daytrading jan 3 pre-market

Morning traders.

Market wrap:

Shares are eyeing a second day of gains after Washington's last-minute budget deal fuelled Wall Street's best two-session rally in more than a year.

The March SPI 200 futures contract ended the night session 28 points or 0.5% higher at 4712 as investors snapped up risk assets, including oil, metals and the Australian dollar.

The S&P 500 surged 2.51% overnight for a two-day gain of 4.3%. All 10 sectors advanced. The Dow put on 309 points or 2.36% for back-to-back triple-digit gains and the Nasdaq charged 3.06%.

The gains came after Congress yesterday signed off on a budget deal that raises taxes on high-income earners but postpones for two months a decision on spending cuts. President Barack Obama said he will sign into law a deal that keeps the US economy from going over the "fiscal cliff" but sets up another round of budget wrangling next month.

"We are happy that we are halfway home to fixing the fiscal cliff - we figured out the revenue side and delayed the spending side," Art Hogan, market strategist at Lazard Capital Markets in the US,told MarketWatch. "As we head into the next couple of weeks, we'll get to figure out if we can make spending cuts with a scalpel or a sledge hammer."

Cyclical stocks led the advance for a second day. Overnight the Morgan Stanley Cyclical Index and Dow Jones Transportation Average both hit their highest levels since July 2011.

The night's economic data, overshadowed by events in Washington, painted a mixed picture of the economy. The Institute for Supply Management's gauge of factory activity expanded to 50.7% last month from 49.5% in November, but construction spending dipped 0.3% in November.

European markets joined the party as they re-opened after the New Year break. Germany's DAX surged 2.19%, France's CAC 2.55% and Britain's FTSE 2.19%.

A boom night on the London Metal Exchange following strong Chinese manufacturing data over New Year saw copper at a two-month high and lead nudge a 16-month peak. In London, copper jumped 3.9%, aluminium 4.75%, lead 3.9%, nickel 2.8%, tin 3.5% and zinc 4.1%. US copper for March delivery was recently ahead eight cents or 2.2% at US$3.73 a pound.

"We started off 2013 on a very positive note. The market is thinking the fiscal cliff being resolved quickly leaves the year open to maybe a better-than-expected recovery in the US economy," an analyst at Societe Generale told Reuters. "The other big thing for the metals market is a strong rebound in China that could be underway; the data is pointing to that. Sentiment is certainly risk-on."

Oil touched an 11-week high as traders bet on a brighter outlook for the US economy. Crude for February delivery was lately up $1.12 or 1.2% at US$92.94 a barrel after earlier hitting $US93.87.

Silver led gains among precious metals, rising 76 cents or 2.5% to US$30.99 an ounce. Gold for February delivery rose $10.10 or 0.6% to US$1,685.90 an ounce.

TRADING THEMES TODAY

PARTY ON WALL STREET: Wall Street and commodity markets partied hard overnight despite the half-baked nature of Washington's budget deal. Definitely a "risk-on" night and easily enough to see our market mark another 19-month high this morning. Still, the bulk of the gains likely came yesterday and some caution may be advisable in the days ahead after a virtually unbroken rise for nearly seven weeks. That doesn't necessarily mean we're at or near a top but at the least we might expect some consolidation to recharge the batteries. Meantime, there's plenty of life in the specs on both sides of the Pacific - the Russell 2000 in the US spiked 2.8% overnight. The dollar jumped around a cent to just under US$1.05 and industrial metals enjoyed huge gains.

ECONOMIC NEWS: No significant domestic economic data scheduled today. Stock exchanges in China and Japan remain closed today but China has services activity data due at noon EST. A busy night for US data includes the monthly ADP private payrolls report, weekly jobless claims, minutes from the last Federal Reserve meeting, vehicle sales and job cuts.

Good luck to all.