daytrades feb 17 pre-market

Morning traders.

Market wrap: Fresh 32-month highs for US stocks point to a positive start to local trade despite further losses for Australian miners in overseas action.

The March SPI futures contract ended the night session 11 points or 0.2% stronger at 4923 as losses for BHP, Rio Tinto and Alumina overnight marred an otherwise bright session in the US.

Solid economic reports, upbeat corporate earnings, take-over action and an upgraded outlook from the Federal Reserve helped the major US stock indexes extend a rally that has the S&P 500 up around 13% in two and a half months. The benchmark index advanced for the fourth session in five overnight, rallying 0.63%. The Dow added 62 points or 0.5% and the Nasdaq was up 0.76% after Dell had its biggest rally in two years.

"There's just confidence everywhere - consumers, investors, corporations," the chief investment strategist and chief economist at Commonfund in the US told Bloomberg. "The economy is behaving much better than what the market has anticipated. Companies are doing even better and that helps the overall picture. That all means more room for stocks to move higher."

The Federal Reserve upgraded its GDP outlook for the year from a November range of 3 - 3.6% to 3.4 - 3.9% at its January meeting. The news helped US stocks regain their footing after a mid-morning wobble on reports that Iranian warships planned to travel through the Suez Canal, provoking condemnation from Israel.

US home-builders and materials producers led the advances after new-home construction jumped 14.6% last month. However, Australian miners lagged the action as China's rising inflation continued to weigh on sentiment. In US trade, BHP fell 1.3%, Rio Tinto 0.3% and Alumina 0.4%.

Commodity prices were mixed as traders mulled a weaker US dollar against growing signs of inflation in the developing world. Oil jagged higher after Israel alleged Iranian warships planned to travel to Syria through the Suez Canal. Crude futures were recently up 68 cents or 0.8% at $85 a barrel, boosted by a smaller rise in US inventories than analysts had predicted.

Precious metals caught a brief lift from heightened tensions in the Middle East but fell back to trade little changed. Gold for April delivery was recently up 90 cents or 0.1% at $1,375 an ounce. March silver was off 0.2% at $30.65 an ounce.

Copper finished lower for a second night during a mostly negative session for industrial metals as traders fretted over the impact of food inflation in emerging nations. In London, copper fell 1.6%, lead 1.3%, nickel 0.05% and tin 0.3%. Zinc rose 0.1% and aluminium 0.2%. US copper was recently down 0.9%.

"While the developed world can handle rising food prices fairly well, Asian countries and the emerging countries could have a problem," the president of Hackett Financial Advisors in the US told Reuters. "Higher food prices really hurt their economies. Everything is projecting that these economies are going to have a hard landing. I think that kind of fear and thinking might be starting to filter into the copper market right now."

European markets rallied for a fourth day, sending the
Stoxx Europe 600 index to its highest close since August 2008. Britain's FTSE added 0.8%, Germany's DAX 0.19% and France's CAC 1%.

TRADING THEMES TODAY

CAUTIOUS GAINS: Overall, a positive lead going into today's open, but the banks may have to do the lifting for a second straight day. The big miners slid again in US trade and weaker industrial metals prices won't help. Oilers might be ready for a bounce, even though the sharp Iran-Suez rally in crude has partly faded. Equity trading volume has been falling in the US, suggesting this long rally may finally be cresting - but I've been thinking that for weeks and the major indexes just keep grinding higher. Rising inflation could be the excuse the market needs for an overdue pullback. Wholesale prices in the US jumped again last month and the CPI is due tonight.

ECONOMIC NEWS: RBA Assistant Governor Phil Lowe is due to speak at the Committee for Economic Development of Australia from 9.10 am today. Another very heavy schedule of economic data in the US tonight includes the consumer price index and core CPI, weekly unemployment claims, wholesale sales, regional manufacturing, the leading index, mortgage delinquencies, natural gas storage and testimony from Federal Reserve Chairman Ben Bernanke on implementation of the Dodd-Frank Act before the Senate Banking Committee.

Good luck to all.