Is A Rally Ahead for Stocks?

Stock index futures rose for the first day in the past three sessions as
consumer confidence for January fell less than expected. The March Dow, S&P, and
Nasdaq 100 contracts rallied strongly as consumer confidence declined less than
expected to a nine-year low of 79. This bested estimates of a 78.4 reading.

It was a tough session as stock futures traded back and forth early in the
session only to gain strength later ahead of tonight’s State of the Union
Address and ahead of the results of the two-day Fed meeting. In his speech,
President Bush is expected to call for worldwide support for a war with Iraq.
And at the Fed meeting, interest rates are expected to remain at the 41-year low
of 1.25%. At the close, the March Dow futures
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gained 62 to 8045, the March S&P
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 gained 7.20 to 854.50, and the March Nasdaq
100

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gained 10 to 998.50. 

The dollar rose for the first time in 11 sessions against the Euro on
greenback-friendly comments made by Treasury Secretary nominee John Snow. Snow 
favors a strong dollar as strong currency encourages foreign investments and
creates stability for policy makers. The March dollar
index

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rose for the second consecutive session, gaining
0.20 to 99.74. Meanwhile, the
Euro

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slipped 0.00350 to 1.0797 after rising as high as
1.08200 yesterday.  

Treasury futures fell for the second straight session after consumer
confidence for January came in better than expected. Yesterday, treasury futures
fell after UN inspectors said they needed more time to come to a conclusion,
thus delaying a possible US attack on Iraq. The outcome of tonight’s speech
could have an impact on whether the “safe haven” buying will continue. At the
close, the March 10-year contract
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fell 4/32 to 114 5/32 and the March 30-year
dropped 2/32 to 111 23/32.

Gold continued to make way into its six-year highs.
February gold

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gained 0.60 to 370. Also, the first notice
date for February gold is Friday, Jan. 31.

Finally, March Crude oil
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gained 0.36 to 32.65. Trading was somewhat quiet today ahead of the President’s
speech.