US Stocks Began The Trading Session In The Black
US stocks began the trading session in the black, but any changes were temporary as investors awaited the Fed decision on bond tapering. Surprisingly, there was much debate on whether the Fed would change their bond purchase program, as many pundits believe the chances were 50-50. The Fed decided to scale back their bond purchase program by 10 billion dollars per month, but stated that rates could stay low well beyond their initial target of 6.5% unemployment. Economics news released on Wednesday was stronger than expected, as housing starts made a fresh 5-year high.
Prior to the opening bell the Commerce Department released Housing Starts and Building Permits. Starts soared 22.7% in November to a rate of 1.09 million, the highest rate since February 2008, with surges for single-family homes and apartments. Economists polled had expected overall housing starts in November to hit a rate of 963,000. Starts for single-family homes rose 20.8% in November to a rate of 727,000, the highest rate since March 2008, according to the U.S. Department of Commerce.
Also on Wednesday, the government reported that building permits, a sign of future demand, fell 3.1% in November to an annual rate of 1.01 million. Permits for single-family homes rose 2.1% to a rate of 634,000, the highest rate since April 2008.
The S&P 500 and Dow Industrial Averages soared after the Fed decision. The Dow and the S&P 500 closed at an all-time high while the S&P 500 had one of the three best trading performances of 2013.
The technical on the Dow Industrials look robust as the MACD (moving average convergence divergence) index is poised to generate a buy signal. The RSI (relative strength index) accelerated with price action and is printing near 63, which is on the upper end of the neutral range.
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