YAHOO [BRIEFING.COM]: Stocks
started off on a positive note after China refrained from hiking it benchmark
interest rate despite a hotter-than-expected CPI number, and instead insisted
they would continue to observe a strong growth policy despite the uptick in
prices. Stocks strengthened throughout much of the session, but began giving
back their gains in the final hour of trading. The Dow was able to eek out a
small gain of 0.2%, while the S&P 500 closed flat, and the Nasdaq slipped
into negative territory and closed down 0.5%. Today's late day selloff
prevented the Dow from closing at a 2-yr high after it was trading above its
November 5th close of 11444.08 within the final 10 minutes of the session.
Weakness in the greenback was
prevalent all session long after Moody's said the passage of the tax cuts would
have ramifications, and may lead to the U.S. being placed on negative outlook
down the road. The soft dollar pushed the euro to 1.3400, while the pound saw a
session high just shy of 1.5900. Dollar/yen once again failed above 84.00, a
level where it has had trouble for the past three weeks.
Energy stocks outperformed all
session long, gaining 0.8%, as the weak dollar sent buyers into commodity
related stocks. Cabot Oil & Gas (COG 36.99, +1.63), National Oilwell Varco (NOV 63.99, +1.33), and Baker Hughes (BHI 55.06, +1.14) were among the best
performing stocks in the sector.
Materials stocks saw solid
gains thanks to the weaker dollar as AK Steel (AKS 14.95, +0.37), Vulcan Materials (VMC 44.66, +1.38), Freeport-McMoran (FCX 115.56, +2.69), and Cliffs Natural (CLF 75.56, +1.23) led the advance.
Health care stocks eased off
their best levels of the session after a Virginia judge ruled President Obama's
health care law was unconstitutional, and ended the day with a gain of 0.1%. Thermo Fisher (TMO 55.56, +2.52) was the best performer
in the space after the company announced it was acquiring Dionex (DNEX 117.86, +19.69) for approximately
$2.1 billion, or $118.50 per share in cash, representing a 21% premium to
Dionex's close on Friday.
Treasuries posted solid gains
today as buyers moved into the market following the Fed's Permanent Open Market
Operations in which they purchased $7.79 bln worth of 2016/2017 maturities.
After touching 3.391%, its highest yield since June, the 10-yr yield ended the
day near 3.29%. The belly of the curve will end the day a little steeper with
the 2-10-yr spread running 269.2.
Volume was light with less
than one billion shares trading on the floor of the New York Stock Exchange.
It was a broad based rally in
commodities today, as all 6 sectors finished in positive territory. Soft
commodities, led by rallies in sugar, orange juice and coffee, gained 3.1%,
while precious metals added 2.3%. Trade in commodities today was largely based
around the fact that China refrained from raising interest rates following this
weekend's CPI data.
Feb gold settled higher by 1%
to $1398.00 per ounce, while March silver surged 3.7% to end at $29.62 per
ounce. Both metals also capitalized on a weaker dollar.
Jan crude oil finished up 0.9%
to $88.61 per barrel. It sold off heading into afternoon trade, essentially
moving back to the flat line. It was, however, able to bounce heading into the
close to recoup some of its earlier gains. Jan natural gas closed up 0.1% to
$4.42 per MMBtu.
Tomorrow should provide an
interesting session with the Senate expected to vote on the tax cut, as well as
releases of PPI, core PPI, retail sales, retail sales ex-auto, business
inventories, and the FOMC rate decision. DJ30 +18.24 NASDAQ -12.63 SP500 +0.06
NASDAQ Adv/Vol/Dec 1054/1.84 bln/1587 NYSE Adv/Vol/Dec 1435/962.2 mln/1582