After experiencing numerous swings in and out of both side of the unchanged mark, U.S. equities finished mixed and very near the faltline, with the Dow getting a boost from an upbeat earnings report from Dow member Boeing. However, the continued rise in Treasury yields and the U.S dollar that has fomented recent concerns over financial conditions and increased inflation expectations made for the bumpy ride for the markets. Elsewhere, gold finished lower and crude oil prices were mixed.

The Dow Jones Industrial Average (DJIA) rose 60 points (0.3%) to 24,084, the S&P 500 Index added 5 points (0.2%) to 2,639, but the NASDAQ Composite lost 4 points (0.1%) to 7,004. In moderate volume, 788 million shares were traded on the NYSE and 2.0 billion shares changed hands on the NASDAQ. WTI crude oil increased $0.35 to $68.05 per barrel and wholesale gasoline was $0.01 lower at $2.09 per gallon. Elsewhere, the Bloomberg gold spot price fell $7.11 to $1,323.24 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.5% at 91.19.

The MBA Mortgage Application Index dipped 0.2% last week, following the prior week’s 4.9% gain. The slight decline came as a 0.3% decrease in the Refinance Index was met with a flat reading for the Purchase Index. The average 30-year mortgage rate rose 7 basis points to 4.73%.

Treasuries were lower, as the yield on the 2-year note rose 2 basis points to 2.49%, and the yields on the 10-year note and the 30-year bond increased 4 basis points to 3.02% and 3.21%, respectively.

Treasury yields have extended a recent rally that has the 10-year rate above 3.00% for the first time since early 2014 and the 2-year note hitting the 2.50% mark since 2008, causing some uneasiness and adding fuel to yesterday’s drop for the stock market that came after equities nudged briefly into positive territory for the year last week. The U.S. dollar has regained some upward momentum and the markets continue to grapple with concerns about tighter financial conditions and resurfacing inflation expectations, along with a solid start to earnings season and a continued strong economic backdrop.  Tomorrow’s economic calendar will be fairly busy, beginning with weekly initial jobless claims, forecasted to tick lower to a level of 230,000 from the prior week’s 232,000, followed by preliminary durable goods orders for March, expected to indicate a 1.6% m/m increase, while ex-transportation orders are expected to have risen 0.5% m/m, and nondefense capital goods ex-aircraft are anticipated to post a 0.6% m/m gain. The advance goods trade balance will also be released, with economists anticipating the deficit to shrink modestly to $75.0 billion during March from the $75.4 billion shortfall posted the month prior, while the April Kansas City Fed Manufacturing Index will round out the day, expected to remain at March’s level of 17, with a reading above zero indicating expansion in activity.

Schwab Center for Financial Research – Market Analysis Group

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