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DJIA Industrial Average

Jan 31

Open: 11824.76

High: 11891.93

Low: 11817.88

Close: 11891.93

Change: +68.23 (+0.58%)

RSI: 68

MACD: 118

Strategy: The US markets posted some solid gains on the back of improved commodity prices and rising crude on Dow after being inspired by some positive earnings surprises. Market may hover near these levels for some more time, till they breach breakout hurdles and push towards a bull run in near future.

Commentary

The stocks in US closed with some healthy advances despite continued geo-political tensions in Egypt after the markets cheered some healthy earnings from Dow components and rising crude and commodity prices. The markets are showing signs of consolidation before moving towards a major bull rally on Dow.

At the close on Monday, the Dow Jones industrial average advanced 68 points, or 0.56%, to 11,892 and the S&P 500 index added 9.8 points, or 0.8%, to 1,286. The Nasdaq Composite closed higher by 13.2 points, or 0.5%, to 2,700.

Advancing Sectors included Energy (+2.6%), Materials (+1.6%), Financials (+1.0%) and Industrials (+0.9%).

However, the only laggard amongst the sectors was Consumer Staples (-0.3%).

Amongst the Dow components, Alcoa 2.73%, Exxon Mobil 2.14%, IBM 1.75% and Chevron 1.67% advanced smartly in the session.

However, the Dow components to shed weight in the session included Proctor & Gamble -1.67%, Wal-Mart -1.11%, American Express 1.08% and Johnson & Johnson -0.40%.

At least 22 Dow stocks advanced in the session, while another 7 stocks closed lower Monday.

The Chicago PMI came in at 68.8 for December, which was its best reading since 1988.

Elsewhere, Personal income for December increased 0.4%, which is slightly less than the 0.5% increase that had been expected. Personal spending during December increased 0.7%, which is greater than the 0.6% increase that had been widely anticipated.

Intel finished flat after participants assessed news that the firm discovered a chipset error. However, the company maintained a higher revenue guidance. But shares of rival AMD shot up more than 4.5%.

In an M&A deal, Massey Energy was acquired by rival Alpha Natural Resources in a $7.1 billion deal on the weekend. Shares of Massey jumped 9.4%.

Meanwhile, investors also cheered the positive earnings earlier released by Exxon Mobil.

The dollar fell against the euro, the British pound and the Japanese yen.

Gold futures for April delivery fell $7.20 to $1,334.50 a troy ounce.

Oil prices extended their recent climb to a two-year high of $92.84 per barrel following the unrest in Egypt.

The Day Ahead

Tuesday

Motor vehicle sales for Jan

ISM Mfg Index for Jan

Construction Spending for Dec