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December 17, 2013  Tue 7:12 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
Stocks are inching higher again this morning after bouncing at a key level yesterday.

S&P 500 futures are up about 0.1 percent. European indexes are down fractionally but near their highs of the session as New York's opening bell approaches. Asia was mostly higher overnight after the strong close in the United States yesterday. The one exception was China, which fell for a second consecutive session amid concerns of weakening economic growth.

The S&P 500 rose 0.6 percent yesterday after bouncing at the key 1772 level, and at one point was up almost a full percentage point. It's been climbing steadily all year as the economy improves and money shifts from bonds to equities. Attention now focuses on the Federal Reserve's policy announcement tomorrow afternoon, with some forecasters expecting the central bank to begin reducing monetary stimulus. While such a move would be bearish in theory, it has been anticipated for months and may not have a huge impact if it occurs.

Today's calendar features the consumer-price index and the trade balance at 8:30 a.m. ET and the NAHB housing market index at 10 a.m. The housing market index is most likely to affect market sentiment. Jabil Circuit and VeriFone Systems report earnings this afternoon as well. Germany's Zew survey of business confidence already came in stronger than expected with its highest reading in 6-1/2 years.

Our researchLAB market scanner shows risk appetite increasing in the last week as small caps and international stocks outperform. Consumer discretionary stocks, industrials, and materials have also fared well, while conservative sectors like health care, consumer staples, and utilities have lagged.
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In company-specific news, Frontier Communications is indicated higher by 18 percent after agreeing to purchase AT&T's wireline operations in Connecticut for $2 billion. KKR Financial is up 29 percent after accepting a $2.6 billion stock buyout by KKR. Drug developer Targacept is down 25 percent after abandoning a potential schizophrenia treatment.

Commodities and currencies are somewhat bearish despite the gains in equity prices. Oil is lower fractionally, and natural gas is off 1 percent. Gold and silver are both down almost a full percentage point, while copper is only falling slightly. Agricultural products are mostly lower. The euro is down modestly, and the safe-haven Japanese yen is posting small gains across the board.
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