Stocks Climb Higher Ahead of Mid-week FOMC Decision…..

U.S. stocks benefited from a late-day boost to close higher in a relatively quiet session, following a volatile previous week which saw the Dow and S&P 500 again flirt with record high territory, while the Nasdaq dealt with the persistent volatility in the Information Technology sector. Optimism derived from economic reopening remained in focus today; however, with the Federal Reserve’s monetary policy decision looming mid-week, the markets seemed to tread cautiously ahead of the decision. Treasuries rose amid a decline in yields, while the U.S. dollar ticked modestly higher, as stocks in the Energy and Financials sectors were a drag on the markets. Meanwhile, gold was slightly higher in choppy action and crude oil prices were lower. Economic news was light today, with manufacturing activity in the New York region continuing to expand. M&A activity led the headlines on the corporate front, with Blackstone Group and Starwood Capital acquiring Extended Stay America for $6 billion, and Roche Holding purchasing GenMark Diagnostics for $1.8 billion. Asia finished mixed following some divergent economic news in the region, and Europe also closed mixed amid gains in travel and leisure stocks.

The Dow Jones Industrial Average rose 175 points (0.5%) to 32,953, the S&P 500 Index gained 26 points (0.7%) to 3,969, and the Nasdaq Composite advanced 140 points (1.1%) to 13,460. In moderate volume, 958 million shares were traded on the NYSE and 5.8 billion shares changed hands on the Nasdaq. WTI crude oil fell $0.22 to $65.39 per barrel. Elsewhere, the Bloomberg gold spot price nudged $4.06 higher to $1,731.17 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.2% to 91.82.

U.S. stocks began the week on a mostly positive note, with travel and leisure stocks seeing gains, as well as some value-oriented issues that stood to benefit from the expected robust economic expansion as the economy progresses to a post-pandemic environment. The moves have come amid the recent spike in bond yields, ramped-up COVID-19 vaccine rollouts and further progress on the vaccine/therapy fronts, as well as a new $1.9 trillion fiscal relief package signed by President Joe Biden and expectations that a large infrastructure spending bill could be in the offing.

Regional manufacturing stronger than expected to begin robust week

The Empire Manufacturing Index, a measure of activity in the New York region, jumped to 17.4 in March from 12.1 in February, and above the Bloomberg consensus forecast of a rise to 14.5. A reading above zero denotes growth. The report marks the night-straight month of expansion, as prices paid rose to its highest level in a decade, and inventories grew, while employment and new orders both declined modestly.

Treasuries turned mostly higher, with the rate on the 2-year note little changed at 0.15%, while the yield on the 10-year note ticked 2 basis points (bps) lower to 1.60%, and the rate on the 30-year bond declined 3 bps to 2.35%.

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