Today’s Market
US equity markets rose yesterday after Intel forecast a stronger third quarter and wary investors heaved a sigh of relief from Fed’s improved take on the economy. Major stock indices were up around 3% on the day, with the Dow Jones industrial average posting its biggest one day advance in nearly four months. The buoyant mood pressured treasuries as investors shied away from safe havens. Today, concerns around CIT’s ultimate fate is creating a mini flight to quality trade as Treaury prices as up this morning.
Stocks prices shot up Monday after analyst Meredith Whitney’s optimistic forecast on Goldman Sachs (NYSE:GS) triggered an equity buying spree. Share prices rallied thereafter as investors snapped up banking and industrial stocks and the gains spilled over to the broader market. Goldman’s fixed income and trading businesses posted impressive numbers. Then, Intel’s (NASDAQ:INTC) much better quarterly sales and its upbeat third-quarter outlook encouraged investors further as they brushed aside concerns over CIT Group Inc. (NYSE:CIT).
On Wednesday, the Dow Jones industrial average gained 256 points, or 3.1%, to close at 8,616.21. The S&P 500 index added 27 points, or 3%, to 932.68 and the tech-laden Nasdaq leapt 63 points, or 3.5%, to 1,862.90. The Treasury’s benchmark 10-year note declined 1 2/32, to 96 2/32, and the yield rose to 3.60% from 3.47% late Tuesday. In a broad show of strength, advancing shares outpaced declining issues by nine to one, even as NYSE volume remained a moderate 1.4 billion shares.
This morning stocks are basically unchanged. JP Morgan Chase (NYSE:JPM) reported numbers that bettered analysts’ projections. The firm cited strength in trading operations and record investment banking returns, but did admit operations were hurt by “the continued high levels of credit costs in consumer lending and card services, which we expect will remain elevated for the foreseeable future.