Pocket pivot buy points were prevalent yesterday, giving the market a positive underlying tone, although these were occurring mostly in smaller stocks which, it could be argued, was indicative of some speculative froth.
However, a stronger case continues to be made by central banks for more quantitative easing as a safety net. U.S. stock futures eased declines in today's premarket trading after it was reported the European Central Bank's bond proposal would "pledge unlimited, sterilized buying" but "refrain from setting public-yield caps." Peter Boockvar, equity strategist at Miller Tabak, noted in an email that "the bond-purchase plan will only be triggered by a specific country request who then must adhere to conditions that must be met. Thus for now, no ECB action will likely begin until Spain asks for it."
In economic news, productivity of U.S. nonfarm was revised higher in the second quarter, the Labor Department reported Wednesday. Productivity rose at a 2.2% annual rate in the quarter, revised from 1.6% in the earlier estimate a month ago. This pushed productivity growth in the past four quarters up to 1.2%, compared with the earlier estimate of a 1.1% gain.
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