The Standard & Poor’s 500 Index has seen the biggest jump in the last 2 months thanks to the housing data being far better than what was forecasted earlier. The US stocks also rose thanks to this news. Things were helped further by Barack Obama’s statement where he expressed his confidence on a budget agreement with the Congress.
The S&P 500 Index rose by 1.7% and is at 1382.72 currently. The Dow Jones Industrial Average also added 1.4% and is at 12762.28. The trading in various S&P companies was almost at par with the 30-day average as well. Among others, Newmont Mining Corp. and Freeport-McMoRan Copper – both gained more than 1.3% thereby pacing up the gains in the commodity producers amidst all the tensions in the Middle East. Cisco, the largest manufacturer of computer-networking equipment in the world has also decided to buy the closely held Meraki Inc. for a price of $1.2 billion. This news helped Cisco to increase its share prices by 1.5%. Lowe’s Cos. also saw an increase of 6.9% in the share prices. Under Robert Niblock’s guidance, the company has seen high sales volume of chainsaws, generators and cleaning supplies. Amazon saw jumps of around 2.1% in its share prices and is currently at $230.04. Apple, the most valuable company in the world, also jumped to $554.64, thereby increasing by 5.1%. The biggest home improvement retailer in US, Home Depot Inc. gained around 1.4% thanks to the favorable data of the housing industry.
According to Michael Shaoul, the Chairman of Marketfield Asset Management based in New York, the US economy is finally having a good run and it should do fine, unless the Congress takes a decision that can cause a massacre. He also added that the taxation should be changed for proper equity allocations.
Thanks to the cheap borrowing costs, the sales volume of previously owned homes in US also jumped up in October. Real-estate market in US is definitely improving and the confidence among homebuilders has also seen a high never seen before, in the last few years.
The biggest publicly traded copper producer in the world, Freeport-McMoRan has also added 3.1% and is at $37.93 now. The largest gold producer in US, Newport Mining also added 1.3%. Occidental Petroleum Corp. on the other hand surged by 2.2% as well.
Not only housing industry, but, other industries did well too. Tyson Foods Inc., the largest meat producer in US has rallied to $18.35, adding around 8.7%. The company has recently declared a special dividend. The sales and earnings of the company, incidentally, have exceeded all initial forecasts in the 4th fiscal quarter. This huge boost in earnings was probably attributed by the increase in price.
MetroPCS Communications Inc. also saw a surge of 1.1%. The officials of the company have declared that they are having discussions with 8 other companies currently. They will continue with these discussions before agreeing to a merge with T-Mobile USA. This has already raised the possibility of surfacing of a counteroffer.
Incidentally, after the re-election of Barack Obama, investors have seen more than $806 billion worth American Equities being erased from the market. The price-earnings ratio of S&P 500 is currently below the ending level at 8 of the 9 bull markets.
Though overall US economic and housing industry health seems to be doing well, the investors are still not confident that a deal can be reached between Obama and Congress. According to Brian Jacobsen, the Chief Strategist at Wells Fargo Advantage Funds, the investors believe that the stock market is cheap and they are not really optimistic about the overall growth of the country in the next 10 years. He also said that expectations are low and hence rapid and big movements are expected in the overall US economy and housing industry.