U.S. equities finished solidly higher, recovering noticeably from last week’s sharp selloff that came amid trade war anxiety, as reported talks between the U.S. and China appeared to soothe nerves. Treasury yields ticked higher and the U.S. dollar fell, while crude oil prices were lower and gold was higher. In equity news, USG rallied after it rejected Knauf’s $42.00 per share takeover offer, while Facebook bounced off earlier lows that came amid confirmation from the FTC that it has opened a probe into the company’s privacy practices.
The Dow Jones Industrial Average (DJIA) surged 669 points (2.8%) to 24,202, the S&P 500 Index jumped 70 points (2.7%) to 2,659, and the Nasdaq Composite soared 228 points (3.3%) to 7,221. In moderately-heavy volume, 899 million shares were traded on the NYSE and 2.3 billion shares changed hands on the Nasdaq. WTI crude oil lost $0.33 to $65.55 per barrel and wholesale gasoline was $0.02 lower at $2.02 per gallon. Elsewhere, the Bloomberg gold spot price rose $4.54 to $1,351.87 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.4% lower at 89.05.
The Dallas Fed Manufacturing Activity Index fell to 21.4 in March from 37.2 in February—which was the highest since December 2005—and versus the Bloomberg forecast of a decline to 33.5. However, a reading above zero denotes expansion.
Treasuries finished lower, as the yields on the 2-year note rose 3 basis points (bps) to 2.29%, while the yields on the 10-year note and the 30-year bond ticked 1 basis point higher to 2.83% and 3.07%, respectively.
Today’s report kicks off the shortened week, with all domestic markets being closed on Friday and the bond market closing early on Thursday in observance of the Good Friday Holiday. Despite fewer trading sessions, the trade talks will very likely continue and could possibly intensify with the mid-week release of the advance goods trade balance and the third and final read on Q4 GDP. Tomorrow, the economic calendar will hold the S&P CoreLogic Case-Shiller Home Price Index, forecasted to show housing prices within the 20-city composite rose 6.15% year-over-year and 0.60% month-over-month on a seasonally adjusted basis. After the opening bell, Consumer Confidence will be released, with economists expecting a level of 131.0 for March, a slight move upward from February’s 130.8, as well as the Richmond Fed Manufacturing Index.
Schwab Center for Financial Research – Market Analysis Group
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