STOCKS START DECEMBER ON STRONG NOTE -- S&P 500 REACHES NEW YEARLY HIGH -- BIOTECHS AND MATERIALS LEAD RALLY -- BOND YIELDS JUMP
S&P 500 RESUMES UPTREND... The S&P 500 is now trading at the highest level in more than a year and is reflective of a strong start to the month of December, which is traditionally the strongest month of the year. Strong economic data is boosting global stock markets, but is also putting upward pressure on bond yields. Chart 2 shows the 10-year T-note yield jumping to the highest level in three weeks. Strong economic news is usually good for stocks, but bad for bond prices. Strong stock markets overseas are also setting a positive tone for the US. The German DAX is trading up 2% today, while the Japanese Nikkei 225 jumped 3%. After an early jump to a new record high this morning, the Euro is experiencing some profit-taking. That's causing some profit-taking in gold bullion around the psychological $400 resistance barrier. Sectorwise, basic material stocks are up 2% and are the day's top sector. Biotech stocks are jumping 3% and are the top industry group for Monday.
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BIOTECHS JUMPING... The AMEX Biotechnology Index is soaring today. The daily chart shows the BTK jumping through its 50-day average and trading at the highest level in seven months. Chiron is one of the group's top percentage gainers today. The real biotech star, however, is Protein Design Labs. Chart shows PDLI soaring to a six-month high on massive volume.
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BASIC MATERIAL LEADERS... One of the beneficiaries of a strengthening global economy is Basic Material stocks. That's why the group has been doing so well over the past few months. Two of today's group leaders are shown below. Lousiana Pacific is close to a four-year high. PPG Industries is moving up to challenge its high formed during 2002. Other material leaders today are Alcoa and US Steel Group.
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