daytrading oct 17 pre-market

Morning traders.

Market wrap:

Improved global economic news, the prospect of a Spanish bailout and solid US corporate earnings lifted Wall Street and have Australian shares tilting at a new 14-month high today.

The December SPI 200 futures contract ended the night session 27 points or 0.6% ahead at 4519 as traders bought risk assets, including oil, metals and the Australian dollar.

The S&P 500 rallied 1.03% for its best back-to-back gain in a month. The Dow advanced 128 points or 0.95% for a third straight advance and its first triple-digit gain in a month. The Nasdaq added 1.02%.

"Positive bank earnings, a housing revival and renewed optimism regarding Europe [have made] this market extremely strong today," the chief executive officer of Lido Isle Advisors in the US told MarketWatch.

Upbeat economic news from the US and Europe helped fuel robust gains on both sides of the Atlantic. Confidence among American house-builders reached its highest level in six years this month after improving for a sixth straight month. Industrial output in the US increased 0.4% last month after a sharp drop in August.

Also helping sentiment was an improvement in German investor sentiment and signs that Spain is nearer to ending uncertainty over its debt outlook by formally requesting a bailout. An official inside Spain's finance ministry said the government was considering asking for a line of credit from the euro-zone rescue fund and was building support for the plan among European partners. Two members of German Chancellor Angela Merkel's Christian Democratic bloc said they would not oppose the Spanish plan in an apparent sign that German resistance to a bailout is softening.

The news helped Germany's DAX surge 1.58%, France's CAC 2.36%, Britain's FTSE 1.13%, Spain's IBEX 35 3.41% and Italy's FTSE MIB 2.53%.

"It's all related to the bailout," a senior equity sales trader at CM Capital Markets in Madrid told MarketWatch. "People believe the Spanish bailout is closer now after Germany indicated they were open for a precautionary line of credit and that is helping push stocks higher today."

Resource stocks were among the stand-outs in the US as commodities benefitted from an up-lift in risk appetite and a falling US dollar. Oil rallied ahead of tonight's weekly US inventory update. West Texas crude for November delivery was lately up 22 cents or 0.2% at US$92.08 a barrel.

Gold notched its first rally in three sessions as the euro benefitted from signs that the Spanish debt crisis may be nearing a decisive moment. Gold for December delivery was recently ahead $11.70 or 0.7% at US$1,749.30 an ounce.

Industrial metals struggled for traction amid lower volumes during the London Metal Exchange dinner week. US copper for December delivery was recently up one cent or 0.2% at US$3.71 a pound. In London, copper inched up 0.4%, lead 0.3% and tin 1.5%. Aluminium dropped 0.5%, nickel 0.8% and zinc 0.6%.

TRADING THEMES TODAY

STRONG START, BUT... A boom night in Europe and a strong session on Wall Street should propel the XJO to new 2012 heights in early trade today, but keep an eye on US futures after poorly-received after-market results released by IBM and Intel in the last 10 minutes. Shares in both market heavyweights are sharply lower at time of writing. The Australian market seemed to suffer a bout of vertigo yesterday, closing well below its intraday high. That suggests some willingness to take profits at these levels. In addition, Shanghai, our other major overseas lead, trailled most Asian markets yesterday. Those caveats aside, there's plenty to like in the overnight action: overseas equities up, oil and metals up, Aussie dollar up, US resource stocks up, US small caps strong.

ECONOMIC NEWS: The Melbourne Institute's leading index is due at 10.30am EST. The highlights tonight in the US are building permits, housing starts and crude oil inventories.

Good luck to all.