US Stocks Higher as Confidence Returns |October 13, 2011

The Australian equity market are expected to open higher after overnight markets finished with strong gains as investors gained optimism about the Euro-zone plan to recapitalise the banks.

The Dow finished with a gain of 102.55 points or 0.90%, while the S&P500 climbed 11.71% or 0.98%. Gains were led by the financial and industrial sectors. The Dow is now 5.6% high so far this month, however the Dow is stuck in the 10,700 to 11,700 trading range which began over 2 months ago.

The plans in Europe overshadowed the weak start to 3rd quarter earnings from Alcoa, the stock fell 2.4% to $10.05 after reporting lower than expected earnings. However it was clear that the “risk on” trade is on as investor confidence slowly returns.

The EURUSD jumped yesterday as optimism over Europe’s ability to get the sovereign-debt crisis under control whetted investors’ appetite for risk, leaving the U.S. dollar broadly weaker. The euro rose to 1.3812 and is up around 4% so far this week, on pace for the biggest jump in more than a year.

Gold prices cemented their gains after European officials unveiled a plan for recapitalising the region’s banks, soothing fears about the spread of sovereign debt problems. Spot gold was last quoted at $1,673.99. Comex gold futures climbed $21.60 (1.30%) to $1,682.60. Spot silver was last quoted at $32.60.

Last Traded
SPI 200 future 4244
S&P500 Index 1207.25
Dow Jones 11560.55
FTSE 100 Index 5441.80

Last Traded
Gold 1677.05
Oil (Nymex) 84.66

Last Traded
AUDUSD 1.0143
EURUSD 1.3782
GBPUSD 1.5745
USDJPY 77.25
Bloomberg, Dow Jones News