Monday, August 1, 2011

Stock Market Today

U.S. stock futures rose Sunday, indicating the Standard & Poor's 500 Index may rebound today from its worst weekly loss in a year, as President Barack Obama announced an agreement to raise the federal debt limit and avoid a default.
S&P 500 futures expiring in September jumped 1.3% to 1,308.3 this morning in Tokyo. The Dow Jones Industrial Average futures climbed 179 points, or 1.5%, to 12,267.
Obama said in remarks at the White House that both parties in the U.S. House and Senate had reached an agreement to raise the nation's borrowing limit and cut the federal deficit.
"A lot of people were short the dollar and U.S. equities into the weekend, betting that we wouldn't have a deal," said Frederic Dickson, who helps oversee $28 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Ore. "Now, investors will be reversing those positions as things are looking better than they did on Friday, even though there are still some hurdles to climb in the next 48 hours."
The S&P 500 posted a third-straight monthly loss in July, the longest streak since 2008, amid speculation Republicans in the House would fail to reach a compromise with the Senate, controlled by Democrats, and Obama to boost the nation's ability to borrow by the Tuesday deadline.
That concern helped overshadow a second-quarter earnings season in which per-share profits have exceeded analysts' projections at 78% of S&P 500 companies that reported so far, Bloomberg data show.
Both S&P and Moody's Investors Service are weighing a reduction of the U.S. credit rating. The impasse boosted to 50% the chance S&P will cut the grade from AAA within three months, the ratings company said last month.
U.S. stocks fell five straight days, driving the S&P 500 down 3.9% to 1,292.28 for its biggest weekly decline in a year. The retreat brought the benchmark gauge closer to its average price of the last 200 days of about 1,285. A drop below that level could trigger further losses, according to analysts who study charts to make forecasts.