DIA +.48%, SPY +.54%, QQQQ +1.21%
10-Year Treasury, -7/32 yielding 4.48%
Today's rise in the Dow marks the first time this year the market has advanced for 4 straight days. News that Alcoa beat earnings expectations started the trading, followed by a large drop in oil's price. A Fed governor's speech indicating interest rate hikes don't need to increase in size added to the bullish sentiment. Pfizer's announcement it was withdrawing another cox II inhibitor from the market was not enough to hold back the momentum. 60% of NYSE issues and 68% of NYSE volume advanced. NASDAW's numbers were 58% and 77%, respectively.
The 10-year Treasury sold off 7/32, to yield 4.48%. A Fed governor comments that inflation was contained but should be watched raised trader's inflation fears. In the same speech, the governor noted the market should not place too much emphasis on a single employment report. The market rallied when the employment number came in at 110,000, implying the Fed would not be raising rates faster than 25 basis points at a time.
Oil dropped 3% today, to close at $54.11/bbl. US stockpiles are at their highest levels in three years, implyiing the country can handle a possible oil shock, or at least adequately provide for summer driving needs. In addition, the oil market has been the market of choice for speculators, so some of today was simple profit-taking. Although some pundits are claiming this may be the beginning of a bif sell-off in the market, the supply/demand characteristics remain intact. Additionally, there are strong technical levels of resistance at 54 and 52 a barrell. In other words, I think that statement was premature.
The dollar was virtually unchanged versus the Yen and the Euro today. The dollar has rallied versus both currencies sine the beginning of the year, with higher US bond yields as the main driving force. However, trade data is released next week, so the current account deficit is again in the headlines. Considering there has been no news on this for the last few weeks, I doubt it has improved much.