The bulls won their second straight outing on Wednesday as the market rallied on better-than-expected economic news and word that Europe wants to recapitalize their financial institutions. We mentioned the positive ADP payroll report, which saw a big jump in jobs for the private-sector, and the Institute for Supply Management (ISM) numbers came in ahead of forecasts which helped offset some of the negatives.
The bears were hoping a Moody’s (MCO, $30.30, down $0.28) downgrade on Italy’s sovereign debt would rattle Wall Street but it was hardly a surprise. The ratings agency dropped the country’s debt by three notches to A2 – with a negative outlook. Moody’s is just following Standard & Poor’s lead which made a similar downgrade last month.
In the end it didn’t matter.
The Dow gained 131 points, or 1.2%, to finish at 10,939. The index traded to a low of 10,728 while reaching a high of 10,950. Of course, the big test will come at 11K which will let us know just how strong this bounce is.
The S&P 500 added 20 points, or 1.8%, to close at 1,144. After trading to a low of 1,115 at the open, the index made a run at 1,150 which is short-term resistance. The stiffer challenge for the bulls will be ahead at 1,175-1,200. Short-term support at 1,125-1,100 will come into play if the bears make a play today.
The Nasdaq jumped double-nickels (55 points) to settle at 2,460. Tech briefly traded below the 2,400 level – to 2,380 – before surging 2%. The close above 2,450 was impressive with the index topping its 10-day moving average (MA) as the bulls shoot for 2,475-2,500 next.
We feel a little empty doing this morning’s update because we have a heavy heart. The world truly lost a good one last night when it learned Apple’s co-founder, Steve Jobs, passed away. We didn’t know him personally but he easily touched and changed a lot lives with his brilliance. In our book, he will go down as one of the greatest CEO’s of all-time.
Futures are pointing towards a slightly lower higher open today. Dow futures are up 44 points to 10,882 while the S&P futures are higher by 5 points to 1,140. The Nasdaq futures are showing a 13 points pop to 2,180. Subscribers, check the Members Area for the updates.