TSLA - US Stocks On Track To Build On Gains As Traders Await A Batch Of Data; Can Market Resist Profit Taking? | Benzinga
U.S. stocks could build on the momentum they picked up on Tuesday following the release of benign inflation data. Traders get to digest another batch of economic data on producer price inflation, retail sales, regional manufacturing activity, and a few speeches by Federal Reserve officials. If the producer price inflation report confirms the softness relayed by its retail-level counterpart, the upward momentum will likely continue.
Also, on a positive note, the House has approved a temporary spending bill, which extends government funding through mid-January. That said, some degree of profit-taking cannot be ruled out.
Cues From Tuesday’s Trading:
With both headline and core inflation readings for October coming in slower than expected, stocks gap-opened sharply higher and moved roughly sideways at elevated levels for the rest of the session.
The Nasdaq Composite Index closed at its highest level since August 1, and the broader S&P 500 Index and the Dow Industrials ended at two-month highs.
Small-caps, which have been underperforming in recent sessions, played catch-up, with the Russell 2,000 Index rallying strongly and turning to black for the year.
The buying interest was broad-based, with real estate, utility, material, and consumer discretionary stocks leading the upsurge.
US Index Performance On Tuesday
Index Performance (+/-) Value
Nasdaq Composite +2.37% 14,094.38
S&P 500 Index +1.91% 4,495.70
Dow Industrials +1.43% 34,827.70
Russell 2000 +5.44% 1,798.32
Analyst Color:
Tuesday’s upside could be a “bit of an overreaction,” said fund manager Louis Navellier. He expects the S&P 500 Index to bounce off the 4,500 level potentially. “But the trend is very positive, and the year-end rally is likely to draw in new funds, and there’s plenty on the sidelines,” he said.
Tom Lee of Fund Strat, who had the highest year-end target for the S&P 500 Index, said all rallies start with short covering, as he noted that beaten-down stocks advanced the most on Tuesday. “There is so much money on the sidelines that the inflows into year-end are going to create a lot of market breadth,” he added.
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