Market Wrap for Tuesday, April 2: Stocks Jump After Factory Data Beats Estimates
Stocks continued their climb into record-high territory on Tuesday as investors reacted favorably to a better than expected factory orders report.
Although official figures released on Tuesday morning showed that unemployment in the European Union is at a record high of 12 percent, risk appetite around the world remains brisk with the S&P 500 already adding more than 10 percent on the year.
The Dow Jones Industrial Average rose 89 points, or 0.61 percent, to 14,662.
The S&P 500 jumped 8 points, or 0.52 percent, to close at 1,570.
The Nasdaq added a little less than 16 points, or 0.48 percent, to 3,255.
Manufacturing orders climbed 3 percent in February after falling 1 percent in January. This was ahead of consensus expectations of a rise in manufacturing orders of 2.6 percent for the month. The strength of the report was primarily due to a sharp rise in transportation orders.
Crude oil was slightly lower on Tuesday. Near the close of equities, NYMEX crude futures had lost 0.15 percent to $96.98 while Brent futures were trading down 0.63 percent to $110.45. Natural gas was last lower by around 1 percent on the session at $3.97.
Precious metals traded lower on the day despite a rally in stocks. At last check, COMEX gold futures had shed 1.56 percent to $1,576.10. Silver futures lost better than 2.50 percent to $27.26. COMEX Copper futures were essentially unchanged Tuesday.
In the agricultural complex, corn futures were slightly lower Tuesday, falling 0.27 percent while wheat recorded a better than 1.30 percent gain. Movers in soft commodities included coffee, which lost 1.63 percent and orange juice futures which were last up better than 4 percent.
Bond prices fell on Tuesday as investors moved money into stocks. Near the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) was down around 0.43 percent to $117.88. The fall in prices drove yields higher on the session.
The 2-Year Note yield remained flat at 0.24 percent, but the yield on the 5-Year Note rose two basis points to 0.77 percent. Yields on the 10-Year Note and 30-Year Bond were up three basis points apiece to 1.86 percent and 3.10 percent, respectively.
The U.S. dollar rose slightly on Tuesday along with the stock market. Near the close of equity trading, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 0.27 percent to $22.58.
The closely watched EUR/USD pair lost 0.23 percent to $1.2815. The only other significant currency mover on the day was the GBP/USD, which fell 0.77 percent.
Volatility and Volume
The VIX fell on Tuesday as the stock market continued to climb. The widely watched barometer of market fear fell almost 4 percent to 13.05.
Volume was lighter than normal on the session. Around 93 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of around 124.6 million.
Hertz Global Holdings (NYSE: HTZ) was trading up around 7 percent near the close. The company held an investor meeting on Tuesday morning.
Shares of Vanguard Health Systems (NYSE: VHS) were up around 5 percent after the company's Phoenix health plan subsidiary accepted a capped contract in Maricopa county.
Shares of private equity firm Apollo Global Management (NYSE: APO) were up better than 5 percent on Tuesday near the closing bell. The reason for the rise in the stock was not readily apparent.
Shares of biotech firm MannKind (NASDAQ: MNKD) jumped around 7 percent on the session. The activity in the name comes as the stock has broken out to a new 52-week high. Last week, analysts at Bank of America raised their price target on the shares.
DaVita HealthCare Partners (NYSE: DVA) was last up around 6 percent near the close of equity trading after Medicare said that it does not expect to cut payments for the popular Medicare Advantage program in 2014.
Exchange operator Nasdaq OMX Group (NASDAQ: NDAQ) fell around 13 percent after the company announced plans to acquire BGC Partners' eSpeed platform. In the wake of the announcement, Moody's said that it may downgrade the company's debt. Nasdaq OMX agreed to pay BGC $750 million in cash upfront and up to $484 million in stock for eSpeed, a Treasury trading service. BGC Partners (NASDAQ: BGCP) surged more than 46 percent in the wake of the announcement.
Eldorado Gold (NYSE: EGO) lost more than 9 percent on Tuesday, closing near a new 52-week low.
Alon USA Energy (NYSE: ALJ) lost around 6 percent on the day on heavier than usual volume. There was no significant news to account for the move in the stock.
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