October 29, 2014

Market Smashes Through Major Technical Barriers

From DailyMarketOutlook

Market Smashes Through Major Technical Barriers
The indices have drastically increased their odds of breaking to new highs

By Sam Collins, InvestorPlace Chief Technical Analyst  |  Oct 29, 2014

Small-cap stocks led the market higher Tuesday with the Russell 2000 climbing 2.9%. The Nasdaq’s 1.8% gain and S&P 500′s 1.2% advance put the indices in positive territory for October after being in the red mid-month.

The big rally appeared to be the result of the Federal Reserve’s willingness to continue an easy-money policy after its bond-buying program ends this month. The FOMC will issue a statement today, which is expected to indicate that a hike in interest rates is not currently on the near-term agenda.

Higher-than-expected earnings have also boosted stock prices. Pfizer Inc. (PFE) rose 0.2% after beating analysts’ Q3 estimates. E I Du Pont De Nemours And Co (DD) gained 0.1% after it said earnings jumped 52% as a result of lower expenses. However, Twitter Inc. (TWTR) fell 9.8% on a drop in active users even though revenue more than doubled.

Lower energy prices contributed to gains in the Dow Jones Transportation Average, which hit a new high on Tuesday.

Consumer confidence rose to its highest level since 2007. Durable goods orders fell 1.3% in September versus an expected increase of 0.7%. Case-Shiller reported a 5.6% rise in home prices in August, less than the 5.7% expected. And the Richmond Fed’s manufacturing index rose to 20 in October versus an expected decline to 10.

With stocks back in demand, bond prices fell. The yield on the 10-year Treasury note rose to 2.28% from 2.26% on Monday.

At Tuesday’s close, the Dow Jones Industrial Average rose 188 points to 17,006, the S&P 500 gained 23 points at 1,985, the Nasdaq was up 78 points to 4,564, and the Russell 2000 gained 32 points at 1,149.

The NYSE’s primary market traded 797 million shares with total volume of 3.6 billion. The Nasdaq crossed 1.9 billion shares. Block trades were slightly higher than on Monday on both exchanges. On the Big Board, gainers outpaced decliners by over 5-to-1, and on the Nasdaq, advancers were ahead by 4-to-1.

10 29 14 nasd 300x181 Market Smashes Through Major Technical Barriers

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