Healthcare sector leads the gainers
U.S. stocks rallied on Wednesday, 10 April 2014 to end with the best gains in more than a month after the minutes of the latest Federal Open Market Committee meeting revealed a more dovish stance than investors expected. Equity indices held solid gains into the afternoon, with a second push coming after the release of the FOMC Minutes from the March policy meeting.
The Dow Jones Industrial Average jumped 181.04 points, or 1.1%, to 16,437.18. The Nasdaq Composite also jumped 70.91 points, or 1.7%, to 4,183.90. The S&P 500 ended the day 20.22 points, or 1.1%, higher at 1,872.18.
Eight of ten sectors posted gains, with health care ending in the lead after showing strength throughout the session. Telecom and utilities sectors ended in the red.
Investors had mixed reactions to earnings from Alcoa and Constellation Brands. J.P. Morgan and Wells Fargo are scheduled to report on Friday.
The FOMC report was arguably the most important data point of the week for the market place. The latest FOMC minutes seemed to have the Fed officials clarifying the last FOMC statement that the market place read as a bit hawkish. Specifically, the minutes revealed that policymakers are not necessarily committed to hiking the fed funds rate in the first half of 2015.
Other U.S. economic data released Wednesday included the weekly MBA mortgage applications survey, monthly wholesale trade, and the weekly DOE liquid energy stocks report. None had a significant impact on the market place.
The Wholesale Inventories report, pointed to an increase of 0.5% in February after increasing an upwardly revised 0.8% (from 0.6%) in January. The consensus expected wholesale inventories to increase 0.5%. There were concerns that strong inventory growth in February would be the result of severe winter weather conditions.
The Russia-Ukraine matter is moving back toward the front burner of the market place this week. Gold would likely see safe-haven demand increase on any escalation of this conflict.
The slumping U.S. dollar index has been a feature in the market place this week. If the greenback continues to sink it would become a more significant bullish underlying factor for the raw commodity sector.
Bullion prices ended lower on Wednesday, 09 April 2014. Gold futures settled lower as gains in the U.S. equities market lured investors away from the precious metal, but prices climbed in electronic trading from the Comex close after the release of minutes from the Federal Reserve's March meeting. Gold prices were trading near unchanged in the immediate aftermath of Wednesday afternoon's release of the minutes of the latest meeting of the Federal Reserve's Open Market Committee (FOMC).
Gold for June delivery fell $3.20, or 0.2%, to settle at $1,305.90 an ounce on the Comex division of the New York Mercantile Exchange before the release of the Fed minutes. Prices for the contract climbed from the close to trade at $1,310.20 in the electronic session shortly after the minutes.
May silver dropped 29 cents, or 1.4%, to end $19.77 an ounce before the minutes and traded at $19.85 after the minutes.
Crude oil futures settled above $103 a barrel on Wednesday, 09 April, 2014 at Nymex, finding some support from lingering concerns over unrest in Ukraine and talk that the reopening of Libyan ports may be delayed. Traders also assessed U.S. government data showing a weekly climb in crude supplies that was bigger than expected.
Crude oil for May delivery added $1.04, or 1%, to settle at $103.60 a barrel on the New York Mercantile Exchange after touching a low of $102.03 in electronic trading.
The U.S. Energy Information Administration said crude stockpiles rose 4 million barrels for the week ended April 4. Market was looking for a climb of 2.5 million barrels. The report also said that gasoline supplies fell by 5.2 million barrels, while distillate stockpiles rose 200,000 barrels. Gasoline stockpiles were expected to fall by 1.3 million barrels, while distillates, which include heating oil, were seen down 800,000 barrels.
Participation was a bit below average as less than 690 million shares changed hands at the NYSE.
Tomorrow, weekly initial claims (consensus 325K) and March Import/Export Prices will be released at 8:30 ET, while the Treasury Budget for March (consensus -$36.0 billion) will cross the wires at 14:00 ET.
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