US stocks ended with strong gains on Wednesday, 01 February 2012. Domestic data at Wall Street coupled with global economic data from China and euro zone boosted stocks and took them higher throughout the day. But stocks fell from session highs while going into close. Investors remained concerned regarding latest developments in the euro zone. The dollar weakened and the euro firmed up against the dollar.
For the day, that ended on Wednesday, 01 February 2012, Dow ended higher by 83.55 points or 0.7% to end at 12,716.46. The Nasdaq gained 34.43 points or 1.22% to end at 2,848.27. The S&P 500 gained 11.7 points or 0.9% to end at 1,324.07. Dow was trading higher by 152 points earlier during the day.
All ten economic sectors ended higher led by financial, industrial, materials and healthcare sectors. utilities, telecom and technology sectors.
Twenty-seven out of thirty Dow components ended higher led by Bank of America.
Early buying interest was backed by broad-based strength in Europe, where particants responded positively to a successful debt offering from financially precarious Portugal, and satisfactory PMI Manufacturing readings from key eurozone countries.
Among major earning reports expected for the day, online retailer Amazon.com dropped almost 8% after the company reported sales short of Wall Streets expectations. Among others, Seagate surged in response to an upside earnings surprise and strong guidance. Whirlpool shares set a new multi-month high in response to an upside earnings surprise of their own.
Among economic reports expected for the day at Wall Street on Wednesday, the ISM Manufacturing Index improved in January to 54.1 from 53.1 in the prior month, but many had expected it to make a slightly stronger climb to 54.5. Separately, the Commerce Department in US reported builders increased spending for a fifth straight month in December, with construction expenditures up 1.5%. Ahead of Wall Streets start, Automatic Data Processing Inc. released private-sector payrolls data showing U.S. employers added 170,000 jobs last month.
On Wednesday morning, a Chinese government-sponsored manufacturing survey put the January Purchasing Managers Index at 50.5 in January, up from 50.3 in December and beating expectations for a drop to 49.5. However, a separate, private-sector survey by HSBC put the January PMI at 48.8, also up a little from Decembers 48.7 reading, but below the 50 level that separates expansion and contraction.
Also in focus was news that the eurozone Manufacturing PMI for January made an incremental improvement to 48.8 from 48.7 from the preliminary report, but any reading below 50 still suggests contraction. Frances PMI stayed at 48.5 for January, but Germanys Manufacturing PMI inched up to 51.0 from 50.9 in the preliminary report. The United Kingdom saw its PMI push up to 52.1 in January from the 49.7 that was posted in the prior month.
There were a few fresh developments coming out of the European Union debt crisis on Wednesday. German and Portuguese debt auctions were fairly well-subscribed, and some better-than-expected EU economic data was also released Wednesday. A debt- restructuring deal between the Greek government and the private sector has still not been reached, although there was talk again that a deal is close.
Crude prices ended lower on Wednesday, 01 February 2012 at Nymex. Prices ended lower following the weekly inventory report from the energy department which showed stronger than expected buildup in crude inventories for last week. Prices failed to take advantage of the lower dollar and rising US stocks following better than expected economic data at Wall Street and globally. Light and sweet crude for March delivery fell $0.87 (0.9%) to $97.61 a barrel on the New York Mercantile Exchange on Wednesday.
In the latest weekly inventory report, the EIA reported today that crude inventories rose by 4.2 million barrels in the week ended 27 January 2012. Market was expecting a rise by 3 million barrels. The EIA also said gasoline inventories rose 3 million barrels, and supplies of distillates declined by 100,000 barrels. Market had expected distillate supplies to be down 1.2 million barrels and gasoline stocks to rise 1 million barrels.
Precious metal prices ended higher on Wednesday, 01 February 2012 at Comex. Both gold and silver prices rose as the dollar index weakened. Gold for April delivery ended higher by $9.1 or 0.5%, to end at $1,749.5 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. It was highest settlement for gold since early December. On Wednesday, silver prices for March delivery rose $0.55 or 1.6% to end at $33.81.
Gains were broad. For every stock losing ground more than five gained on the New York Stock Exchange, where 892 million shares traded. NYSE composite volume topped 4.4 billion.
Indian ADRs ended strictly higher on Wednesday. Gains were led by Sterlite which was up 6% at $9.7 and Tata Motors which was up 4% at $25.04. In the Banking space, HDFC Bank was up 1.9% at $31.61 and ICICI Bank was up 1.3% at $36.68. In the IT space, Patni was up 1.8% at $18.86, Wipro was up 1.2% at $11.01 and Infosys was up 0.9% at $55.47.
For tomorrow, initial claims, continuing claims and initial reading on productivity are the economic reports expected for the day. Other than that, earning reports will also continue to pour in.
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