Stocks rallied after it was reported that fiscal cliff talks were advancing. Correlations today were very high as all sectors of the S&P 500 advanced. The S&P 500 closed off its highs but did manage to close above the key 1325 resistance level. Technology, steel, and biotech were the leaders today. The transportation index spiked higher early in the day but saw profit taking near the end of the day to close near the unchanged mark. The S&P 500 closed 0.65% higher and the Dow was up by 0.60%.
The S&P closed at 1430 on Election Day. The 1430 level was resistance today as the advance stalled at 1434 and closed at 1427. In the wake of the election, as investors focused on the fiscal cliff, the market sold off roughly 6% in less than two weeks. The recent rally brings us back to where we were back in early November.
All four major Congressional leaders spoke today. The focus shifted from taxes to spending. Boehner spoke about the White House needing to come up with specific spending cuts to close the deal. With Pelosi, Reid and McConnell also talking about spending cuts the consensus today seemed to be that there has been some sort of agreement on taxes. Time will tell if that is actually the case.
Even with a slowdown today the Shanghai composite has risen roughly 6.5% from the low seen earlier in the year. New economic reforms through some of the leadership changes and signs of better growth prospects going forward have led to improved trading in China.
Commodities were weaker across the board, with precious metals, grains, copper, crude and natural gas all trading lower.
Technology traded ahead of the market moving higher by 1%. Apple bounced by 2.2%. Semiconductors also produced healthy gains today. Hardware, software, and networking were industries within the sector that performed well today.
Source: PFS Group
