YAHOO [BRIEFING.COM]: A batch of better-than-expected economic data
induced broad-based buying for the first part of the session, but the upbeat
tone fell apart as stocks pushed through intraday support levels and a Treasury
auction produced disappointing results. However, an underlying bid emerged late
in the session, setting off a rally in the last few minutes of trading.
The latest durable goods orders data and new home sales figures
both turned out to be better than expected.
February durable goods orders increased 3.4%, marking the first
time in six months that orders increased. Excluding transportation, orders
increased 3.9%. Economists expected respective declines of 2.5% and 2.0%.
February new home sales increased 4.7% month-over-month to an
annualized rate of 337,000. Economists predicted a 2.9% decline.
The upbeat data helped the financial sector build on early
strength. Financials had climbed as high as 6.5%, led by diversified financial
services stocks (+7.4%). Bank of America (BAC
7.70, +0.48) was a top performer after a report indicated the company plans to
soon repay federal aid. Financials turned sharply lower amid a broad-based,
afternoon selling effort, which took the sector to a loss of 2.5%, but
financials rebounded to close with a 4.6% gain.
The afternoon's selling effort gained momentum after the S&P
500 failed to find support at the 818 level, which had provided intraday
support in the early going. Selling intensified after weak demand for a
government auction of 5-year Treasuries led to a jump in yields. The
disappointing auction followed an auction of Gilts, or British debt securities,
by the
The weak auctions suggest investor appetite for government debt
carrying low interest rates is waning, which will bring future auctions into
closer focus. As such, tomorrow's auction of 7-year notes now has a much higher
level of importance.
Sellers took the stock market to a loss of 1.8%, but a late,
broad-based rally effort helped stocks close the session with a solid gain. The
blue chip Dow Jones Industrial Average outperformed the other headline indices
by closing 1.2% higher, but the Small-Cap Russell 2000 fared even better by
putting together a 2.3% gain. The Nasdaq
100, which is rich in large-cap tech names, lagged by closing just 0.2% higher.
Tech giant IBM
(IBM 97.89, -0.41) closed lower after an article from The Wall Street Journal stated the
company is planning layoffs, despite its profile as a strong company. The
announcement comes as a reminder that near-term economic prospects haven't
improved materially.
On a related note, Automatic Data Processing (ADP 35.62, -0.81) lost
ground after trimming its outlook. The company expects revenue
for fiscal 2009 to grow from 1% to 2%, which is down from the prior range of 2%
to 3%. The company also expects earnings growth from continuing operations to
come in at the low end of the range 10% to 14%.
The final fourth quarter GDP reading is due tomorrow morning, as
are weekly jobless claims (8:30 AM ET). Best Buy (BBY 33.46, +0.22), ConAgra (CAG 15.56, +0.14), and GameStop (GME 26.84, -0.21) also report before
Thursday's opening bell.DJ30 +89.84 NASDAQ +12.43 NQ100 +0.2% R2K +2.3% SP400
+1.2% SP500 +7.76 NASDAQ Adv/Vol/Dec 1692/2.15
bln/979 NYSE Adv/Vol/Dec 2137/1.77 bln/923