As the USA opens the first trading day of 2009 and the first trading session the stocks are headed higher. However, the reports show that the manufacturing activity declined around the globe and the Euro fell vs. the U.S. dollar and the Japanese Yen. Oil prices dropped as well.
Alfred Goldman, the Chief Market Strategist at Wachovia Securities comments on the market opening.
"2008 closed out with the worst annual return since 1931, but the last day gave investors something to cheer about as the Dow rose 109 points and the Santa Claus rally extended its gains. In-place momentum, a continued decrease in investors' fear, as measured by a drop in the VIX indicator below 40, along with the strong seasonality were the biggest factors for the rally. Overall volume was predictably modest, but surged in the last 30 minutes and more than 80% of NYSE activity was to the upside. The small cap averages and broad market also rallied late. NYSE issues closed 5/1 positive and NASDAQ issues more than 3/1 positive.
"Investors shrugged off soaring crude oil prices. A slowdown in domestic refinery capacity raised concerns of a shortage of supplies for winter heating needs. Also, short covering and ongoing hostilities in the Mideast with no cease fire were behind an intraday rise of as much as $6.51. Prices continued to ease back to less than a $4 gain in after-hours electronic trading. Interest-rate sensitive and technology stocks again provided strong leadership.
"The short-term message of the market is stocks are headed higher. Today - Oil prices are currently trading down $2.25 a barrel. Stock futures are signaling a higher opening on an expected light-volume session."
U.S. stocks rallied in the final session of 2008 on Wednesday, with some investors building positions in the hard hit financial sector after the worst year for the U.S. market since 1937. The Dow Jones Industrial Average gained 108 points to end down 34% for the year.
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