Yellen, Trade Figures Spread Relief

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Tuesday was a “risk on” day for investors after the nation’s trade deficit declined more than expected.

Good news from the Commerce Department’s Census Bureau had investors feeling bullish at Tuesday’s opening bell. The nation’s trade deficit declined to $34.3 billion in November compared to October’s $39.3 billion, which was downwardly revised from the initial report of $40.6 billion. Economists were expecting a decline to $39.9 billion from October’s initial reading. The fact that October’s revised reading was actually lower than economists’ estimates for November helped bolster enthusiasm.

Investors were relieved that Janet Yellen was confirmed as the next Federal Reserve Chair, without the usual legislative chaos. There is nothing the stock market hates more than uncertainty. The Dow Jones Industrial Average (NYSEARCA:DIA) picked up 105 points to finish Tuesday’s trading session at 16,530 for a 0.64 percent advance. The S&P 500 (NYSEARCA:SPY) climbed 0.61 percent to finish at 1,837. The Nasdaq 100 (NASDAQ:QQQ) surged 0.88 percent to finish at 3,557. The Russell 2000 (NYSEARCA:IWM) soared 0.91 percent to end the day at 1,157.

On London’s ICE Futures Europe Exchange, February futures for Brent crude oil advanced 64 cents (0.60 percent) to $107.06/bbl. (NYSEARCA:BNO). February gold futures declined $7.10 (0.57 percent) to $1,230.90 per ounce (NYSEARCA:GLD). Transports were successfully ice-road trucking on Tuesday, as the Dow Jones Transportation Average (NYSEARCA:IYT) climbed 0.67 percent.

In Japan, the exchange rate for the yen was again the dominant factor in stock market activity. Stocks flopped and chopped around on Tuesday as the yen spent most of the trading session between 104.22 per dollar and 104.43 per dollar. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (NYSEARCA:FXY). The Nikkei 225 Stock Average declined 0.59 percent to 15,814 (NYSEARCA:EWJ).

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