Tech Slides as Investors Continue to Eye Yields…..

U.S. stocks closed mixed as Information Technology issues spent the day under heavy pressure as investors weighed the ramifications of the recent rise in Treasury yields on the sector. Conversely, the recent uptick in yields offered a tailwind to Financials and Energy issues, which also benefited from more upward movements in the oil market. The week pushed off with several upbeat economic reports on Leading Indicators and regional manufacturing activity. Meanwhile, Kohl’s Corporation rose on reports of activist investor action aimed at the department store’s board and Dow member Boeing Company and Raytheon Technologies were in focus following an incident with an engine on a 777 jet over the weekend. M&A news continued to pour, as M&T Bank Corporation confirmed an agreement to acquire People’s United Financial for about $7.6 billion, and Goodyear Tire & Rubber Company announced a $2.5 billion acquisition of Cooper Tire & Rubber Company. Treasuries again moved lower as yields rose, the U.S. dollar was lower, and gold increased. Asia finished mostly lower, but Japan bucked the trend, and Europe closed in the red.

The Dow Jones Industrial Average rose 27 points (0.1%) to 31,522, the S&P 500 Index was down 30 points (0.8%) at 3,877, and the Nasdaq Composite lost 341 points (2.5%) to 13,533. In heavy volume, 1.2 billion shares were traded on the NYSE and 6.4 billion shares changed hands on the Nasdaq. WTI crude oil gained $2.44 to $61.70 per barrel. Elsewhere, the Bloomberg gold spot price increased $24.17 to $1,808.42 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% lower at 90.10.

Leading Indicators top forecasts, regional manufacturing jumps as busy week begins…..

The Conference Board’s Index of Leading Economic Indicators (LEI) for January rose 0.5% month-over-month (m/m), above the Bloomberg consensus estimate calling for a match of December’s upwardly revised 0.4% increase. The LEI was positive for the ninth-straight month after the plunges in March and April, due to positive net contributions from building permits, average workweek, ISM new orders, stock prices, credit and the interest rate spread, which more than offset weakness in jobless claims.

The February Dallas Fed Manufacturing Index unexpectedly jumped further into expansion territory (a reading above zero). The index climbed to 17.2 from 7.0 in January and compared to forecasts of a decline to 5.0. Growth in new orders and production both accelerated sharply, while growth in employment slowed but remained solidly north of zero.

Treasuries were lower as the recent rise in bond yields continued, as the rate on the 2-year note rose 1 basis point (bp) to 0.11%, the yield on the 10-year note increased 3 bps to 1.36%, and the 30-year bond rate rose 4 bps to 2.17%.

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