[BRIEFING.COM] Stocks pushed higher in broad-based fashion as participants took their cues this session from the dollar, which was weakened despite conflicting reports about whether Germany will lead a bailout for Greece.
Concern for the fiscal health of Greece had sent many global participants to seek safety in the U.S. dollar during recent sessions, such that the dollar hit a multimonth high against competing currencies last week. However, speculation today that Greece could receive help from Germany gave the euro strength, which dropped the Dollar Index for a near 0.7% loss this session.
There hasn't been any official statement regarding whether Germany will support Greece or if any plan would offer support to other troubled European countries, like Portugal and Spain. Notably, any such plan would likely weigh on Germany's fiscal health, but the market still treated the notion of any such effort as a positive.
Given the greenback's weakness this session, natural resource plays made the strongest moves. As such, materials stocks advanced a collective 2.5%. An upgrade of Monsanto (MON 75.72, +1.51) from analysts at Bank of America's Merrill Lynch helped shares of the seed company show leadership.
Morgan Stanley's upgrade of Caterpillar (CAT 53.53, +2.75) helped shares of the industrial outfit log their best session in nearly one month. The stock was a primary leader in the Dow, which had been up more than 200 points at its session high.
Fellow Dow component Coca-Cola (KO 54.01, +1.36) also provided leadership to blue-chips, even though it missed Wall Street's consensus earnings estimate for the latest quarter.
Energy stocks were broadly strong as all 39 of the components in the S&P 500 Energy Sector advanced this session. Their collective 2.0% gain came with help from the broader market and a 2.6% rise in oil prices to $73.75 per barrel.
This session's broad-based advanced helped financial stocks recoup some of their losses from the prior session. It had been whipsawed from an early gain of more than 1% to a modest loss before it settled with a 1.1% gain. Bank of America (BAC 14.47, -0.01) and Citigroup (C 3.18, +0.03) saw mixed interest amid news that Standard & Poor's lowered its outlook on the pair to Negative from Stable.
A weak session for Treasuries sent the benchmark 10-year Note down 19 ticks. A 2.83 bid-to-cover ratio and an indirect bidder take of 51.2% in this afternoon's $40 billion auction of 3-year Treasuries failed to offer support. The benchmark Note will be back in focus tomorrow, when a widely-watched auction of 10-year Treasury Notes will take place at 1:00 PM ET. An auction of 30-year Bonds will follow on Thursday at 1:00 PM ET.
Advancing Sectors: Materials (+2.5%), Energy (+2.0%), Industrials (+1.7%), Consumer Discretionary (+1.4%), Consumer Staples (+1.4%), Telecom (+1.3%), Financials (+1.1%), Utilities (+1.0%), Tech (+1.0%), Health Care (+0.6%)
Declining Sectors: (None)
[BRIEFING.COM] Following mixed reports regarding a Greece bailout, the euro saw a dramatic spike higher. The dollar index, heavily weighted against the euro, subsequently traded much lower, sending commodities higher.
This move in the commodity space was especially evident in the precious metals and energy complex (excluding natural gas). They finished 1.7% and 1.5% higher, respectively.
Gold and silver futures can attribute their move higher to the underlying weak dollar. At the same time, silver outperformed gold this session. March silver futures closed 2.3% higher at $15.43 per ounce and April gold futures closed 1.0% higher at $1077 per ounce.
Crude oil also traded in a very similar pattern, inversely reacting to the dollar's movements. The March contract closed 2.6% higher at $73.75 per barrel.
On the other hand, natural gas traded lower this session. March natural gas traded lower throughout the morning and closed 2.0% lower $5.29 per MMBtu.
[BRIEFING.COM] The Wall Street Journal has added to this session's flurry of headlines regarding a potential bailout for Greece. It recently reported that Germany is considering loan guarantees to support Greece and other troubled countries in Europe. Such consideration would likely address the need of Greece as well as Portugal and Spain. Though no preliminary plans have been unveiled, any sort of support would likely involve increased spending on the part of Germany or the major European nations. The market has interpreted that as a positive for the euro, which remains firmly stronger against the U.S. dollar.
With the dollar still down 0.6% against a basket of foreign currencies, stocks have been able to trade with steady gains.
[BRIEFING.COM] Gains remain strong and broad based. Within the S&P 500, materials play Dow Chemical (DOW 27.07, +1.59) and industrial outfit Caterpillar (CAT 53.78, +3.00) are primary leaders. Electronic Arts (ERTS 15.82, -1.67) is a primary laggard due to its weak outlook, which has also led to the stock's worst single-session percentage decline in one year.
[BRIEFING.COM] The stock market has entered into a relatively narrow trading range after the S&P 500 fell as low as 1060 and climbed as high as 1079. As a result of the steady action, stocks continue to sport strong, broad-based gains.
Airline stocks have been exceptionally strong this session. That has the Amex Airline Index up 6.7% in its best single-session percentage gain since early September. Strength among airlines has been underpinned by broader market support, but more so by news that UAL Corp (UAUA 15.20, +2.13) had strong operational metrics for January that included a 2.4% increase in total consolidated revenue passenger miles. The company also issued a forecast for a smaller-than-expected loss for the fiscal first quarter.
[BRIEFING.COM] Stocks have steadied their slide from session highs so that they continue to sport strong gains. The Dollar Index also remains steady as it trades with a 0.6% loss.
Results from this afternoon's $40 billion auction of 3-year Treasuries drew a yield of 3.18% with 2.83 bid-to-cover ratio and an indirect bidder take of 51.2%. The yield was higher than what had been anticipated while demand was solid, but the 10-year Note has only turned deeper into negative territory, such that the benchmark Note is now down 18 ticks. The benchmark Note will be in close focus tomorrow, when a widely-watched auction of 10-year Treasury Notes will take place at 1:00 PM ET. An auction of 30-year Bonds will follow on Thursday at 1:00 PM ET.
[BRIEFING.COM] Conflicting reports about whether the major European nations have agreed to provide support for Greece has whipsawed stocks, but buyers continue to provide broad-based support.
Stocks started the session solidly higher amid speculation over a bailout package for Greece, but the major indices soon saw their gains fade as the greenback trimmed its losses to trade just 0.1% into the red. The dollar then retreated to a 0.8% loss and stocks rallied the Dow to a 200-point gain amid news that European leaders agreed in principle to provide support to Greece, but that report was later called unfounded by a spokesperson for the German government.
Stocks have since slipped off of their session highs and the greenback has recovered from its session low to trade with a 0.6% loss, but participants continue to offer broad-based support for stocks.
Energy stocks and materials stocks are among the best performers. The two sectors are up 2.4%. Monsanto (MON 76.85, +2.64) has benefited from both broader market support and an upgrade from analysts at Bank of America's Merrill Lynch.
An upgrade of Dow component Caterpillar (CAT 53.91, +3.13) by analysts at Morgan Stanley has helped industrial stocks fare well. The sector is up 2.0%.
Fellow Dow component Coca-Cola (KO 54.65, +2.00) is also up sharply. The company missed the consensus earnings estimate for its latest quarter, but has managed to garner support anyway.
Volatility has been strong among financial stocks. The sector has swung from a plus 1% gain to a 0.2% loss and now back to a gain of 1%. Diversified financial services outfits Bank of America (BAC 14.47, -0.01) and Citigroup (C 3.19, +0.04) have seen mixed interest in the wake of Standard & Poor's decision to lower its outlook on the pair to Negative from Stable.
Support for stocks has left Treasuries to fall from favor. As such, the benchmark 10-year Note is currently down 13 ticks. That could change with the results from an auction of 3-year Treasuries (1:00 PM ET).
[BRIEFING.COM] Stocks have extended their gains so that the Dow is now up more than 2%. That puts it on track for its best single-session percentage move in three months.
Gains have also been broad based, such that all 10 major sectors in the S&P 500 are up by at least 1% -- three are up by more than 2% (energy, materials, and industrials).
With participants giving stocks such strong support, Treasuries have fallen out of favor. As such, the benchmark 10-year Note is down 13 ticks, which means its yield is back above 3.6%. Due at the top of the hour are results from an auction of 3-year Treasuries. Many expect demand to be strong, given recent concerns for the macro environment amid sovereign debt concerns.
[BRIEFING.COM] Stocks recently rallied to fresh session highs. The move coincided with a reversal in the Dollar Index, which had trimmed its loss to nearly 0.1%, but then sunk to a 0.7% loss as the euro spiked amid headlines that Europe's major governments have agreed in principle to help Greece. No final decisions have been made on the matter, though.
The greenback's pullback has been particularly beneficial to natural resource plays. In turn, energy stocks and materials stocks are up 2.3% and 2.6%, respectively. Commodities have made their way higher, too. As such, the CRB Commodity Index is up 1.2% to its best level of the session.
[BRIEFING.COM] The dollar's bounce off of its session low to a more moderate loss of almost 0.1% has taken stocks another leg lower. The health care sector even made a momentary dip into negative territory, but it has since pulled out to trade with a 0.1% gain.
In addition to the broader market's recent move lower, health care stocks have been hampered by weakness among large-cap pharmaceutical plays like Dow components Pfizer (PFE 17.77, -0.07) and Merck (MRK 36.49, -0.10). Both stocks are down more than 10% from their respective 52-week highs, which were reached in mid-January. Their pullback has inflated their dividend yields, though, such that each stock offers a dividend yield in excess of 4% at current prices.
Financials have fallen to a 0.2% loss as they extend their late-morning slide. Multiline insurers (-1.4%) are especially weak amid a disappointing quarterly report from Principal Financial Group (PFG 21.07, -1.12).
[BRIEFING.COM] In the wake of some choppy trade, stocks have suddenly slipped to fresh session lows. Gains remain broad based, though.
The broader market's move lower has come largely as a result of a reversal in shares of financials, which now trade with a gain of just 0.3% after they had been up more than 1% in the early going. Only health care stocks, which are up 0.2%, currently trade with a smaller gain.
[BRIEFING.COM] Commodities are mostly higher today on broad market strength and weakness in the US Dollar Index. The CRB Commodity Index is +0.61 at 262.13.
March crude oil has traded in positive territory for most of today's session and just pushed to fresh session highs of $73.28 per barrel. In current activity, the energy component is trading just under that level at $73.04 per barrel, up 1.6%. March natural gas was modestly higher overnight, but began to fall notably about an hour before pit trading started and fell into negative territory. Natural gas hit fresh session lows 30 minutes ago at $5.297 per MMBtu and is currently at $5.322 per MMBtu, down 1.5%.
Precious metals are slightly higher this morning on the dollar's weakness. After trading in the black for the majority of the overnight session, April gold hit its session highs of $1079.80 per ounce approximately 20 minutes before floor trading began. Gold has pulled back only slightly since then and is 0.8% higher at $1075.10 per ounce. March silver hit its own highs of $15.395 per ounce around the same time as gold and is currently trading at $15.295, up 1.4%.
[BRIEFING.COM] Financials led losses in the previous session, but the sector has bounced back to a 1.1% gain in the latest outing. Big banks and diversified financial services outfits like Bank of America (BAC 14.64, +0.16) and Citigroup (C 3.19, +0.04) make up the sector's early leaders this session, but their stock prices have started to pull back. It was recently announced that analysts at Standard & Poor's lowered their outlook on the pair to Negative from Stable.
Just released, wholesale inventories for December decreased 0.8%, which is weaker than the 0.5% increase that had been widely expected. The latest reading also marked a pullback from the upwardly revised 1.6% increase that was registered in November.
Early movers: Trading up -- ACLI +23.1%, HAR +15.3%, ADCT +15.1%, NBG +13.5%, UAUA +9.6%, DDR +9.4%, WBC +9.3%, EDC +8.2%, POOL +7.6%, ONCY +7.6%, ING +7.3%; Trading down -- TMRK -16.4%, TRGL -14.7%, CONN -12.6%, EDZ -8.7%, ENER -8.2%, ERTS -7.6%, SPRD -6%, ERY -5.9%, EEV -5.8%, FXP -5.6%, SMN -5.5%, EVEP -4.8%
Advancing Sectors: Materials (+1.8%), Energy (+1.6%), Financials (+1.1%), Industrials (+1.1%), Telecom (+0.9%), Tech (+0.9%), Consumer Discretionary (+0.9%), Consumer Staples (+0.9%), Utilities (+0.7%), Health Care (+0.3%)
Declining Sectors: (None)
[BRIEFING.COM] Stocks are up solidly in broad-based fashion as the Dow spikes more than 100 points to make its way back above the psychologically significant 10,000 level and the S&P 500 erases its losses from the previous session.
Materials stocks are the strongest performers in the early going. The sector shed more than 1% in the previous session, but is presently up 1.9% as shares of diversified metals and miners spike to a 3.5% gain in conjunction with higher precious metals prices and a weaker dollar.
Though it is still up nearly 1%, the Nasdaq Composite has pulled back a bit from its opening levels. Research In Motion (RIMM 66.32, -0.35) is a drag on the tech-rich index in the early going.
[BRIEFING.COM] S&P futures vs fair value: +11.20. Nasdaq futures vs fair value: +16.00. Speculation over a bailout for Greece has strengthened the euro at the cost of the U.S. dollar, but the greenback's pullback has helped drive higher stock futures. In turn, a strong start for the S&P 500 is taking shape, such that its near 1% loss in the previous session could come undone. However, the Dow will have to gain some more support if it is to make its way back above 10,000 -- an afternoon downturn in the previous session caused the Dow to close below the psychologically significant level for the first time in three months.
[BRIEFING.COM] S&P futures vs fair value: +11.50. Nasdaq futures vs fair value: +16.80. Stock futures continue to point to a sharply higher start for the session, but commodity futures are also strong as gold prices stand 0.9% higher at $1075.60 per ounce and oil prices sport a 1.1% gain at $72.65 per barrel in the first few moments of pit trade. Their advances come on the back of a 0.4% retreat in the Dollar Index, which has been undercut by a stronger euro amid speculation whether Greece will receive a bailout from the European Union.
[BRIEFING.COM] S&P futures vs fair value: +11.70. Nasdaq futures vs fair value: +16.30. Europe's major bourses are a bit mixed, despite ongoing speculation that Greece could receive a bailout from the European Union. Such speculation has spurred Greece's Athex Composite to a 4.1% gain. Germany's DAX is up a more modest 0.3% as Deutsche Bank (DB) provides leadership. Shares of DB are on track for their best single-session percentage advance in almost two months as they rebound from four straight losses. In German economic news, reports indicate that the country's exports increased by 3% in December. Meanwhile, France's CAC is flat, though financial issues BNP Paribas and Societe Generale have jumped out to strong gains. As for Britain's FTSE, it is up 0.5% as participants support a mixed bag of names, including Rio Tinto (RTP) and Xstrata, HSBC (HBC), and AstraZeneca (AZN). In Asia, the MSCI Asia Pacific Index tacked on 0.3%, while Japan's Nikkei slipped to a 0.2% loss. Toyota Motor (TM) climbed on short-covering trade as the company reported that it will recall 436,000 hybrid cars for braking problems. Meanwhile, competitor Nissan Motor (NSANY) reported that it returned to profit and lifted its forecast, according to a report from Reuters this morning. However, Sumitomo Mitsui Financial Group fell even though it posted its biggest profit in seven quarters on Monday. In Hong Kong, the Hang Seng advanced 1.2%. Commodity-related stocks soared. That made CNOOC (CEO) a top performer. In mainland China, the Shanghai Composite gained 0.5% in light trade.
[BRIEFING.COM] S&P futures vs fair value: +10.80. Nasdaq futures vs fair value: +15.30. Stock and commodity futures have garnered strong support amid a marked pullback in the dollar, which is currently down 0.4% against competing currencies as the euro strengthens in conjunction with speculation that Greece may receive a bailout. Though Greece's Athex Composite was able to advance a robust 3.2%, other major overseas markets have been mixed and, in turn, have made for little support. Meanwhile, an earnings miss from Dow component Coca-Cola (KO) has been shrugged off; its shares are currently priced 1.6% higher at $53.50 each ahead of the opening bell. Data remains light this morning, but wholesale inventories for December are due at 10:00 AM ET and results from an auction of 3-year Treasuries are due at 1:00 PM ET.
[BRIEFING.COM] S&P futures vs fair value: +7.60. Nasdaq futures vs fair value: +10.50.
[BRIEFING.COM] FTSE...5111.96...+19.60...+0.40%. DAX...5489.62...+4.80...+0.10%.
[BRIEFING.COM] Nikkei...9932.90...-18.90...-0.20%. Hang Seng...19790.28...+239.40...+1.20%.
[BRIEFING.COM] Weakness among financial issues took the broader market through a near-term technical support level to settle at a session low, and left the Dow to close below 10,000 for the first time in three months.
Financial stocks dropped 2.2% as participants pressured the sector after it had rallied this past Friday for a 1.2% gain. Financials traded as laggards for the entire session, but didn't drag down the broader market until late in the session.
Bank of America (BAC 14.48, -0.52) was one of the weakest performers within the financial sector. It was also a primary laggard among blue chips and helped drag down the Dow. Though the Dow has made intraday dips below the psychologically significant 10,000 level in recent sessions, this session marked the first time since early November that it actually closed below the mark.
Technical support had provided early support for the broader S&P 500 near the 1059 line in the early going and briefly into the close. However, sellers redoubled their efforts in the waning minutes of the session and caused stocks to close at session lows.
Broader market weakness inevitably dragged down shares of retailers from a 1.3% gain to a 0.2% loss. The group had found strength in better-than-expected earnings from CVS Caremark (CVS 32.72, +1.65) and Morgan Stanley's upgrade of Home Depot (HD 28.59, +0.61).
The dollar's move off of its session lows also weighed on stocks. The Dollar Index had been down 0.4% at its session low, but cut that to a 0.1% loss.
Despite that move, commodities were still able to book strong gains. As such, the CRB Commodity Index advanced to a 1.2% gain.
Advancing Sectors: (None)
Declining Sectors: Financials (-2.2%), Materials (-1.5%), Industrials (-1.1%), Utilities (-1.1%), Energy (-0.9%), Telecom (-0.8%), Tech (-0.5%), Consumer Discretionary (-0.4%), Health Care (-0.4%), Consumer Staples (-0.3%)
