Big rally at Wall Street

Financial sector coupled with strong housing report leads the rally
US stocks rallied right out of the gate on Monday, 18 May, 2009 following a better than expected earning report from home improvement retailer Lowe's. The rally was carried forward by the financial sector which surged considerably throughout the day today. Other than that, an upbeat housing report just added further fuel to the rally and stocks ended the day with sufficient gains.
Strength in the financial sector is the main reason behind today's jump in US stocks. The Indian stock market also acted as a good booster after India's BSE Sensex struck the upper circuit twice yesterday following an unexpected thumping victory by the Congress led UPA and its alliances.
The Dow Jones Industrial Average ended higher by 235 points at 8,504. The Nasdaq Composite Index, ended higher by 52 points at 1,732. S&P 500 ended higher by 26.8 points at 909.7. Nine of the ten sectors ended in the green today. Utilities sector was the only one to end in the red.
Twenty-nine of thirty Dow stocks neded in the green today. AT&T was the sole laggard.
Home improvement retailer, Lowe's was the only widely-held company to announce its latest earnings results ahead of the opening bell today. The company's better-than-expected earnings and upbeat forecast helped support an early bias to the upside. Lowe's report much less than expected drop in first quarter profit. The company's main competitor, Home Depot, is expected to announce result tomorrow.
Among the only economic report scheduled for the day, the National Association of Home Builders reported today that encouraged by low interest rates and the re-emergence of first-time buyers, U.S. home builders' spirits improved again in May bringing its sentiment index to the highest level since the collapse of Lehman Brothers. The housing report came as a much needed boost to the market today.
The NAHB-Wells Fargo index rose to 16 in May from 14 in April on a scale of zero to 100. It's the highest since the 17 recorded in September. The index got as low as 6 in January. Before the current housing meltdown, the index had never gotten below 20 in its 24-year history. It peaked at 72 nearly four years ago. At 16, the index shows that about one in six builders thinks the market for new homes is "good." The industry trade group received 733 responses to its survey in May. The report gave a strong boost to the US stocks.
The financial sector also provided good support following the fact that Bank of America was included in convention buy list by Goldman Sachs.
Crude oil prices ended substantially higher on Monday, 18 May, 2009 erasing all of prior week's losses. Prices rose today following an upbeat housing report and better than expected earning report from retailer Lowe's which boosted overall sentiments among traders. On Monday, crude-oil futures for light sweet crude for June delivery closed at $59.04/barrel (higher by $2.69 or 4.8%) on the New York Mercantile Exchange. Last week, crude ended lower by 3.9%.
In the currency market on Monday, the greenback dollar slid against major rivals as equities improved and the sentiment of home builders improved. The dollar index, which weighs the strength of dollar against the basket of six other currencies ended lower by 0.3%.
Earnings and economic reports will be in focus tomorrow. Earning reports will feature prominent retailer like Home Depot. Market is expecting similar positive earning report from the company. The housing market will again be in focus with the 8:30ET release of the April housing start and building permits report by the Commerce Department.