Daily Insight: Dollar, EU Second Thoughts, Mortgage Apps, PPI

U.S. stocks gained ground for a third-straight session, and the only two down days of the past 15 sessions were nothing more than fractional declines, on the heels of Tuesday’s Fed statement – yesterday’s reported decline in producer prices for February only reinforced the fact that the Fed won’t feel pressure on the inflation front to remove their unprecedented level of accommodation anytime soon. (Not that the Fed would be focused on inflation if it were a threat, not with 10% unemployment, banks that need a super-steep yield curve and a housing market that remains beaten down…but this is for another discussion I guess.)

The broad market did give back about a third of its earlier gains late in the session, but held on to record solid performance.

Energy shares led the advance (first time for that in a while) along with financials and materials. All 10 major sectors gained ground on the session, but there were clear laggards as utilities and health-care shares were the deepest under-performers.

The Dow Industrial Average followed the S&P 500 in making a new 17-month high, surpassing what had been the recent high of 10,725 hit on January 19. Shares of Exxon, Chevron and Caterpillar led the Dow higher – energy stocks had conspicuously lagged the broad market over the past couple of months, but with crude now testing $83/barrel, they’ve found a bid.
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Brent Vondera, Senior Analyst