After several days of flat and negative trends, the stock market roared back to life today on the back of the positive data coming from the manufacturing sector, pointing to growth in manufacturing. There was some negative news on the jobs front after ADP reported an unexpected 10,000 jobs cut in August. But the bad news wasn't able to dampen the moods of the investors who were snapping up battered shares in all sectors.
The DJIA gained 2.5% finishing well above the psychological 10,000 level, while both S&P 500 and NASDAQ gained 3%. As is the norm, gold lost some ground falling from record highs and settling at $1,244/oz. The US dollar was also broadly lower, with the exception of a small gain vs. the Japanese yen. Even so, the yen is hovering near its multi-year highs against a number of currencies including the US dollar.
Energy stocks also showed healthy gains today. BP, which has been on a falling trend lately, gained 3.8% to $36.16.
With today's positive outcome, traders can breathe a collective sigh of relief that the double-dip recession fears may not be an imminent event as some had predicted. It just may be that the recovery is taking longer, much longer, than some optimists had expected. The upcoming housing and jobs data should shed some light on the actual health of the economy.Robert Hashemian is VP of Web Development for TMCnet.com with a keen interest in financial markets. To read more of Robert’s articles, please visit his columnist page. He also maintains his personal Web site at www.hashemian.com.