Stocks in the US Continued Notching Up Solid Gains
Stocks in the US continued their torrid climb notching up solid gains during a short trading session. Better than expected data helped the S&P 500 index and the Dow Industrials hit all-time highs while the 10-year treasury note inched higher toward 3%.
Prior to the opening bell, investors were treated to solid economic data that helped lift stocks on the open. Durable goods orders which are consumer goods that last at least three years rose by 3.5% last month, reversing a decline in October, according to the Commerce Department. Excluding the transportation category, manufactured-goods orders rose 1.2%, the strongest gain since May.
The housing sector also reported better than expected numbers. Americans continued to purchase new homes at a brisk pace in November; the latest sign the housing market is regaining traction after a rise in mortgage rates. New-home sales hit an annual rate of 464,000 last month, down only 2.1% from October’s upwardly revised annual rate of 474,000, according to the Commerce Department. October and November marked the two strongest months of new-home sales since mid-2008, during the recession. Economics had expected new home sales to decline to a 445,000 annual pace.
The better than expected numbers helped push the 10-year yield to 2.99%, the highest level since September. 6. Trading volume in the Treasury bond market was about half of the size of a normal trading session on the day before Christmas, which might have exaggerated the yield’s move.
The S&P 500 continued to climb along with strong momentum. The MACD (moving average convergence divergence) index generated a buy signal as the spread 9the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread. The relative strength index (RSI) moved higher with price action reflecting accelerated momentum printing near 67 which is on the upper end of the neutral range.
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