– The major U.S. index futures are pointing to a lower open on Wednesday, with sentiment shaky despite the fairly positive outcome for a 5-year bond auction by Germany. The overbought levels of the markets may prompt traders to either take some profit or stay on the sidelines ahead of some key data/events scheduled for the next two days.
Following Germany’s footsteps, Italy and Spain are also scheduled to auction bonds. China is set to release its consumer price inflation report for December tomorrow and the U.S. Commerce Department is scheduled to release the retail sales report for December, while the European Central Bank and the Bank of England will announce their interest rates- all key market moving events that have some implication for the global economy. U.S. stocks advanced to 5-month highs on Tuesday, capitalizing on a buoyant aluminum demand forecast issued by Alcoa (AA). The earnings optimism and a recent string of positive domestic data kept eurozone debt fears at bay.
The major U.S. averages opened higher and moved sideways until the afternoon. After legging down slightly in the mid-session, the averages consolidated once again before closing moderately higher.
The Dow Industrials added 69.78 points or 0.56 percent before closing at 12,463, while the Nasdaq Composite Index closed at 2,703, up 25.94 points or 0.97 percent and the S&P 500 Index ended up 11.38 points or 0.89 percent at 1,292.
Basic material, oil service, housing, financial, biotechnology, transportation, gold, networking and semiconductor stocks were among the best performers of the session.
On the economic front, a report released by the Commerce Department showed that wholesale inventories at the end of November were up 0.1 percent month-over-month and were 10.5 percent higher than a year-ago. Meanwhile, wholesale sales climbed a steeper 0.6 percent from October and were up 11.3 percent from last year. The inventories to sales ratio came in at 1.15 compared to 1.16 percent in November 2010.
Commodity, Currency Markets
Crude oil futures are trading down $0.83 at $101.41 after advancing $0.93 to $102.24 a barrel on Tuesday. The American Petroleum Institute’s inventory report released late Tuesday showed that crude oil inventories rose by 400,000 barrels in the week ended January 6th. Gasoline and distillate stockpiles also increased in the week.
An ounce of gold is currently valued at $1,637.80, up $6.30 from the previous session’s close of $1,631.50 an ounce. In the previous session, gold rose $23.40.
On the currency front, the U.S. dollar is trading at 77 yen compared to the 76.848 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.2707 compared to yesterday’s $1.2778.
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