Aluminum Producer Alcoa Gives a Lift to U.S. Equities

Wall Street railed today on projections from Aluminum Producer Alcoa that it sees increased demand for aluminum globally in 2012. The Dow rallied 94 points, the Nasdaq rallied 27 points and the S&P 500 rallied 13 points by midday in the U.S. session. Traders on OpenBook are primarily long on the Dow (DJ30) with average limits at 12,550 and stops at 12,300.

Federal Reserve official John Williams said that the Central Bank must be prepared to use all of its policy tools to stimulate growth. He said that growth would be frustratingly slow and the unemployment rate would remain high as lack of credit and erosion of wealth continues to linger. He hinted that the Fed’s future directions would depend on the state of the U.S. economy. He expects inflation to stay below the Fed’s informal target of 2%.

Another Fed official Sandra Pianalto said that she supports more stimulus as they have been effective in the past. She said that it is difficult to impact employment through monetary policy in the long run. She expects 2.5y % growth this year and 3% in 2013. She too sees unemployment remaining at an elevated level for the next few years. Both Fed officials, who are voting members of the FOMC, are dovish on monetary policy.

Wholesale inventories in the U.S. rose 0.1% in November. The data was less than market expectations. It should be noted that rise the inventories did not keep pace with the sales gain which was 0.6%. Customers shopping for the holidays reduced inventories and encouraged manufacturers to increase production in the fourth quarter of 2011. Durable goods inventories increased 0.1% in November due to rise in inventory of electrical equipment and machinery. Automobile inventories fell 1.7% in November.