Optimism on Russia/Ukraine Front Boosts Stocks…..
U.S. equities finished with broad-based gains, adding to a recent rally, as Russia-Ukraine negotiations today that were termed “constructive” resuscitated some hope for an eventual breakthrough. Meanwhile, the Fed’s expected monetary policy tightening aggressiveness remained in focus, as Treasuries were mixed after a recent noticeable increase in yields. The U.S. dollar gave back yesterday’s gains, while crude oil prices extended yesterday’s tumble, along with gold. M&A news dominated the equity front, with Nielsen agreeing to be acquired by a group of private equity firms for about $16.0 billion, and Dow member UnitedHealth Group announcing an agreement to acquire LHC Group for approximately $5.4 billion. Elsewhere, FedEx announced an upcoming shift in upper management. In economic news, home prices continued to climb, and consumer confidence increased, while job openings remained robust, posting a record gap between jobs available and unemployed workers. Overseas, the positive developments regarding the Russia/Ukraine talks appeared to boost European markets, while China was the lone country to post a loss in Asia.
The Dow Jones Industrial Average rose 338 points (1.0%) to 35,294, the S&P 500 Index gained 56 points (1.2%) to 4,632, and the Nasdaq Composite increased 265 points (1.8%) to 14,620. In moderate volume, 5.0 billion shares of NYSE-listed stocks were traded, and 5.9 billion shares changed hands on the Nasdaq. WTI crude oil lost $1.72 to $104.24 per barrel. Elsewhere, the gold spot price traded $19.90 lower to $1,919.90 per ounce, and the Dollar Index was down 0.7% at 98.41.
The 20-city composite S&P CoreLogic Case-Shiller Home Price Index showed a 19.10% year-over-year (y/y) gain in home prices in January, above the Bloomberg consensus estimate of an 18.60% rise. Compared to the prior month, home prices were up 1.79% on a seasonally adjusted basis, compared to forecasts of a 1.50% gain.
The Conference Board’s Consumer Confidence Index increased to 107.2 in March from February’s downwardly-revised 105.7 level, and versus the Bloomberg estimate calling for a reading of 107.0. The overall index was dragged by the Expectations Index of business conditions for the next six months portion of the index, which fell to 76.6 from February’s downwardly-revised 80.8 level, while the Present Situation Index portion of the survey improved to 153.0 from the previous month’s negatively-revised 143.0 level. On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—increased to 47.4 from the 41.5 level posted in February.
The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, showed a decrease to 11.26 million jobs available to be filled in February, from January’s upwardly-revised level of 11.28 million rate. The Bloomberg consensus estimate called for a 11.00 million level. The report showed the hiring rate increased to 4.4% compared to January’s 4.3% level, and separations increased to 4.1% from the prior month’s 4.0% pace. The quit rate ticked higher to 2.9% from January’s 2.8% pace.
Treasuries are mixed after a recent rise in yields amid increased expectations of a more aggressive Fed monetary policy tightening cycle as it tries to combat the surge in inflation.
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