(RTTNews) - The US dollar reached 1.3812 against the euro around 8:40 am ET Tuesday, the lowest level since March 17. On the downside, the greenback may test support around the 1.3830 level.
by RTT Staff Writer
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NEW YORK (AP) - Stocks rose Tuesday following news that activity expanded in the U.S. services sector last month.
World markets also rose after the central bank of Japan suprised investors by slashing interest rates to near zero.
The Institute for Supply Management reported that the U.S. services industry grew slightly faster in September as demand from customers improved. It was the ninth straight month of expansion in services, which have been growing at a slower pace in the U.S. relative to the much smaller manufacturing sector.
In corporate news, Mexican broadcaster Grupo Televisa said it would invest $1.2 billion in Univision Communications, expanding a license deal between the Spanish-language media heavyweights. Televisa's U.S. shares rose 9.4 percent.
The Dow Jones industrial average rose 168.93 points, or 1.6 percent, to 10,920.20 in early afternoon trading. Caterpillar Inc. and chemical maker DuPont posted the biggest gains in the Dow, and all but two of the average's 30 components were up.
The Standard & Poor's 500 index rose 20.54, or 1.8 percent, to 1,157.57. The index hadn't traded above 1,150 since mid-May, not long after stocks reached their highest levels of the year in late April.
Robert Pavlik, chief market strategist at Banyan Partners LLC in New York, cites another factor in today's upward swing: Even when stocks have fallen lately, the S&P 500 has managed to stay above 1,130, a key technical barrier that it had broken through on Sept. 20. He said that has given jittery investors confidence to buy.
"A lot folks who have cash on the sidelines are being drawn into the market because they don't want to be left behind," Pavlik says. "I think there's potential to get to 1,200 by the end of the year."
The Nasdaq composite index rose 47.69, or 2 percent, to 2,392.21.
In a surprise move, Japan's central bank cut its key interest rate to virtually zero and is looking to buy government bonds in an effort to boost the faltering Japanese economy. Japan has been struggling with a strong currency and falling prices, and authorities there intervened in currency markets last month to weaken the yen, but the impact was short-lived.
U.S. traders have their eyes set on some key economic and corporate reports this week, including earnings reports Thursday from PepsiCo Inc. and Alcoa Inc. On Friday, the Labor Department delivers its monthly jobs survey, the most important report on the economic calendar.
Investors are also hoping for more action from the Federal Reserve to boost the U.S. economy, and got more encouragement from remarks by Fed Chairman Ben Bernanke late Monday. Bernanke said the economy could be helped by another round of asset purchases by the central bank, and hopes are building that the Fed could announce new measures at its next meeting Nov. 2-3.
Stocks were also trading higher in Europe. Britain's FTSE 100 rose 1.6 percent, Germany's DAX index rose 1.5 percent, and France's CAC-40 rose 2.4 percent. Hong Kong's Hang Seng index rose 0.1 percent.
About five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 490 million shares.
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Benchmark copper for three-months delivery on the London Metal Exchange traded at $8,105 a tonne at 0949 GMT from a close of $8,064 on Monday.
"Further dollar weakness is certainly driving things and that is really a response to strengthening euro," Daniel Brebner, analyst at Deutsche Bank, said. "The market is reacting to further monetary accommodation out of Japan.
"We've seen very strong pricing in the precious metals and there's a bit of a sympathetic move on the base metals complex because they do react to macroeconomic policy."
The Bank of Japan on Tuesday pledged to pump more funds into the struggling economy and keep interest rates virtually at zero, surprising markets and stealing a march on the Federal Reserve in providing a fresh dose of economic stimulus.
The dollar index hit an 8 1/2-month low against a currency basket as demand for the euro put the US currency under broad selling pressure.
Metals tend to benefit as the dollar falls, because a weaker dollar makes them cheaper for holders of other currencies.
Gold rallied to an all-time high, lifting silver to its highest in 30 years as worries about the eurozone economy highlighted bullion's perceived safe-haven appeal.
Markets in China, the world's top consumer of base metals, are closed until Friday for National Day holidays.
Looking ahead Tuesday's macro calendar, the Redbook weekly US retail sales index and the ISM non-manufacturing index are due later.
Investors will also look out for a key jobs report later this week for further clues on the pace of recovery in the world's largest economy.
If the economic data remains lacklustre, it will likely reinforce bets that the US Federal Reserve will embark on more quantitative easing, which should erode dollar values further and bolster the appeal of metals as a hedge against inflation.
Copper, used in power and construction, is expected to retrace to $7,980, as a small double-top formed around $8,178 per tonne.
"This week should be fairly quiet with China out. Prices are running hard, and to me look a little frothy. Once the excitement about LME Week fades I think we'll see selling," said Ben Westmore, commodities economist at National Australia Bank.
"Copper at $8,000 is just too high to justify from a fundamental perspective. These levels will be hit on more sustainable basis mid to late next year."
Each year the metals industry assembles in London around the second week in October for a series of conferences, meetings and receptions that surround the event.
Market balances in copper have been tightening for many months now, with stocks in LME warehouses tumbling more than 30 per cent since the middle of February. Tuesday's data showed LME stocks down 350 tonnes to 374,100 tonnes.
Among other metals, aluminium traded at $2,355.25 a tonne, down from Monday's close of $2,363.
Earlier, trade was disrupted by an input error resulting in the cancellation of more than 200 lots of aluminium. Prices of aluminium fell by more than 3 percent for a few seconds before recovering after what traders described as a "big figure typo."
Battery material lead traded at $2,283.50 from $2,277, while stainless steel ingredient nickel traded at $24,100 versus $24,140.
Tin traded at $25,450 versus $25,200 and zinc at $2,237 versus $2,230 at the close on Monday.
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Having the following in place could assist you in getting started right away in Forex trading (currency trading): a Forex trading software platform; a free Forex trading strategy (or a paid for one for that matter); an understanding of fundamental and technical analysis and a trading risk management system. From these elements (and also the support of a daily Forex strategy briefing from a margin broker or some other site) you can start Forex trading in the fx market with your own Forex trading strategy rules.
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Forex strategy testing can either be done through using a practice account through your broker or by paper trading your strategy. A third option is to use software such as Forex strategy tester which can run a simulation of what could happen if you trade by your rules with some limitations on accuracy.
Free Forex trading strategy tips are available from Forex ebooks webistes all over the web. The truth is that the Forex trading fx market needs to be treated as a business that runs like a Forex trading machine as much as possible. This is key if you are to make big Forex profits in live trading. Lack of regulation means that anyone can sell a "scalping trading strategy" or so-called "foolproof trading method" and make themselves out to be an expert or even say they are a long term bank trader when they are not. There is a need for caution therefore when deciding on where to get your Forex education because not any Forex trading guide is actually going to help in your predicting Forex prices in the near, medium or long terms.
It behooves you to go out and look at what is on offer from Forex trading websites and learn more about the global currency markets after you have read this article. Some sites are listed in the resource box at the end to start you off. Trading Forex online then presents challenges. The rest of this article will address those challenges. In order to trade effectively, a Forex trading guide is needed for the initiate in to the Forex markets to be able to learn online currency trading, understand trading risk management and how to manage money, discover technical and fundamental analysis, how these types of analysis of the market differ and how to apply them in creating a Forex trading machine.
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A proven trading method is hard to come by. There are educators who have been trading Forex for banks and other institutions for many years. However they are still going to find it incredibly difficult to pass on their years of knowledge, at least not in the time most people want to go from knowing nothing about Forex trading (currency trading) to being an expert and making money with its as a business.
In sum, it is multidimensional. There are several aspects of absolute importance. These include strategy, both in terms of trading and money management, education - both initial and ongoing and focusing in on mastering a specific area whether that be a particular currency pair or aspect within the field - such as global economics of a particular country.
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