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U.S. stocks fluctuate after China data and earnings reports

TradingPub Admin | April 9, 2013

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Want some stock trading education on how financial and economic news impacts the value of equities? U.S. stocks fluctuated on April 9, as markets responded to encouraging news about China's economy and optimism about the earnings reports that companies will release this quarter, according to Bloomberg. 

Stock prices gain
The benchmark S&P 500 Index had a strong start to the day, trading 0.1 percent higher at 1,565 early in the session, according to The Wall Street Journal. The Dow Jones Industrial Average, another key measure of U.S. stocks, was up 0.2 percent at 14,635 around that time. Bloomberg reports that by 11:16 a.m., the S&P 500 had fallen slightly to trade at 1,563.41, while the Dow was at 14,626.42

Equity optimism
During the previous session, optimism that earnings grew in the recent quarter caused U.S. equities to rise in value, according to the news source. Major aluminum producer Alcoa was the first company in the Dow Jones Industrial Average to provide its earnings for this fiscal quarter, and the figures it reported managed to surpass the predictions of analysts. 

While not everyone has bullish predictions for the profits generated by these firms, individuals that have these lackluster expectations could easily see their projections outpaced, Eric Teal, chief investment officer at Raleigh, North Carolina-based First Citizens BancShares Inc., told the news source in a phone interview. 

He stated that while "analyst estimates might be a little pessimistic at this point," "earnings will have the potential to surprise on the upside." 

China
Asia's largest economy bolstered hopes that the nation's government will engage in further monetary stimulus by providing markets with inflation figures that were considered rather modest, according to The Wall Street Journal. The nation's consumer price index grew at a more modest pace in March than it did in February. 

Market participants are optimistic about the Chinese inflation data and the Alcoa earnings report, Colin Cieszynski, senior market analyst at CMC Markets, told the news source. He stated that global investors are in the process of "going through the aftereffects of last week's selloff" and are currently anticipating the next major happening that will provide asset prices with a significant change in value. 

Continued gains
"The market just keeps pushing forward," Mark Freeman, who manages around $14 billion as chief investment officer at Dallas-based Westwood Holdings Group Inc., told Bloomberg in a phone interview. "As we go into earnings season, it's going to be very interesting and important to see exactly whether or not this resiliency is sustained and ultimately supported by what companies report from an earnings perspective." 

U.S. stocks have been experiencing robust gains, as the S&P 500 Index surged 13.4 percent in 2012 and then continued this strong performance to gain more than 10 percent in the first quarter of 2013 and reach new record levels. The Dow has also been enjoying these sharp gains, also rising more than 10 percent in the first quarter. 

Strong bull market
The S&P 500 Index has surged more than 100 percent since reaching its recent low in March 2009, the media outlet reports. These gains have been fueled by strong earnings growth reported by major corporations and also robust monetary stimulus provided by the Federal Reserve Bank. Central banks across the world have been on the same page, harnessing low interest rates and substantial asset purchases in order to amplify economic growth. 

If other companies follow Alcoa in reporting earnings that beat expectations, such an event could serve to draw more interest to equities, Daniel McMahon, director of equity trading at Raymond James & Associates, told The Wall Street Journal. 

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