Stocks rise steadily throughout the session in the absence of yen strength
U.S. stocks closed with modest gains on Tuesday, 04 February 2014 clawing back a fraction of their worst losses since June made a day earlier. Equities rallied steadily throughout the session in the absence of yen strength, which has been a headwind to the market since the start of the year. In fact, the yen began retreating overnight, and continued its slide into the close.
The Dow Jones Industrial Average rose 72.44 points, or 0.5% to 15,445.24. The Nasdaq Composite ended 34.56 points, or 0.9% higher at 4,031.52. The S&P 500 closed 13.31 points, or 0.8%, higher at 1,755.20.
Nine of ten sectors ended in the green with the discretionary space in the lead. Other influential groups like health care and financials also finished ahead of the broader market while technology and industrials lagged.
The largest S&P 500 sector, technology, struggled to keep pace with the market even with its top component, Apple advancing 1.5%. Another large sector member, Microsoft ended little changed after announcing Satya Nadella will replace the outgoing Chief Executive Officer Steve Ballmer.
Among major stocks under focus, Michael Kors and Yum! Brands reported above-consensus earnings. KORS surged 17.3% and YUM jumped 8.9% while also providing support to their respective industry groups. P> Traders and investors worldwide are still jittery over the situation with some emerging market currencies being in turmoilalthough those troubled smaller currencies were generally seeing good behavior on Tuesday. The past couple weeks have seen investor risk appetite markedly decrease, and that's been bullish for gold and U.S. Treasuries, but bearish for the equities markets.
The feature in overnight trading was a stock market sell-off in Asia and Europe, led by Japan's Nikkei stock index being down over 4%. Some very weak U.S. manufacturing data Monday pushed the U.S. stock indexes sharply lower, and world stock markets followed overnight.
Today's economic data at Wall Street was limited to the December factory orders report. Factory orders declined 1.5% after increasing a downwardly revised 1.5% (from 1.8%) in November. The consensus expected factory orders to decline 1.7%. The durable goods data were revised slightly higher, but still left a lot to be desired. Orders fell 4.2%, which was slightly above the 4.3% decline reported in the advance release. A large portion of the decline was a result of a sharp drop in transportation demand (-9.7%), which was mostly the result of a 16.9% decline in defense and nondefense aircraft.
The recent spate of disappointing U.S. economic data now puts even more importance on Friday's monthly U.S. jobs report for January. The early forecasts are for the key non-farm payrolls figure of the employment report to come in at up around 190,000 in January.
Treasuries ended near their lows with the 10-yr yield up four basis points at 2.62%.
Participation was above average as 820 million shares changed hands at the NYSE.
Gold prices ended the U.S. day session modestly lower on Tuesday, 04 February 2014 pressured by a rebound in the U.S. stock market and a firmer U.S. dollar index. Silver ended with marginal gains.
April gold traded in a consolidative pattern near the $1250 per ounce level and eventually settled with a 0.6% loss at $1251.60 per ounce. March silver dipped to a session low of $19.26 per ounce in morning floor trade but managed to recover back above the unchanged line. It brushed a session high of $19.48 per ounce and settled with a 0.1% gain at $19.43 per ounce.
Crude oil futures ended higher on Tuesday, 04 February 2014. March crude oil traded higher ahead of tomorrow's release of inventory data. Crude oil for March delivery rose 76 cents, or 0.8%, to settle at $97.19 a barrel.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the ADP Employment Change report for January will be released at 8:15 ET. The day's data will be topped off with the 10:00 ET release of January ISM Services.
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