NYSE trading light before quadruple witching hour
US stocks gained yesterday, pushing the Dow to a 17-month high, after a benign February inflation reading supported the Federal Reserve’s renewed pledge of low interest rates.
The market reacted positively to a drop in the February Producer Price Index, further supporting the near-zero interest rates that have propelled the rally in equities.
On Tuesday, the S&P 500 rose above the 1,150 level that analysts had targeted as a critical resistance point, which once surpassed, could push the market higher.
However, volume remained light before a key options expiration today and on Friday, when four different types of options and futures contracts expire in a convergence known as “quadruple witching”.
“A lot of guys, if they haven’t done anything by now are just going to sit tight,” said Alan Valdes, director of trading operations for Kabrik Trading in New York.
“The market does not look like it wants to come in, though.”
The seven-session winning streak for the blue-chip Dow is the longest since an eight-day run in August 2009, when it rose 4.9 per cent. In the last seven sessions, the Dow has gained 1.7 per cent, but volume has been lacklustre.
Investors expect the S&P 500 to rise 10 per cent during 2010, according to a quarterly poll published yesterday.