More Multi-Year Highs for the Dow, SPX as Summertime Rally Continues

08 Sept 2012 Wall Street end the shortened week on a bullish note
U.S. stocks clung to the flatline and stayed near multiyear highs Friday as disappointment over the August jobs report was countered by hopes the gloomy data could give the Federal Reserve further reason to unleash a third round of quantitative easing. The Dow Jones Industrial Average (DJI) drifted below breakeven before lunchtime, but battled its way back into the black in the last minutes of trading. With that, the blue-chip barometer secured a respectable return  of 1.65% for the week.

The markets will be laser focused on the Federal Reserve next week, anxiously awaiting word on whether the central bank will initiate another round of economic stimulus.

The Federal Open Markets Committee, which sets most Fed policy, is meeting Wednesday and Thursday and a statement is due at the end of the second day. Fed Chairman Ben Bernanke will hold a press conference Thursday afternoon.

Stock markets are all hoping for another round of quantitative easing, in which the Fed buys      U.S. securities in an effort to goose the stumbling U.S. economy. Friday’s dismal labor report which revealed that just 96,000 jobs were created in August only boosted hopes among investors for QE III.

The Dow Jones Industrial Average (DJI – 13,306.64) was rather flat all session long, but found itself up 14.6 points, or 0.1%, by the closing bell. The Dow posted its best daily settlement since December 2007. Half of the 30 components slipped into negative territory, with Kraft Foods Inc's (NASDAQ:KFT) 5.5% loss pacing the laggards. On the other hand, the 15 outperformers were led higher by Bank of America's (NYSE:BAC) 5.4% gain. During the holiday-shortened week, the Dow enjoyed a 1.65% rise.

 

Adding 5.8 points, or 0.4%, the S&P 500 Index (SPX – 1,437.92) prolonged its stay in the black today and closed at a fresh four-year high. Plus, the SPX marked its best daily close since January 2008. For the week, the broad-market index climbed 2.2%.

 

The Nasdaq Composite (COMP – 3,136.42) enjoyed another multi-year high run, touching 3,139.61 in intraday action -- its loftiest price since mid-November 2000. And after the dust cleared, the tech-rich barometer eked out a fractional win. The COMP turned in the best weekly performance of its peers, rallying 2.3%.

For every stock sliding in New York Friday, more than two gained on the New York StockExchange, where nearly 680 million shares had traded. Composite volume reached 3.7 billion.

 

HAPPY WEEKEND

WALL STREET : DJIA Rallies 123 Points

Home Depot aid solid retail sales; Dow reclaims 12K
Stocks bolted higher out of the gate today, as a round of surprisingly decent economic data helped bulls find the conviction that eluded them on Monday. China kicked things off on a positive note, with a pair of reports from the key emerging market revealing healthy expansion in industrial production and in-line inflation growth. The day's domestic data was similarly well-received, as traders weighed a smaller-than-forecast decline in May retail sales against a relatively tame rise in the producer price index (PPI). A stronger-than-predicted earnings report from retail titan Best Buy (BBY) also supported the bullish case, hinting that sentiment toward the consumer-dependent sector may have grown overly gloomy in recent weeks. The major market indexes pared their gains ever so slightly by the close, but stocks still ended the day impressively higher.

The Dow Jones Industrial Average (DJIA – 12,076.11) snapped its two-day streak south of 12,000, tacking on 123.1 points, or 1%, as 24 of its 30 components closed on positive ground. Retailer Home Depot (HD) led the blue chips higher with a 4.5% gain, while Bank of America (BAC) paced the six laggards with a 1.6% drop. Today's Dow rally fizzled near 12,120, and the index settled for a 10th consecutive daily close beneath its descending 10-day moving average. However, the blue-chip barometer has found a foothold at its 160-day trendline over the past several sessions.


The S&P 500 Index (SPX – 1,287.87) racked up a gain of 16 points, or 1.3%, but also stopped short of reclaiming its 10-day trendline. Finally, the Nasdaq Composite (COMP – 2,678.72) added 39 points, or 1.5%, staging a tidy rebound from support at its 200-day moving average.eir gains ever so slightly by the close, but stocks still ended the day impressively higher.

TECHNICAL ANALYSIS
Dow Jones Industrial Average
The Dow closed sharply higher due to short covering on Tuesday as it consolidates some of the decline off May's high. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near-term. If the Dow extends the decline off May's high, the 75% retracement level of the March-May rally crossing at 11,883 is the next downside target. Closes above the 20-day moving average crossing at 12,287 are needed to confirm that a low has been posted. 

First resistance is today's high crossing at 12,119. 

Second resistance is the 20-day moving average crossing at 12,287. 

First support is Monday's low crossing at 11,917. 

Second support is the 75% retracement level of the March-May rally crossing at 11,883.

Crude oil rallies with stocks

Crude futures rallied right along with stocks today, as healthy economic data out of China and the U.S. diminished concerns about waning demand from major oil-consuming nations. Meanwhile, rising risk appetites on Wall Street pressured the greenback lower, providing an additional upside catalyst for dollar-denominated oil futures. By the close, crude oil for July delivery added $2.07, or 2.1%, to settle at $99.37 per barrel.

HAPPY TRADING