Mild opening rise; awaiting more econ data after tame GDP
U.S. stocks are expected to open slightly higher after a tame GDP report and will now wait on a raft of numbers slated for a 10:00 a.m. ET release. Overseas trends were mixed, with Europe firm and Asia lower. The Dow should open up about 50 points, meanwhile, the Russell 2000 (NYSE:IWM) should open modestly higher, near 476.25.
The final revision to third-quarter GDP was not changed, and hit the forecast on the nose at a decline of 0.5%, which is consistent with an economy that is in recession. Fourth-quarter GDP is expected to reflect further deterioration. There will be data on home sales and consumer sentiment later this morning that could set the tone for trading.
In overseas trading, Asian stocks took a hit, with Hong Kong off 2.7%, China down 4.8%, Taiwan down 2.8%, Australia off 0.7%, Singapore down 1.2%, South Korea down 3.2% and India off 2.4%. Japan markets were closed for a holiday.
Both U.S. automakers received credit downgrades, with Standard & Poor’s slashing the rating for General Motors Corp. (NYSE:GM), while Moody’s cut the ratings for Ford Motor Co. (NYSE:F). GM shares were off some 4% in pre-market trading.
After the close Monday, Textron Inc. (NYSE:TXT) said it would exit all non-captive financial businesses and trim some 2,200 jobs as the aircraft maker tightens operations because of the recession. TXT was off 11% in pre-market trading.
Looking at the intraday chart, there was a great double bottom on hourly studies on the lows late Monday near our support point at 461. That will be crucial short-term support today if the market starts to rollover. On the upside, resistance is at 479 to 481, then the major point is up at 491.
