The market managed to recover from its early loss and finished the final session of the week modestly higher. After advancing for four straight sessions, the S&P 500 is back to one-month high. The Fed surprised market participants by announcing the first discount rate hike in more than one year after the market was closed yesterday. Investors initially rushed to purchase the US dollar and dumped the equities around the world. But later the dollar moved lower and equity market recovered. Investors seemed to take the announcement as half-glass full rather than half-glass empty because the Fed’s decision also signaled its confidence in the financial system. Separately, CPI for January advanced 0.2%, slightly below 0.3% increase expected. Core CPI, meanwhile, unexpectedly dropped 0.1% month-over-month.

Most major sectors finished the session higher led by utilities and financials. The CRB commodity index jumped 0.6%. The US dollar was higher against most major currencies. Treasury yields dropped slightly. The three-month US LIBOR was unchanged at 25 bps. The VIX index dropped less than 1 point. The market breath was positive on both NYSE and Nasdaq. The volume was similar to the previous session.

The market continued to rally on Thursday. We had some mixed economic data in today’s trading. Weekly jobless claims came in worse than expected. But traders seemed to believe it was largely due to poor weather condition. The Import Price Index, meanwhile, increased 1.4% in January from December, which was stronger than the consensus. Year-over-year, import prices increased 11.5%. Separately, housing starts for January climbed 2.8% to an annualized rate of 591K units from an upwardly revised rate of 575K units in December. The increase was better than 580K units forecast. Building permits came in at 621K, in-line with expectations but down almost 5% from the December rate of 653K.

Most major sectors finished the session higher led by telecommunication and basic materials. The CRB commodity index jumped 0.8%. The US dollar was lower against most major currencies. Treasury yields rose. The three-month US LIBOR was unchanged at 25 bps. The VIX index dropped more than 1 point. The market breath was positive on both NYSE and Nasdaq. The volume was lighter compared to the previous session.

The market advanced modestly on Wednesday following yesterday's huge gain. Better-than-expected earnings and economic data continued to support the market sentiment. Construction of new homes rose to an annual rate of 591K vs. 580K expected. Industrial production, meanwhile, rose 0.9% last month. It was the seventh straight month of growth and better than the 0.6% gain forecast. The latest Fed minutes also provided a brighter picture of the overall economy. It raised 2010 GDP forecast from 3.0% to 3.2%.

Most major sectors finished the session higher led by health care and consumer discretionary. The CRB commodity index dipped 0.3%. The US dollar was higher against most major currencies. Treasury yields rose. The three-month US LIBOR was unchanged at 25 bps. The VIX index dropped slightly. The market breath was positive on both NYSE and Nasdaq. The volume was a little heavier compared to the previous session.

The market advanced strongly in the first session of this holiday-shortened week. By close, all three major indexes were up by more than 1%. Investors seemed to believe that both the European debt issue and the Chinese growth concern wouldn't be a threat to the global economy for the near future. With reasonable valuation in the US equity market and lots of cash on the sideline, the market should see higher prices over time. In other economic news, the New York Empire manufacturing index came in better than expected.
                                               
All 10 major sectors finished the session higher led by energy and materials. The CRB commodity index jumped 2.6%. The US dollar was lower against most major currencies. Treasury yields dropped. The three-month US LIBOR was unchanged at 25 bps. The VIX index dropped slightly. The market breath was positive on both NYSE and Nasdaq. The volume was a little lighter compared to the previous session.

Market is closed for President Day.