More pre-holiday cheer on Wall Street

By CNNMoney.com staff


NEW YORK (CNNMoney.com) -- Stocks were poised to open higher on Wednesday, continuing a positive week leading up to the Christmas holiday, as investors showed little reaction to an income report and awaited new data on home sales.

Dow Jones industrial average, Nasdaq-100 and S&P-500 futures were higher. Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.

Stocks rallied for a third day on Tuesday, with the Dow and S&P 500 ending just below 14-month highs, after two economic reports fueled optimism.

The National Association of Realtors said sales of existing homes rose 7.4% on an annual basis in November and the government released its final revision of third-quarter gross domestic product, which said the broadest measure of U.S. economic activity rose at a 2.2% annual rate.

Art Hogan, chief market strategist at Jefferies & Co. in Boston, said that Tuesday's positive findings on home sales and GDP, along with progress with the healthcare bill, have all helped bolster the markets.

"I think there's a sense that the overall economy is improving," he said. "We've seen a supportive data stream. We've also seen that healthcare reform, albeit watered down, is moving through Congress."

Hogan said the healthcare bill, expected to reach its final vote on Christmas Eve, is less aggressive than its original version, and is therefore "less onerous on the health care companies."

"The nice thing is that the path of least resistance in this market appears to be higher," he said.

Economy: The government released figures for November that showed an increase of 0.4% in personal income and a 0.5% increase in personal spending.

This fell just short of forecasts from economists surveyed by Briefing.com, who projected a 0.5% increase in personal income and a 0.7% jump in spending.

A day after a surprisingly strong report on existing home sales, the government's report on November new home sales will be released at 10 a.m. ET. Economists expect the annual sales rate to rise to 438,000 from 430,000 a month earlier.

World markets: Asian markets closed higher, with Hong Kong's Hang Seng index up more than 1%; Tokyo was closed for a holiday. European indexes were higher in midday trading.

Currency and commodities: The dollar was mixed against the major international currencies: slipping against the euro and the yen but edging up against the pound.

Crude oil for February delivery rose 45 cents to $74.85 a barrel. The government's weekly crude oil supply report is due at 10:30 a.m. ET.

Gold for February delivery was flat at $1,086 per ounce, after sliding more than $20 in the prior two sessions.  To top of page

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