Courtesy of John Nyaradi.
Stock Markets and ETFs partied hard today as the S&P 500, NASDAQ, and Russel 2000 all gained over 1.5%
Major Index ETFs also joined party as the SPDR S&P 500 ETF (NYSEARCA:SPY) gained 1.15%, the PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ) gained 1.33%, and the iShares Russell 2000 ETF (NYSEARA:IWM) gained 1.82%. The major indices and their corresponding ETFs likely rose because of an improved home builder’s index and industrial output reports. The home builders were reported to have the highest confidence in the housing market since 2007, while US Industrial output jumped .4%.
Gold joined the party today as well, as the spot price for gold increased half a percent to settle at $1659.90 per ounce. Gold etfs including the iShares Gold Trust Fund (NYSEARCA:IAU) jumped .68% today; the increase in gold is likely due to continued European woes despite the fact that Greece is closer and closer to another debt deal which would stave off default by March. However, the IMF today sought to increase their treasure chest (ie bailout machine) to $600 billion, which might indicate to investors that the IMF, European Central Bank, and the rest of the world do not have the funds to bail out Europe. Gold might have gained back its glitter.
The financial sector was also big news today as Goldman Sachs reported a 58% decline last quarter. The company’s stock, however rose 6.79% today. I guess the past does not matter so much as the future; usually a 58% decline would result in someone losing their job or home. The company apperently expects growth for the new year however, as 58% losses is nothing to recoup (cough). The Financials Sector Select SPDR ETF (NYSEARCA:XLF) took the news on a whim and closed out 1.53% ahead.
In other news, the Obama Administration rejected the application for the Keystone XL Oil Pipeline; whether this move affects oil (NYSEARCA:USO) prices will be seen soon. Google is expecting a 20% earnings increase for fourth quarter, while tomorrow brings more economic reports including Jobless claims, housing starts, and the Philly Fed. The US House of Representatives also rejected President Obama’s request to increase the nation’s debt limit by $1.2 trillion; today’s move by the House adds just another chapter to the ongoing debt drama and debate.
Bottom Line: The US Economy does seem to be improving ever so slowly as indicated by today’s home builder’s index report and US industrial output report. The IMF’s bid for an additional $600 billion cannot be a good sign for the Eurozone however, even though Greece is managing to force private lenders to write down more debt. At the end of the day, we still have too much debt and not enough growth, however the markets partied regardless.
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