Market Wrap for Tuesday, March 5: Stocks Rally as Dow Closes at New All-Time High
The U.S. stock market rallied on Tuesday, sending the Dow Jones Industrial Average out at a new all-time high. Sentiment benefited from a better than expected ISM Services Index reading and a slightly higher euro.
Both earnings and economic reports have showed that the economy is on decent footing and investors are speculating that the Federal Reserve will continue to back stimulative policies.
All three of the major averages rose on the day, led by the Nasdaq Composite which notched a gain of well over 1 percent.
The Dow Jones Industrial Average climbed 126 points, or 0.89 percent, to 14,254.
The S&P 500 added a little less than 15 points, or 0.96 percent, to 1,540.
The Nasdaq Composite registered a gain of more than 42 points, or 1.32 percent, to 3,224.
The February ISM non-manufacturing index rose from 55.2 in January to 56.0 in February. This was the highest reading for the index since February 2012. Consensus estimates had called for the index to rise to 55.4 in February.
Crude oil followed stocks higher on Tuesday. Late in the equity trading session, NYMEX crude futures, the U.S. benchmark, had risen a little less than a percent to $90.86. Brent crude contracts rose 1.44 percent to $111.66. Natural gas was lower on the session and was last down around 0.34 percent to $3.52.
Precious metals were slightly higher on the day. COMEX gold futures had climbed 0.20 percent to $1,575.70 at last check. Silver futures were last up around 0.65 percent to $28.68. Copper added 0.61 percent on the session.
Most of the grains were higher on Tuesday and corn and wheat added 0.82 percent and 0.50 percent, respectively. The only significant mover in the soft commodity complex was coffee, which lost almost 4 percent on the day.
The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) was trading down around 0.30 percent to $117.89 nearing the close of equity trading. The move lower in prices pushed Treasury yields higher.
The 2-Year Note was unchanged at 0.24 percent, but the 5-Year Note added one basis point to 0.77 percent. The 10-Year Note and 30-Year bond yields both rose two basis points to 1.89 percent and 3.10 percent, respectively.
The U.S. dollar was down slightly on Tuesday, which helped lift stocks. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.16 percent heading into the closing bell.
The closely watched EUR/USD pair was last trading up 0.14 percent to $1.3042. The USD/JPY, which has been rising sharply, fell 0.26 percent on Tuesday. The only other significant currency mover was the AUD/USD which climbed 0.48 percent.
Volatility and Volume
Volatility expectations continued to fall on Tuesday as the Dow Jones Industrial Average broke out to a new high. The VIX fell 4 percent to close at 13.45.
Volume was lighter than normal on the session. Around 100 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of 135 million.
Cree (NASDAQ: CREE) surged around 13 percent on Tuesday after the company launched a new LED light bulb and raised its fiscal third-quarter guidance.
Acura Pharmaceuticals (NASDAQ: ACUR) was up around 45 percent late in Tuesday's trading session after the company announced a pharmacy deal for its decongestant product Nexafed.
MGIC Investment (NYSE: MTG) jumped almost 26 percent on Tuesday after analysts at Barclays upgraded the stock to Strong Buy.
J.C. Penney (NYSE: JCP) fell around 10 percent after Real estate investment trust Vornado (NYSE: VNO) said that it had sold 10 million shares of its more than 18 million share stake in the struggling retailer.
Small-cap retailer American Apparel (NYSE: APP) jumped almost 19 percent after the company released bullish Q4 earnings results and upbeat guidance.
Impax Laboratories (NASDAQ: IPXL) plunged around 26 percent late Tuesday after the FDA completed a re-inspection of the company's Hayward, California-based manufacturing facility in connection with a Form 483 filed last year. The FDA issued a new Form 483 at the conclusion of the inspection with twelve observations.
Ascena Retail Group (NASDAQ: ASNA) jumped more than 14 percent after the company's Q2 financial results.
Santarus (NASDAQ: SNTS) surged around 11 percent on Tuesday after the company released bullish fourth-quarter earnings.
Apollo Group (NASDAQ: APOL) rose more than 3 percent after the stock was upgraded from Sell to Hold at Deutsche Bank.
Radian Group (NYSE: RDN) continued to rally on Tuesday after completing a public offering. The stock closed the session up more than 6 percent to $10.49.
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