Benchmarks rose on Monday after Crimea's vote to join Russia
was conducted peacefully. The S&P 500 moved above the key
technical level of 1,850. The Dow rose for the first time
in five sessions and all its 30 components finished in the green.
Investors focused on encouraging domestic economic numbers;
eventually helping markets return to positive territory.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 1.1% to close
Monday's trading session at 16,247.22. The Standard & Poor
(S&P 500) rose almost 1% to finish at 1,858.83. The
tech-laden Nasdaq Composite Index went up 0.8% to 4,279.95. The
fear-gauge CBOE Volatility Index (VIX) plunged 12.2% to settle at
15.64. Total volume on the New York Stock Exchange was 2.8
billion shares. Declining stocks were outnumbered by advancing
stocks on the NYSE. For 27% stocks that declined, 70% advanced.
U.S. stocks ended higher on Monday after the vote in Crimea was
conducted without any military intervention. Moreover, 'modest'
economic sanctions on some Russian and Ukraine officials did not
affect investors' mood.
Throughout the week, escalating political tension between Russia
and the West unnerved investors. Russia even threatened to invade
Ukraine and deployed troops into Crimea ahead of the referendum
On Sunday, citizens of Crimea were supposed to decide whether to
stay with Ukraine or become part of Russia. The vote turned to be
overwhelmingly in favor of accession to Russia. However, US
President Barack Obama and the European Union have refused to
recognize the vaildity of the referendum.
On the domestic front, positive economic data boosted investors'
confidence. The Board of Governors of the Federal Reserve System
reported an increase in industrial production. The report stated
industrial production rose 0.6% in February after it slipped 0.2%
in January. This rise in industrial production in February was
more than the consensus expectation of a rise by 0.2%. The gain
in manufacturing output by 0.8% and rise in mining output by 0.3%
were cited to be the reasons behind the surge in factory
production for the month of February. Separately, capacity
utilization rose to 78.8%, more than the consensus expectations
of a rise to 78.6%.
The monthly survey of manufacturers in New York State by the
Federal Reserve Bank of New York showed modest improvement in
business conditions. General business conditions rose to 5.61 in
March, more than the consensus expectation of a rise to 5.45. New
orders climbed to 3.1 and unfilled orders index dropped to zero
The National association of Home Builders/Wells Fargo said the
U.S. homebuilders' confidence moved up in February. The sentiment
gauge went up to 47 in March from February's reading of 46.
However, for the second consecutive month the index remained
below the key level of 50.
All the 10 sectors of the S&P 500 ended in the green. The
Industrial Select Sector SPDR (XLI) and the Technology Select
Sector SPDR (XLK) led the race as both the sectors gained 1.2%.
Top holdings from the Industrials sector such as General Electric
), United Technologies Corp. (NYSE:
), The Boeing Company (NYSE:
), Union Pacific Corporation (NYSE:
) and 3M Company (NYSE:
) increased 1.3%, 1.6%, 1.9%, 1.2% and 1.9%, respectively.
Key stocks from the Technology sector such as Apple Inc. (NASDAQ:
), Google Inc. (NASDAQ:
), Microsoft Corporation (NASDAQ:
), Verizon Communications Inc. (NYSE:
) and International Business Machines Corporation (NYSE:
) rose 0.4%, 1.7%, 0.9%, 0.5% and 1.9%, respectively.