YAHOO [BRIEFING.COM]: A lack
of surprises in the latest FOMC policy statement prompted participants to push
stocks to fresh 52-week highs. The advance was broad based with advancing
issues outnumbering decliners by 4-to-1 in the S&P 500.
Given the potential impact of
the latest FOMC policy statement, market participants were inclined to ignore
early economic data. Among the reports, annualized housing starts for February
hit a higher-than-expected rate of 575,000 and building permits for February
made a smaller-than-expected dip to an annualized rate of 612,000. Meanwhile,
import prices made a slightly steeper-than-expected 0.3% monthly dip in
February.
Though the reports failed to
move the market, a weaker dollar helped stocks sport modest gains ahead of the
Fed statement. The dollar dropped 0.7% against competing currencies this
session. The euro and British pound were especially strong after it was
announced that Europe's officials have come to a consensus about how to provide
financial aid to Greece. Though specific figures weren't shared, bilateral
loans are expected to play a key part in the plan. That was still enough to
compel credit analysts at S&P to take Greece off of CreditWatch, even
though the analysts have a negative outlook on the country.
Once the FOMC released its
statement that it continues to target a federal funds rate from 0.00% to 0.25%
and that it expects an exceptionally low level for an extended period of time,
stocks were able to extend their gains. Initially the advance encountered
resistance, but financials emerged to provide the broader market with
leadership.
Financials, which had traded
quietly ahead of the statement, finished trade with a 1.3% gain. The sector was
led by bank stocks, which advanced 1.7%, as measured by the KBW Bank Index.
Of the major sectors,
materials stocks made the best gains, though. They climbed a collective 1.5%
amid support from steel stocks (+2.9%) and gold stocks (+3.2%).
The advance by basic materials
stocks was helped by both broader market support and strength among commodity
prices. In general, the CRB Commodity Index climbed 1.0%. Specifically, gold
bullion prices were boosted 1.5% to $1122.50 per ounce. Oil prices climbed 2.4%
to $81.70 per barrel. Weekly oil inventory data is due tomorrow morning.
The broadly positive mood
among participants helped drive the S&P 500 and the Nasdaq Composite to
their best levels in more than a year. The Dow has yet to return to the 52-week
high that it set in mid-January.
Boeing (BA 68.72, -0.68) proved to be a drag on
the Dow this session. The stock faltered after news circulated that Air Berlin
canceled some $1.7 billion worth of firm orders for the 787 Dreamliner.
General Electric (GE 18.07, +0.78) was a leader among blue
chips, however. The company announced during a conference that losses in GE
Capital are expected to peak in 2010, such that a snap back in earnings will
occur. The company went on to issue upside guidance. The stock logged a new
52-week high just before the closing bell.
Trading volume was moderate
this session. At 1.0 billion shares it was in-line with this month's average
for the NYSE, but it remained well below the 200-day moving average of 1.2
billion shares per session on the NYSE.
Weakness in the dollar index
helped boost commodity prices this session. The energy complex, excluding
natural gas; precious metals and copper futures all traded markedly higher.
Commodities closed 1.0% higher, collectively. The dollar index is currently
down 0.7%.
Precious metals traded 1.8%
higher this session, thanks to weakness in the dollar. April gold closed 1.5%
higher at $1122.50 per ounce and May silver closed 1.5% higher at $17.35 per
ounce.
Industrial metal copper also
performed well this session; it finished 1.7% higher at $3.37 per pound.
April crude oil closed 2.4%
higher at $81.70 per barrel. Heating oil and RBOB gasoline closed 2.9% and 2.4%
higher, respectively.
On the other hand, natural gas
futures closed 1.1% lower to $4.42 per MMBtu. Natural gas futures are now down
20% since February 16.
Notably, May sugar futures
lost 5.9% to close at $0.18 per pound this session. Sugar futures are now down
about 36% since hitting a 29-year high in late January.
Advancing Sectors: Materials (+1.5%), Financials (+1.3%),
Industrials (+1.2%), Utilities (+1.1%), Energy (+0.9%), Tech (+0.7%), Consumer
Discretionary (+0.6%), Consumer Staples (+0.4%), Telecom (+0.2%), Health Care
(+0.2%)
Declining Sectors: (None) DJ30 +43.83 NASDAQ +15.80 NQ100
+0.6% R2K +0.8% SP400 +1.0% SP500 +8.95 NASDAQ Adv/Vol/Dec 1688/2.14 bln/1017
NYSE Adv/Vol/Dec 2206/1.02 bln/805