Market wrap: The local share market should recover most of yesterday's losses at today's opening bell after U.S. investors shrugged off new health-care legislation.
Futures traders expect our market to open 26 points higher this morning. The June SPI futures contract closed at 4880 after solid gains for key U.S. stock indexes. The indexes opened underwater after the House of Representatives passed President Obama's controversial health bill late on Sunday but rallied strongly for the rest of the session.
The S&P 500 closed 0.51% stronger, the Dow climbed 44 points or 0.41% for its ninth gain in ten days and the Nasdaq added 0.88%. The health-care sector jumped higher on short-covering and the belief that universal health care will translate into more customers for hospitals and pharmaceutical companies.
"The additional folks that will be added to the insured ranks is helping pharmaceutical companies, since [more people] will now have a way to pay for drugs," one market strategist told MarketWatch.
Market observers said last night's action confirmed that Wall Street's year-long bull run is intact and investors will continue to buy any dips.
"Any short-term weakness is giving investors an opportunity to step up and do a little bargain-hunting," a market observer told MarketWatch.
"The market is doing more of the same, which is a slow crawl higher, which is occurring because prospects for the economy and for earnings are still positive," said another.
The U.S. dollar hit a 10-month high against the euro as traders bet on further turmoil in Europe over debt-laden Greece. But a pullback in the greenback as the session wore on brought some relief for commodity prices.
Crude oil futures rallied 65 cents or 0.81% to $81.33 a barrel. Gold dipped under $1,100 an ounce as traders bet that last week's surprise interest rate rise in India will weigh on demand. Spot gold was recently trading at $1,100.30 an ounce, down $7.50 on Friday's New York close.
Industrial metals came under early pressure for a second session but recovered most of their losses by the close in London. Copper edged 0.1% higher, while aluminium slipped 0.1%, lead 1.1%, nickel 0.5%, tin 0.6% and zinc 0.9%.
The major European markets had V-shaped sessions, falling with U.S. futures, then rallying with U.S. equities to close near-flat. Britain's FTSE finished 0.1% lower, while Germany's DAX and France's CAC added 0.1%.
TRADING THEMES TODAY
SOLD A DUMMY: U.S. futures once again proved a poor guide to how the market actually performed last night. Our market sold off yesterday on expectations of a big red night on Wall Street that didn't happen. We should recover most of yesterday's losses at today's opening bell. So long as interest rates remain low, Wall Street looks like grinding higher.
ECONOMIC NEWS: Nothing scheduled locally today. Tonight in the U.S.: existing home sales, the House Price Index and regional manufacturing.
