U.S. stocks finished well off of the best levels of the day but remained in positive territory amid a pause in the drop in Treasury yields that has led to an inversion of a key portion of the curve and been a major source of market uneasiness. The markets digested some mixed earnings reports, while Bed Bath & Beyond rallied sharply on a challenge to its board from an activist investor group. Stocks shrugged off softer-than-expected reads on housing construction activity and Consumer Confidence. The U.S. dollar ticked higher, crude oil prices gained ground and gold saw pressure.
The Dow Jones Industrial Average (DJIA) rose 141 points (0.6%) to 25,658, the S&P 500 Index was 20 points (0.7%) higher at 2,818, and the NASDAQ Composite increased 54 points (0.7%) to 7,692. In moderate volume, 819 million shares were traded on the NYSE and 2.0 billion shares changed hands on the NASDAQ. WTI crude oil gained $1.12 to $59.94 per barrel and wholesale gasoline added $0.02 to $1.91 per gallon. Elsewhere, the Bloomberg gold spot price decreased $5.45 to $1,316.36 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—advanced 0.2% to 96.78.
The Consumer Confidence Index declined to 124.1 in March from February’s unrevised 131.4 level and below Bloomberg estimates of 132.5. The Present Situation Index and the Expectations Index of business conditions for the next six months both dropped month-over-month (m/m). On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—moved lower to 28.3 from the 34.0 level posted in February.
The Richmond Fed Manufacturing Activity Index for March decreased to 10 from February’s level of 16, matching estimates. A reading of zero is the demarcation point between expansion and contraction.
The 20-city composite S&P Core Logic Case-Shiller Home Price Index showed a 3.6% y/y gain in home prices in January, versus expectations of a 3.8% rise. M/M, home prices were up 0.1% on a seasonally adjusted basis for January, below forecasts of 0.3% gain.
Housing starts for February fell 8.7% m/m to an annual pace of 1,162,000 units, below the forecast of 1,210,000 units, with single-family construction falling to more than offset a jump in multi-family activity. January starts were revised higher to an annual pace of 1,273,000. Building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, shrank 1.6% m/m to an annual rate of 1,296,000, versus expectations of a 1,305,000 pace, and compared to January’s downwardly revised 1,317,000 rate. Permits for single-family structures were flat m/m, while authorizations for multi-unit structures fell.
Treasuries moved lower, with the yields on the 2-year and 10-year notes rising 2 basis points (bps) to 2.26% and 2.42%, respectively, while the 30-year bond rate ascended 1 bp to 2.87%. Treasury yields recovered from a recent slide and the U.S. dollar rebounded from yesterday’s decline. The markets continued to grapple with last week’s more dovish lean from the Fed and flared-up uneasiness toward inversion of the U.S. Treasury yield curve, which helped foster late last week’s slide in the stock markets.
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