US stocks secure gains ahead of Fed's decision

Depot leads the gains among Dow components

Bulls voted for US stocks on the second trading day of November 2010 and stocks ended the day with good gains on Tuesday, 02 November 2010. Though indices pared some of their intra day gains, commodities led by materials took stocks higher as the dollar eased today. There was no economic report expected today but market participants waited eagerly for the result of the mid term elections that were scheduled to be published later in the day. Other than that, traders mulled over Federal Reserve's latest meeting that began today and looked forward to any steps that will be announced tomorrow regarding quantitative easing.



For the day, that ended on Tuesday, 02 November 2010, Dow ended higher by 64.1 points at 11,188.72. Nasdaq ended higher by 28.68 points at 2,533.52. S&P 00 ended higher by 9.19 points at 1,193.57. Dow was trading higher by 91 points earlier during the day.

All ten economic sectors ended higher for the day led by utilities, consumer discretionary, and energy sectors. Twenty-three out of thirty Dow components ended higher for the day led by Home Depot.

Among earning reports expected for the day, BP posted an upside earnings surprise. Dow component Pfizer posted better-than-expected earnings and issued in-line guidance.

Among M&A activity, Oracle Corp announced that it would pay $1 billion to acquire Art Technology Group.

Tomorrow brings the latest FOMC policy statement, which is widely expected to include plans for further quantitative easing. The Fed on Wednesday is expected to announce another round of large-scale bond purchases to push down interest rates and spur borrowing and spending. The idea of higher inflation down the road has been a weight on the dollar for multiple months.

In the currency market on Tuesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.8%. Speculation that any future measures of quantitative easing might be applied gradually or be smaller in scope have kept the dollar volatile in recent times.

Crude prices jumped to six-month highs on Tuesday, 02 November 2010 at Nymex. Weakness in the dollar propped up crude prices. On Tuesday, crude oil futures for light sweet crude for December delivery closed at $83.9/barrel (higher by $0.95 or 1.2%). This was the highest settle for crude in almost six months.

Among other energy products on Tuesday, reformulated gasoline advanced 2 cents, or 0.8%, to $2.11 a gallon. Also on Tuesday, natural-gas futures recouped some of their recent losses, with the December contract rising 4 cents to $3.87 per million British thermal units.

On Tuesday, gold for December delivery ended at $1,353.2 an ounce, higher by $2.4 (0.2%) on the New York Mercantile Exchange. December Comex silver futures ended higher by 28 cents (1.2%) at $24.84. With today's close, silver returned to its thirty-month high figure.

For every stock falling, nearly three gained on the New York Stock Exchange, where 914 million shares traded.

Indian ADRs ended mostly higher on Tuesday. HDFC Bank and Wipro Tech were the main gainers soaring 2.2% and 1.3% respectively. Tata Motors skidded 0.3%.

A barrage of economic reports begins tomorrow. Tomorrow also brings the latest FOMC policy statement, which is widely expected to include plans for further quantitative easing.