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Gaza Ceasefire Contributes To Modest Strength On Wall Street - U.S. Commentary


After initially showing a lack of direction, stock moved modestly higher over the course of the trading day on Wednesday. The markets benefited from a positive reaction to news that Israel and Hamas agreed to a ceasefire in Gaza.

The major averages moved roughly sideways going into the close, hovering in positive territory. The Dow rose 48.38 points or 0.4 percent to 12,836.89, the Nasdaq climbed 9.87 points or 0.3 percent to 2,926.55 and the S&P 500 edged up 3.22 points or 0.2 percent to 1,391.03.

The choppy trading seen early in the session came on the heels of a mixed batch of U.S. economic data, including reports showing a drop in jobless claims and a substantial downward revision to consumer sentiment.

Before the start of trading, the Labor Department released a report showing a notable decrease in initial jobless claims in the week ended November 17th, although the data continued to reflect distortions due to Hurricane Sandy.

The report showed that jobless claims fell to 410,000 from the previous week's revised figure of 451,000, coming in line with analyst estimates.

Meanwhile, a separate report from Thomson Reuters and the University of Michigan showed that consumer sentiment improved by substantially less than initially estimated in the month of November.

The report said the consumer sentiment index for November came in at 82.7, down sharply from the preliminary reading of 84.9. With the downward revision, the index was only just above the final October reading of 82.6.

Stocks moved more firmly into positive territory following the news that Israel and Hamas agreed to a ceasefire following an Egyptian-mediated peace negotiation to end the weeklong cross-border hostilities that led to the deaths of at least 150 people.

The deal was announced by Egyptian foreign minister Mohamed Kamel Amr at a joint press conference with U.S. Secretary of State Hillary Clinton in Cairo.

Lingering concerns about the situation in Europe helped to limit the upside for the markets, however, as finance ministers once again delayed a decision on providing additional financial assistance to Greece.

A lack of volume also contributed to choppy trading on Wall Street, with many traders getting a head start on tomorrow's Thanksgiving Day holiday.

Sector News

While many of the major sectors ended the day showing only modest moves, considerable strength was visible among gold stocks. The NYSE Arca Gold Bugs Index advanced by 1.5 percent, climbing further off last Thursday's three-month closing low.

The strength among gold stocks came amid an increase by the price of the precious metal, with gold for December delivery climbing $4.60 to $1,728.20 an ounce.

Networking stocks also showed a strong move to the upside, driving the NYSE Arca Networking Index up by 1.2 percent. Infinera (INFN) helped to lead the sector higher, rising by 4.6 percent.

Electronic storage, biotechnology, and software stocks also saw notable strength on the day, although buying interest was relatively subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Australia's All Ordinaries Index fell by 0.4 percent.

Meanwhile, the major European markets all saw modest strength on the day. While the French CAC 40 Index rose by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index edged up by 0.2 percent and 0.1 percent, respectively.

In the bond market, treasuries moved moderately lower, pulling back further off last week's highs. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.1 basis points to 1.687 percent.

Looking Ahead

Following the Thanksgiving Day holiday on Thursday, trading activity is likely to be subdued during the abbreviated trading session on Friday as many traders remain away from their desks.

by RTTNews Staff Writer

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