Stocks finished moderately higher today after investors shrugged off more bad news from the housing front. New home sales hit a new 7 year low, as sales of fell 8.3 percent from July to August. The Dow traded in a very narrow trading range today, and finished higher by 35 points. The Nasdaq gained almost 11 points, and the S&P 500 gained 6 points. 
After a couple days of slight consolidation, the usual suspects were back to leading the market higher today. Yes, it was the basic materials and the energy stocks leading the way.
Basic material stocks continue to benefit from sky high commodity prices. Freeport McMoran (NYSE:FCX) gained 2.78% on the day after the company declared a cash dividend to shareholders. The Mosaic Company (NYSE:MOS) continued its recent amazing run, gaining another 3.06% today. BHP Billiton (NYSE:BHP) rose 2.56% on the day.
Energy stocks were particularly strong today after oil prices surged late this afternoon on renewed fears surrounding Iran. Schlumberger Limited (NYSE:SLB) shares gained 1.97% on the day, recovering from a weak day of trading yesterday. Ultra Petroleum (NYSE:UPL) surged 4.93% after the company announced it is selling its Chinese assets. Apache Corporation (NYSE:APA) shares gained 2.7% today to reach a new yearly high.
Chinese ADR's continued their recent tear, with many Chinese stocks trading on U.S. exchanges surging again today. China Life Insurance (NYSE:LFC) rose by 3.35% to reach a new 52 week high. China Mobile (NYSE:CHL) shares jumped by 5.61% on heavy volume today. China Finance Online (Nasdaq:JRJC) gained 4.1% on stunning volume today after an analyst raised his price target on the shares.
Stocks have benefited quite nicely this week from what is like some "Window dressing" on wall street. Window dressing is a term used to describe a practice that many mutual funds use to make the fund appear more attractive at the end of the quarter. Managers will buy stocks that have done well, and sell those who have done poorly during the quarter. This likely explains why basic material and energy stocks did so nicely today, and why the market has had a nice amount of strength this week.
The Michigan consumer sentiment survey is out tommorrow morning, so that will certainly be a large economic number to watch. Personal spending and personal income are also released in the morning.
This is a very nice summary of market action. The question for investors is, of course, how to play it?
You are correct in citing tomorrow's data as relevant for the U.S. economy, but it might not affect the top sectors.
The Iran situation is an important oil factor, but some -- like Boone Pickens - talk about fundamental supply and demand.
I am always interested in your assessment of opportunity and risk.
Jeff
Posted by: Jeff | September 27, 2007 11:23 PM | Permalink to Comment