All ten sectors end higher led by energy, financials and materials sectors
U.S. stocks closed near their session highs on Tuesday, 12 April 2016 as oil settled higher for a third day in a row and at its highest price of the year. Today's session began on a wobbly note as global growth concerns and earnings prospects pressured the major averages from their opening gains. Ahead of today's session the IMF lowered its 2016 growth estimate for the global economy from 3.4% to 3.2%. Meanwhile, mixed results in Alcoa's first quarter earnings report also acted as a headwind.
The Dow Jones Industrial Average gained 164.84 points, or 0.9%, to close at 17,721.25. The S&P 500 Index rose 19.73 points, or 1%, to finish at 2,061.72, leaving it up 0.9% for the year. The Nasdaq Composite Index advanced 38.69 points, or 0.8%, to close at 4,872.09.
All ten sectors were in the green with energy, financials, and materials sectors leading the advance.
Today's economic data included March Import and Export Prices and the Treasury Budget for March 2016. Specifically, a 4.9% increase in import fuel prices in March helped drive a 0.2% increase in the price index for U.S. imports. That is the first monthly increase since June 2015, although it would be remiss not to add that the import price index is still down 6.2% year-over-year. Excluding fuel, import prices declined 0.1% for the third straight month with falling prices for consumer goods, food, and capital goods offsetting rising prices for nonfuel industrial supplies and materials. Export prices, meanwhile, were unchanged in March after declining 0.5% in February, leaving them down 6.1% year-over-year. Excluding agriculture, the price index for nonagricultural exports rose 0.3% with higher prices for nonagricultural industrial supplies and materials more than offsetting falling auto prices. That was the first monthly increase for that measure since May 2015.
Separately, the Treasury Budget statement for March showed a deficit of $108.0 billion. This Treasury data is not seasonally adjusted so the March deficit cannot be compared to the February surplus of $52.9 billion.
The U.S. Dollar Index ended its day narrowly above its flat line as losses against the Canadian dollar partially offset gains against the yen and the euro. The dollar ended lower by 1.1% against the commodity-sensitive currency. Meanwhile, the euro lost 0.2% against the dollar while the dollar/yen pair finished at 108.51 (+0.5%).
On the flipside, technology, consumer staples and utilities rounded out the leaderboard. In the influential technology sector, heavily-weighted Facebook rallied as the company's CEO Mark Zuckerberg announced a new messenger platform. Meanwhile, the broader space underperformed as Juniper Networks weighed on the networking sub-group. The stock fell 7.4% after the company lowered its top and bottom-line guidance for the first quarter.
Crude oil futures rallied to their highest settlement of the year on Tuesday, 12 April 2016, on speculation that Saudi Arabia and Russia have reached a deal to stabilize production, ahead of a meeting of key oil producers in Doha, Qatar, this weekend. Adding further support to prices, a U.S. government agency cut its forecasts on domestic crude output for this year and next.
West Texas Intermediate crude for May delivery jumped $1.81, or 4.5%, to settle at $42.17 a barrel. That marked the best settlement of the year for a most-active contract. June Brent oil added $1.86, or 4.3%, to $44.69 a barrel on London's ICE Futures exchange, which is also a 2016 high.
In a monthly report on Tuesday, the Energy Information Administration raised its price forecasts on WTI and Brent crude and cut its U.S. oil output estimates for this year and next. The Energy Information Administration issues its own figures on Wednesday morning.
Bullion prices ended with strong gains on Tuesday, 12 April 2016. Prices rose as the dollar index weakended against the basket of counterpart currencies. In precious metals, gold rallied above the previous day's close in the afternoon, consolidating to close higher by $2.80 (+0.2%) to $1260.90/oz. May silver futures closed session $0.24 higher (+1.5%) at $16.22/oz.
Tomorrow's economic data will include the 7:00 ET release of the weekly MBA Mortgage Index while March Core PPI (Briefing.com consensus 0.2%) and Retail Sales for March (Briefing.com consensus +0.1%) will be released at 8:30 ET. Finally, February Business Inventories (Briefing.com consensus -0.1%) and the Fed's Beige Book for April will be released at 10:00 ET and 14:00 ET, respectively.
Additionally, China's Trade Balance for March is tentatively scheduled to be released at 21:40 ET.
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