daytrades july 29 pre-market

Morning traders.

Market wrap: An open near this year's closing low is likely following a fifth night of falls for US stocks as the deadline for raising the US debt ceiling looms with no deal in sight.

The September SPI futures contract ended the night session 4 points or 0.1% weaker at 4427 as a rally in the US petered out amid political bickering.

The Dow was lifted in early trade by improvements in jobless claims and house sales but finished 62 points or 0.51% weaker as the deadlock over the debt ceiling once again dominated the headlines. The S&P 500 lost 0.32% and the Nasdaq clung on to 0.05% of its gains.

"There is no positive news on the debt discussions out of Washington," the head of equity trading at Piper Jaffray in the US told Bloomberg. "Everyone believes, or at least hopes, that a deal will get done, but as we approach the close with no new news, traders begin to unwind risk."

Initial share market gains of around 1% were erased after Democrat Senate Majority Leader Harry Reid warned that a Republican plan to raise the debt ceiling, due to be voted on this morning in the Republican-controlled House of Representatives, will not pass the Democrat-controlled Senate. Negotiations are reportedly taking place behind the scenes on a compromise deal.

There were hopeful signs for the US economy as jobless claims eased by 24,000 to 398,000 - the lowest level since April - and contracts to buy existing homes rebounded last month after a sharp fall in May. Earnings results were mixed, with companies that missed analyst targets hit hard.

Commodities were mixed as the US dollar rallied for a second day, but the key drivers for the Australian resource sector - oil, copper and gold - had minimal changes. In US trade, BHP and Alumina both fell 0.7% and Rio Tinto lost 0.4%.

Oil jagged in and out of positive territory following the improved US economic news but couldn't gain any traction. Crude for September delivery was recently off 20 cents or 0.2% at US $97.20 a barrel.

Copper, used extensively in building, was boosted by US housing data, but other metals closed mixed. In London, copper added 0.5%, nickel 0.9% and zinc 0.1%. Aluminium eased 0.1%, lead 0.6% and tin 0.55%. US copper was recently up 0.6%.

Gold shook off early weakness as afternoon events in the US confirmed US politicians remain far apart on the debt ceiling. Gold for December delivery was recently ahead $1.20 or 0.1% at US $1,618.50 an ounce after earlier falling to around $1,605.

The major European markets remained under pressure but trimmed losses after early rises on Wall Street. Britain's FTSE put on 0.28%, Germany's DAX lost 0.86% and France's CAC fell 0.57%.

TRADING THEMES TODAY

BOTTOMING OUT?: There were promising signs overnight that a rally is in the offing if the Washington pollies ever put the debt ceiling issue to bed. Improved economic news sent US share indexes running before debt-ceiling gloom descended once again in afternoon trade. Our market will start the day precariously close to the 11-month closing low set on June 20. Ominously, this will be the third test of those levels. Futures traders appear to be betting that they will hold - let's hope so. Tech stocks, insurers and telecoms were the pick of the US sectors. REITs, airlines and gold/silver miners lost ground.

ECONOMIC NEWS: Monthly private-sector credit numbers are due at 11.30 am. Advance quarterly GDP figures are the main focus tonight in the US. Also due: advance GDP price index, employment cost index, Chicago PMI, revised consumer sentiment and revised inflation expectations.

Good luck to all.