After yesterday’s worst day in a month, things opened mixed today as the market anxiously awaited Fed Chair Janet Yellen’s talk about the state of the economy. People will extrapolate her words into the probabilities for a rate hike in two weeks, as the chances of such an event have gone as high as 90%, down to 75%. This is astounding… unless one believes that the economy is so solid and that inflation is going to continue to rise. Let us also remember that the probabilities of such an event were only 35% a week ago. 

The DOW came back from its worst levels of the session to end in positive territory, adding 2.74 points today. The NASDAQ was up 9 and the S&P barely made today’s positive list by closing 1 point ahead.

Most of the financials were higher again after taking the day off yesterday and rising on those increased probabilities of a rate hike. In addition, AAPL was higher again after sleeping through yesterday as well. The healthcare stocks did better with UNH, IBB,  going up nicely.  

Breadth numbers were negative today while the VIX dropped under 11 to close at 10.96 today. Treasury yields continued going higher with the 10-year Treasury Note up to 2.50%. This compares to the 2.31% just a week ago…because the chances for a rate hike are now higher.  The dollar was lower as the Euro idled again at that 1.05 support level. 

This was the sixth straight weekly advance for the major indices and the 100th straight day of less than 1% declines in the S&P 500. It is on its way to the next record of 105 set back in 1996.  

Economic reports showed that the February ISM Non-Manufacturing Survey, which covers 80% of the economy, rose to a two-year high at 57.6.

Donald M. Selkin

These are excerpts from Don Selkin’s Daily Market Notes, abbreviated and updated with permission from the author. Don Selkin is the Chief Market Strategist at Newbridge Securities Corporation, member FINRA/SIPC and provides the Fair Value analysis for CNBC each morning.  The commentary provided in this Market Letter is intended to provide timely market analysis and should not be considered a research report.  This Market Letter may contain, and is limited to: Discussions of broad based indices; Commentaries on economic, political or market conditions; Technical analyses concerning the demand and supply for a sector, index or industry based in trading volume and price; Statistical summaries of multiple companies’ financial data, including listings of current ratings; and, Recommendations regarding increasing or decreasing holdings in particular industries or securities.  This Market Letter does not make a financial or investment recommendation or otherwise promotes a product or service of the firm.   This Market Letter contains only news, facts, and commentary on information previously reported from a news source believed to be accurate and reliable by the author.  These news sources include the following: Bloomberg Financial, Reuters, and the Associated Press.