Market Rallies Following Europe's Lead
Trading turned around once again early Thursday morning. The European Central Bank cut its interest rates by a quarter of a percentage point, making it the first rate cut by the bank in two years. Europe will continue to grab the headlines today as leaders meet for the G20 meeting in Cannes. Greece's debt problems will be one of the focus topics for the event. The index futures are up substantially higher in premarket trade and the indices have managed to hang onto daily support at the 20-day moving averages despite the weak bias of the past several days. The market should continue to hold this support throughout Thursday's session, but the upside pace will not be sustainable. This can easily lead to another choppy session without strong trend action.
S&P 500 (Figure 2)
The Dow Jones Industrial Average ($DJI) ended the day on Wednesday with a gain of 178.04 points, or 1.53%, and closed at 11,836.04. The strongest gains for the day came in the financials, which made a strong recovery after a dismal day of trade on Tuesday. The top performers were Bank of America (BAC) (+5.00%), Alcoa (AA) (+3.18%), JP Morgan (JPM) (+2.84%), and American Express (AXP) (+2.71%). The only Dow component to post a loss was Intel (INTC) (-0.21%).
The S&P 500 ($SPX) finished the session with a gain of 19.62 points, or 1.61%, and closed at 1,237.90. Top performing industry groups were energy (+2.9%), financials (+2.8%), and materials (+2.2%). The strongest individual percentage performers were Pioneer Nat. Res. (PXD) (+12.58%), MetroPCS Communications (PCS) (+11.88%), EOG Res. (EOG) (+11.83%), and Quanta Svcs (PWR) (+11.64%). The weakest were Becton Dickinson & Co. (BDX) (-4.61%), Pitney Bowes (PBI) (-3.60%), and Molson Coors Brewing Co. (TAP) (-3.30%).