U.S. stocks traded nicely higher, logging gains for the third-straight session as consumer discretionary issues helped lead the advance. Some caution may have been exercised as market participants continue to await further developments in regard to the global trade scene. Treasury yields and the U.S. dollar were higher ahead of tomorrow’s nonfarm payroll report, while jobless claims and the trade deficit came in higher than expected. Crude oil prices were higher and gold was lower.

The Dow Jones Industrial Average (DJIA) rose 241 points (1.0%) to 24,505, the S&P 500 Index gained 18 points (0.7%) to 2,663, and the NASDAQ Composite added 34 points (0.5%) to 7,077. In moderate-to-heavy volume, 754 million shares were traded on the NYSE and 2.1 billion shares changed hands on the NASDAQ. WTI crude oil was $0.17 higher at $63.54 per barrel and wholesale gasoline was unchanged at $1.97 per gallon. Elsewhere, the Bloomberg gold spot price dipped $6.68 to $1,326.51 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly 0.4% higher at 90.49.

Weekly initial jobless claims rose by 24,000 to 242,000, versus the Bloomberg forecast calling for an increase to 225,000, with the prior week’s figure being upwardly revised by 3,000 to 218,000. The four-week moving average increased by 3,000 to 228,250, while continuing claims fell by 64,000 to 1,808,000, south of estimates of 1,843,000.

The trade balance showed that the deficit widened more than expected to $57.6 billion in February, compared to estimates of $56.8 billion. January’s deficit was revised slightly higher to $56.7 billion. Exports were up 1.7% month-over-month (m/m) at $204.4 billion, while imports were also 1.7% higher to $262.0 billion.

Treasuries finished lower, with the yield on the 2-year note ticking 1 basis point higher to 2.30%, the yield on the 10-year note rising 3 basis points to 2.83%, and the 30-year bond rate gaining 4 basis points to 3.07%.

Treasury yields and the U.S. dollar rose, while the stock market continued to see heightened volatility in the face of trade war uncertainty, the recent selloff in the technology sector, and the continued solid economic backdrop.

Schwab Center for Financial Research – Market Analysis Group

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