Market Finds Strength in Numbers
An oversold condition, plus strength in the dollar, plus some better-than-expected economic data helped stocks move higher early Monday, notwithstanding weakness in defense stocks after the Columbia shuttle tragedy. Meanwhile, Treasuries were under pressure, thanks to the strong data and President Bush's budget proposal.
As of 1:49 p.m. EST, the Dow Jones Industrial Average was up 1.11% to 8143.21, although down from its earlier high of 8150.89. The S&P 500 was higher by 0.9% to 863.56, vs. its early best of 864.66, and the Nasdaq Composite was up 0.85% to 1332.10, after having traded as high as 1334.91.
Meanwhile, the price of the benchmark 10-year Treasury note was down 13/32 to 99 28/32, its yield rising to 4.01%. The president's budget would create a record $307 billion deficit in fiscal 2004, raising concerns about the government's need to increase its borrowing via the issuance of Treasury securities.
Stock futures were higher in premarket hours and shares opened with modest strength Monday, piggybacking on strength in the greenback. The dollar was most notably strong vs. the Japanese yen, which fell to a six-week low after Japanese officials talked about "massive" sales in order to weaken the currency. The dollar then received a secondary boost following the 10 a.m. EST release of the January ISM Manufacturing Index and December construction spending data. Of late, the U.S. Dollar Index was up 0.06 to 99.97.The Institute for Supply Management said its key index of manufacturing conditions came in at 53.9 for January, down from an upwardly revised 55.2 in December but slightly ahead of consensus estimates. The new orders index slid to 59.7 from 69.2 in December but still was relatively high, while the headline index was above 50 for a third-straight month, indicating expansion in the manufacturing sector. "It is key to remember that strength in manufacturing depends crucially on final demand strength," about which there is still uncertainty after a sub-par fourth quarter, observed Peter Kretzmer, senior economist at Banc of America. "Current strength may derive from better capital spending demand in recent months, but may also simply reflect very low inventories across most industries."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV