YAHOO [BRIEFING.COM]: Leadership
from the financial sector helped the stock market fight off back-to-back losses
to book a solid gain. A downturn by the dollar helped, too.
The S&P 500 was down as
much as 0.6% in the first few minutes of trade. Participants extended the prior
session's selling effort as concerns about Greece's borrowing ability were
rekindled. In fact, the cost to insure Greece's bonds climbed to a record high.
That development weakened the euro and drove the dollar modestly higher.
The mood among early morning
participants worsened with a worse-than-expected initial jobless claims count.
Initial claims fell 18,000 to 460,000 for the week ended Apr. 3. The
less-widely watched continuing claims count fell 131,000 to a better-than-expected
4.55 million, though.
Pressure against stocks
started to subside after European Central Bank President Trichet followed up
the ECB's decision to leave their target lending rate unchanged at 1.00%, as
expected, with the comment that no available information suggests Greece will
default. The euro rallied and the dollar drifted into the red in response.
While the dollar's decline
removed a formidable headwind from the stock market, it was strength in the
financial sector that provided the leadership necessary to take the broader
market on an upward march. The financial sector swung from a 0.7% loss to a
0.8% gain. Consumer finance stocks (+3.0%) and investment banks and brokerages
(+1.7%) were the best performers in the sector.
Though financials offered the
most support to the broader market, some of this session's strongest gains came
from the consumer discretionary sector, which finished 1.0% higher. A raft of
strong same-store sales results and a handful of upside earnings forecasts enabled
retailers to outperform for the entire session and settle with a 1.3% gain.
Meanwhile, better-than-expected February revenue from Nevada's Gaming Control
Board sent shares of casinos and gaming stocks in the S&P 500 to a 4.3%
gain.
Airline stocks traded with
steady strength as well. News that US Airways (LCC 7.55,
+0.73) and UAL Corp. (UAUA 20.23, +1.28) might merge carried
the Amex Airline Index to a 3.3% gain, its best move by percent in more than
one month.
Commodities were pressured for
the entire session, which culminated with a 0.8% loss for the CRB Commodity
Index.
Gold saw its recent streak of
gains come to an end as it fell fractionally to close at $1152.90 per ounce.
Silver prices settled 0.4% lower at $17.13 per ounce.
Oil prices were pushed to a
0.6% loss as they settled at $85.39 per barrel. Natural gas prices fell a much
sharper 2.7% to close pit trade at $3.91 per MMBtu following news of a
larger-than-expected build in weekly inventory.
Though there were pockets of
considerable strength and the broader market showed resilience on Thursday,
many market pundits have suggested that stocks are near-term
overbought with the S&P 500 just 0.5% below its 52-week high and new
highs becoming increasingly difficult to achieve.
Participants don't yet appear
to be taking cover in Treasuries, however. Treasuries succumbed to a mild fit
of selling as results from a $13 billion auction of 30-year Bonds failed to
impress fixed income investors. The auction drew a yield of 4.77%, which was
generally in step with what had been expected, but the bid-to-cover of 2.73 was
weaker than expected. At almost 37%, the indirect bid was higher than expected,
though.
Advancing Sectors: Consumer Discretionary (+1.0%), Telecom
(+0.9%), Financials (+0.8%), Energy (+0.6%), Materials (+0.3%), Industrials
(+0.3%)
Declining Sectors: Health Care (-0.2%), Utilities (-0.6%)
Unchanged: Consumer Staples, Tech DJ30 +29.55 NASDAQ +5.65
NQ100 +0.2% R2K +0.0% SP400 -0.2% SP500 +3.99 NASDAQ Adv/Vol/Dec 1360/2.33
bln/1291 NYSE Adv/Vol/Dec 1559/1.05 bln/1440