "general bias to the upside."
What we’re seeing is economic news trumping market spooking stuff such as the Korean crisis and that’s a good sign for markets going forward.
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Published on: Thursday, November 25, 2010blog comments powered by Disqus