Markets Snap Three-day Losing Streak…..
U.S. equities finished broadly higher to snap a three-day losing streak on the heels of news that Russia has begun pulling back troops from the Ukraine border, somewhat cooling tensions in the region. Meanwhile, monetary policy remained in focus following a hotter-than-expected read on January wholesale prices, while manufacturing activity in the New York region rose back into expansion territory after dropping into contraction territory last month. In earnings news, Marriott solidly beat estimates citing a slow recovery in leisure travel, but noted overall travel remains below pre-pandemic levels. On the M&A front, Dow member Intel announced a deal to purchase Israeli chipmaker Tower Semiconductors. Treasuries were mixed and the U.S. dollar lost ground, while crude oil prices retreated from a recent run, and gold also declined. Europe finished with widespread gains amid the Russia-Ukraine news, while markets in Asia were mixed.
The Dow Jones Industrial Average rose 423 points (1.2%) to 34,989, the S&P 500 Index increased 69 points (1.6%) to 4,471, and the Nasdaq Composite rallied 349 points (2.5%) to 14,140. In heavy volume, 4.3 billion shares of NYSE-listed stocks were traded, and 4.3 billion shares changed hands on the Nasdaq. WTI crude oil fell $3.39 to $92.07 per barrel. Elsewhere, the gold spot price traded $15.80 lower to $1,853.60 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.3% at 96.00.
The Producer Price Index (PPI) showed prices at the wholesale level in January rose 1.0% month-over-month (m/m), above the Bloomberg consensus estimate of a 0.5% gain, and north of December’s unrevised 0.2% increase. The core rate, which excludes food and energy, gained 0.8% m/m, above estimates of a 0.5% rise and above the prior month’s unadjusted 0.5% increase. Y/Y, the headline rate was 9.7% higher, matching the prior month, but above projections calling for a 9.1% gain. The core PPI increased 8.3% y/y last month, above estimates of a 7.9% gain and matching December’s increase.
The Empire Manufacturing Index, a measure of activity in the New York region, showed the index moved back to a reading depicting expansion (a reading above zero) after surprisingly falling below the demarcation point last month. The index increased to 3.1 in February from -0.7 that was posted in January and compared to the Bloomberg estimate of an increase to 12.0. The rise came as new orders and employment both increased, with the former moving back above zero, while the expansion in inventories accelerated, and prices paid dipped slightly but continued to be elevated.
Treasuries were mixed, as the yield on the 2-year note was 2 basis points (bps) lower to 1.57%, while the yields on the 10-year note and the 30-year bond increased 5 bps to 2.05% and 2.35%, respectively.
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