US stocks end higher led by materials sector

Dow strikes another record high as Wall Street embraces the start of first-quarter earnings

US stocks ended with good gains on Tuesday, 09 April 2013. After opening on a higher note, equities alternated between gains and losses until afternoon action sent the major indices to their highs. As a result, the Dow Jones Industrial Average notched a new record high while the S&P 500 little away from its own all-time best. Equities moved up as Wall Street embraced the start of first-quarter earnings.

For the day, the Dow ended higher by 59.98 points (0.41%) at 14,673.46. Nasdaq ended higher by 15.61 points (0.48%) at 3,237.38. S&P 500 ended higher by 5.54 points (0.35%) at 1,568.61.

Nine out of ten economic sectors ended higher led by energy, materials and technology sectors. Consumer discretionary was the sole laggard.

Twenty of its 30 components finished in positive terrain, led by Microsoft and Intel.

Alcoa shares drifted between slight gains and losses a day after the aluminum producer reported results that marked the unofficial start of the earnings season. Alcoa kicked off the first quarter reporting period with a bottom-line beat, but the company's revenue of $5.83 billion represented a 2.9% year-over-year decline, and fell short of the consensus estimate.

Although two economically-sensitive sectors were in the lead, the consumer discretionary space traded lower with retailers exerting some pressure. J.C. Penney slumped 10.5% after the company's Board of Directors announced Chief Executive Officer Ron Johnson will be replaced by Mike Ullman, who has previously served as CEO.

Today's economic data was limited to wholesale inventories. Inventories declined 0.3% in February after increasing a downwardly revised 0.8% (from 1.2%) in January. The consensus expected wholesale inventories to increase 0.5%.

The drop in inventories was likely the result of better-than-expected sales growth. Wholesale sales jumped 1.7% in February after falling 0.8% in January. Wholesalers may not have been in position to maintain normal inventories levels given the size of the sales gain.

In overnight news, it was reported that China's consumer price inflation came in lower than expected, at a 2.1% annual rate in March versus expectations of a 2.4% rise. This is a bullish underlying factor for the raw commodity sector. China is the world's largest consumer of many raw commodities.

The yen hit multi-year lows versus the U.S. dollar and Euro currencies overnight. There is also talk the European Central Bank could soon lower its interest rates, in the race to devalue. Weak U.S. jobs data last week suggests the U.S. Federal Reserve will not be easing its monetary policy any time soon. The devaluation of the major currencies is also a bullish underlying factor for hard assets in the investment world, including gold and silver.

In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.5%.

Crude-oil prices ended moderately higher and settled above $94 a barrel on Tuesday, 09 April 2013 at Nymex. Prices rose after March consumer inflation in China came in below expectations, lifting prospects for energy demand, and the U.S. dollar weakened against the euro. An earthquake hitting Iran on Tuesday also fuelled up prices.

Light and sweet crude for May rose by $0.84 or 0.9% to settle at $94.2 a barrel on the New York Mercantile Exchange on Tuesday.

The EIA is expected to come out with its weekly inventory report tomorrow. Market expects to see crude-oil stockpiles up 1.4 million barrels for the week ended 5 April 2013. They also are looking for declines of 1.8 million barrels each in gasoline inventories and distillate supplies.

Bullion metal prices ended higher on Tuesday, 09 April 2013. Prices traded higher due to a weak US dollar. Prices were boosted on bargain hunting following recent losses that last week pushed prices to a 10-month low. Gold for June delivery ended higher by $14.2 or 0.9% at $1,586.7 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday. May silver ended higher by 74 cents (2.7%) at $27.88 an ounce on Tuesday.

The next significant news development for the precious metals markets is likely to be Wednesday's release of the minutes from the last meeting of the U.S. Federal Reserves Open Market Committee (FOMC).

For every three stocks falling more than four rose on the New York Stock Exchange, where nearly 670 shares traded. Composite volume surpassed 3.2 billion.

Indian ADRs ended mixed on Tuesday. In the IT space, Infosys was down 0.6% and Wipro was up 0.6%. In the Banking space, HDFC Bank was up 0.03% and ICICI Bank was up 1.2%. In the Telecom space, Tata Communication was down 0.6%. In other space, Tata Motors was up 2%, Dr Reddys was up 0.14% and Sterlite was up 2.34%.

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET. In addition, March Treasury budget and the minutes from the March 20th meeting of the Federal Open Market Committee will be released at 14:00 ET. The U.S. Treasury will hold a $21 billion reopening of 10-yr notes.

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