THURSDAY'S MARKET WRAP-UP
Market Snapshot for November 3, 2011 (4:22 a.m. ET):
Closing Prices: DOW 12,044.47 (+208.43, +1.76%), S&P 500 1,261.15 (+23.25, +1.88%), NASDAQ 2,697.97 (+57.99, +2.2%), Nikkei 225 8,640.42 (-195.10, -2.21), DAX 6,133.18 (+167.55, +2.81%), FTSE 5,545.64 (+61.54, +1.12%)
OIL 94.03, GOLD 1,764.20, SILVER 34.51
EURO 1.3812, YEN 78.10, BRITISH POUND 1.6035, U.S. DOLLAR INDEX 76.935
ECB Rallies Market
This week started off on a sour note with the Dow down over 500 points in just two days, but 20-day moving averages held as support heading into the end of the day on Tuesday and the market received a boost early Thursday morning following the European Central Bank's decision to cut its interest rates by a quarter of a percentage point, making it the first rate cut by the bank in two years. This move overshadowed continued concerns out of Greece on a potential debt default despite recent bailout plans that included cutting its debt by 50%.
Thursday's session began with a strong upside gap following the ECB's announcement, but the gains were eroded quickly out of the gate. This kicked off the period of choppier trade I was anticipating heading into the day, but the market managed to strengthen mid-day after closing the opening gap. The indices pivoted off low with a "V" formation on the 5 minute time frame and then formed a base along higher, thus shifting the intraday momentum once again to favor the bulls. Two more waves of buying followed on the 5 minute charts into the close, although each wave was more gradual than the initial move off 10:00 a.m. ET lows.
Dow Jones Industrial Average (Figure 1)
In economic news, weekly jobless claims fell below 400,000 with a drop of 9,000 to a seasonally adjusted 398,000 on first-time filings for unemployment. This was slightly more than anticipated, but had little impact upon price action in the market. Later, the Institute for Supply Management released its October non-manufacturing index. It was expected to come in at 53.5, but pulled back to 52.9 instead. September's reading was 53.0. The Commerce Department also released its factory orders for September, which were expected to have fallen 0.1%, but came in better-than-expected with an increase of 0.3%. August's previously reported drop of 0.2% was also upwardly revised to show an increase of 0.1%.