Markets Pare Recent Spate of Losses…..
U.S. equities finished with gains and near the highs of the day, as investors sifted through the first look at February’s inflation picture. The Consumer Price Index (CPI) rose in line with estimates month-over-month, while the core rate—excluding food and energy—increased a little more than expected. On a year-over-year basis, both the headline and core rate declined, but remained elevated. In other economic news, small business optimism increased last month. The banking sector remained in the headlines, with many banks climbing higher following sharp losses over the past few trading sessions. In other equity news, United Airlines forecasted an adjusted Q1 loss, and Meta Platforms announced another round of layoffs that will begin tomorrow. Treasury yields rebounded, especially at the shorter end of the curve, and the U.S. dollar was nearly unchanged, while crude oil prices tumbled, and gold traded lower. Asian stocks fell as turmoil in the U.S. banking sector spilled over into the region, while European stocks climbed as investors digested the inflation data out of the U.S.
The Dow Jones Industrial Average increased 336 points (1.1%) to 32,155, the S&P 500 Index was up 65 points (1.7%) to 3,921, and the Nasdaq Composite rallied 239 points (2.1%) to 11,428. In moderately heavy volume, 5.6 billion shares of NYSE-listed stocks were traded, and 5.4 billion shares changed hands on the Nasdaq. WTI crude oil fell $3.47 to $71.33 per barrel. Elsewhere, the gold spot price declined $7.50 to $1,909.00 per ounce, and the Dollar Index was flat at 103.59.
CPI data mostly in line with estimates, small business optimism increased…..
The Consumer Price Index (CPI) rose 0.4% month-over-month (m/m) in February, matching the Bloomberg consensus estimate, and versus January’s unrevised 0.5% increase. The core rate, which strips out food and energy, went up 0.5% m/m, slightly higher than expected, and versus January’s unrevised 0.4% growth rate. Compared to last year, prices were 6.0% higher for the headline rate, matching forecasts, and versus the prior month’s unrevised 6.4% increase. The core rate was up 5.5% y/y, as expected, and slightly below January’s unadjusted 5.6% rise.
The National Federation of Independent Business (NFIB) Small Business Optimism Index for February increased to 90.9, and versus January’s 90.3 read. The index posted the fourteenth-consecutive month below the 48-year average of 98.0. According to the report, 28% of small business owners noted that inflation was their single most important problem in operating their business.
Treasury rates rebounded somewhat from a recent tumble, as the yield on the 2-year note jumped 20 basis points (bps) to 4.22%, the yield on the 10-year note gained 15 bps to 3.66%, and the 30-year bond rate increased 14 bps to 3.78%.
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