US Market : Traders May Choose to Take Profits Following Recent Gains

Dikutip dari ADVFN Newsdesk

The major U.S. index futures are pointing to a lower opening on Monday. The lack of any major catalysts following a scintillating run up in the past four weeks places the major averages on track for a pull back, as profit taking generates selling pressure. Additionally, the forthcoming reporting season and the pre-announcement season that precedes it could leave traders jittery over the fate of corporate profits. Commodities are seeing weakness, which is likely to keep buying interest among commodity stocks subdued.


U.S. stocks extended their gains for a fourth straight week last week on strengthening hopes of a recovery. Amid trepidation over what is to befall the ailing auto sector and the anxiety stirred by the comments over the still-fluid state of the financial sector, the major averages declined sharply on Monday. However, the major averages reversed course on Tuesday, supported by the end-of-the quarter purchases by funds. Stocks advanced yet again on Wednesday, with the buying momentum kept afloat by a few positive or rather ‘not-as-bad-as expected’ economic readings.

The G20 meeting ushered in more optimism into the markets, as the major averages climbed sharply on Thursday after the G20 leaders pledged more action and funds to tackle the economic downturn. Despite trading below the unchanged line for the bulk of Friday’s session, stocks closed up on the day, as traders breathed a sigh of relief over the in-line jobs report and bought technology stocks following Research In Motion’s (RIMM) strong results.

For the week, the Dow Industrials and the S&P 500 Index rose 3.10% and 3.26%, respectively, while the Nasdaq Composite rallied 4.96%.

Among the sector indexes, the Dow Jones Transportation Average and the Amex Airline Index jumped 7.21% and 6.03%, respectively for the week. The Amex Securities Broker/Dealer Index and the KBW Bank Index rallied over 5% each. The S&P Retail Index ended up 5.82% for the week, while the Philadelphia Semiconductor Index moved up 3.18%. On the other hand, the Amex Gold Bugs Index and the Amex Biotechnology Index fell 5.52% and 3.90%, respectively.