Midday Update: Wall Street Encouraged By Consumer Spending, Outlook For Central Bank Activity
Buoyed by upbeat consumer spending and prospects for new global stimulus measures, stock prices were sharply higher Friday with the beleaguered Nasdaq Composite index finally outperforming the Dow Industrials and the S&P 500.
Comments last night from Premier Li Keqiang endorsing additional stimulus measures to jump-start the Chinese economy, coupled with inflation data from Spain today underscoring deflation risks in the EU-zone gave global equity markets a shot in the arm and set the stage for constructive gains in the U.S.
The overnight gains accelerated after the U.S. Commerce Department reported a a 0.3% gain in consumer spending during February, matching expectations. Upon closer examination, however, the data was not as bullish as the headline number. The majority of spending was on healthcare and energy, but was down for the third consecutive month for big-ticket items, often considered a barometer of consumer sentiment. Furthermore, January spending revised lower, falling to a 0.2% gain from the 0.4% initially reported.
Personal income rose an as-expected 0.3% last month following an unrevised 0.3% gain in January.
Other economic data today included the Reuters/University of Michigan consumer sentiment index which was revised upward to a final 80.0 reading in March from the initial read of 79.9. The final number, however, was down from February's final read of 81.6. It also was the lowest since November 2013.
European equities also put in a strong performance Friday in the wake of a larger-than-expected drop in the Spanish Consumer Price Index. Overseas investors ignored bullish indicators on UK and EU consumer confidence, focusing instead on what impact the recent inflation data will have on European Central Bank monetary policy. The negative impact of deflationary price pressure on wages and the economy is expected to encourage the ECB to lower interest rates at the April 3 monetary policy meeting.
Crude oil was up $0.32 to $101.62 per barrel. Natural gas was down $0.04 to $4.50 per 1 million BTU. Gold was down $1.60 to $1,293.10 an ounce, while silver was up $0.10 to $19.81 an ounce. Copper was up $0.05 to $3.04 per pound.
Among energy ETFs, the United States Oil Fund was up 0.44% to $36.66 with the United States Natural Gas Fund was down 0.04% to $25.09. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 1.35% to 24.04 while SPDR Gold Shares are down 0.19% to $124.36. The iShares Silver Trust was up 0.05% to $19.01.
Here's where the markets stand at mid-day:
NYSE Composite Index up 87.41 (+0.84%) to 10,460.85
Dow Jones Industrial Average up 124.27 (+0.76%) to 16,388.50
S&P 500 up 14.69 (+0.79%) to 1,863.73
Nasdaq Composite Index up 35.64 (+0.86%) to 4,186.87
Nikkei 225 Index up 0.50%
Hang Seng Index up 1.06%
Shanghai China Composite Index down 0.24%
FTSE 100 Index up 0.34%
CAC 40 up 0.70%
DAX up 1.33%
NYSE SECTOR INDICES
NYSE Energy Sector Index up 1.03%
NYSE Financial Sector Index up 0.56%
NYSE Healthcare Sector Index up 0.81%
(+) TSLA (+3.60%) Government regulators close case surrounding car fires.
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(-) SHI (-7.59%) Company says the outlook for petrochemicals was "sluggish."
(-) LPDX (-19.10%) Q1 revenue outlook cut after contract termination.
(-) MBLX (-12.14%) Reported another Q4 loss as revenue fell