A late rally pushes US stocks moderately higher

Consumer discretionary and industrial sectors led the stock gains

U.S. stock market ended a choppy session moderately higher on Wednesday, 02 April 2014 with the S&P 500 closing at a record. Market reaction to a pair of better-than-expected economic reports was largely muted in early trading and indices pushed higher in late afternoon. Equity indices began the day near their flat lines and maintained narrow ranges into the afternoon before breaking out to fresh highs during the final 30 minutes of action.

The Dow Jones Industrial Average closed up 40.39 points, or 0.2%, at 16,573.00. The Nasdaq Composite finished the day up 8.42 points, or 0.2%, at 4,276.46. The S&P 500 index ended the day at a session high, up 5.38 points, or 0.3%, to 1,890.90, closing at a record for the eight time this year.

Consumer discretionary and industrial sector stocks led the gains. The technology sector spent the bulk of the trading day at the bottom of the leader board before clawing its way back to the flat line the close.

Among individual stocks under focus, General Motors rose 1.6% as chief executive Mary Barra returned to Capitol Hill to continue her testimony on the company's handling of a massive recall linked to an ignition defect. Monsanto shares rose 0.8% after the agricultural company reported its second-quarter earnings. The company said its fiscal second-quarter earnings grew 13% thanks to continued strength in its soybean seed sales as well as improved margins. Results beat expectations.

Among the economic data expected for the day at Wall Street, the U.S. ADP national employment report released Wednesday showed a rise of 191,000 jobs in March. The number was slightly lower than expected, but still a decent number given recent month's jobs numbers.

The other report stated that factory orders increased 1.6% in February after falling a downwardly revised 1.0% (from -0.7%) in January. The consensus expected an increase of 1.1%. The upside surprise in factory orders was a result of stronger-than-expected nondurable goods orders. Nondurable goods orders increased 1.0% in February, which more than offset the 0.7% decline in January. Durable goods orders were unrevised from the advance report, up 2.2% in February after falling 1.4% in January. Excluding transportation, durable goods orders increased 0.1% in February, down from an originally reported 0.2% gain in the advance report.

Arguably the most important economic data point of the week and of the month is Friday's March U.S. employment report from the Labor Department. The key non-farm payrolls number is expected to be up 200,000.

In overnight news, the European Union's producer price index dropped 0.2% in February and was down 1.7% year-on-year. The year-on-year decline was the largest since late 2009 and is yet another element adding to the deflation concerns in the EU. The PPI report will put more pressure on the European Central Bank to ease its monetary policy in order to jumpstart economic growth in the EU. The ECB holds its monthly monetary policy meeting on Thursday, including a press conference from ECB president Mario Draghi. Most do not expect the ECB to make a major move on Thursday, but Draghi's comments at his press conference could very well give guidance on what the ECB will do in the coming weeks.

Bullion prices ended the U.S. day session moderately higher on Wednesday, 02 April 2014. Gold prices ended a losing streak that's spanned five sessions, with prices pushing higher as economic data mount ahead of the jobs report at the end of the week.

Gold for June delivery rose $10.80, or 0.8%, to settle at $1,290.80 an ounce on the Comex division of the New York Mercantile Exchange. May silver added 36 cents, or 1.8%, to $20.05 an ounce.

Crude oil futures closed lower for a third session in a row on Wednesday, 02 April 2014 extending losses further below $100 a barrel as traders brushed off an unexpected drop in weekly crude supplies, attributing the decline to the recent temporary closure of a Gulf Coast shipping channel.

May crude oil fell 12 cents, or 0.1%, to settle at $99.62 a barrel on the New York Mercantile Exchange, for a third straight day of losses. Prices briefly dipped under $99 a barrel in the wake of the U.S. supply data. They were trading around $99.26 before the release.

On Wednesday, the U.S. Energy Information Administration said crude stockpiles fell 2.4 million barrels for the week ended 28 March 2014. Market was looking for a climb of 1.8 million barrels. The EIA also said Wednesday that gasoline supplies fell by 1.6 million barrels while distillate stockpiles rose 600,000 barrels. Gasoline stockpiles were expected to fall by 2 million barrels, while distillates, which include heating oil, were seen down 900,000 barrels.

Indian ADRs ended higher on Wednesday. In the IT space, Infosys rose 0.85% at $55.67 and Wipro added 0.36% at $13.78. In the banking space, ICICI Bank was up 0.11% at $44.32 and HDFC Bank gained 0.85% at $41.37. In the other sectors, Tata Motors gained 2.08% at $36.80 and Dr Reddy's Laboratories advanced 2.82% at $45.15.

Tomorrow, the Challenger Job Cuts report for March will be released at 7:30 ET while weekly initial claims (consensus 320K) and the February Trade Balance (consensus -$39.30 billion) will cross the wires at 8:30 ET. The final report of the dayISM Services (consensus 53.5)will be released at 10:00 ET.

Powered by Capital Market - Live News