U.S. stocks gained ground for a second-straight session as better-than-expected economic data juiced investor sentiment. However, while the broad market held just about all of its early-session gains, the Dow retreated a bit from the session high and the 11K mark remained elusive for at least another day.
Energy shares led the broad-market’s advance as the price of crude jumped well into the $86/barrel handle – here we go again. Basic material stocks were the next-best performing group as the commodity play rolled. Consumer discretionary shares rounded out the top performers – this one really has me confounded; how can the market completely ignore the headwinds higher energy prices have on an already burdened consumer.
We’ll see how stocks react to possibly rising interest rates, at least over the near term. Treasury yields advanced yesterday, moving closer to that 4.00% level on the 10-year – a closely watched level. I’m not sure a continued sell off on the long-end of the curve (prices go down yields go up) will act as a wall, halting the run in stocks, but with roughly $80 billion in government debt issuance this week things may just get interesting on the interest-rate front.http://www.acrinv.com/20100406255/blog/daily-insight-ism-service-and-pending-home-sales
Brent Vondera, Senior Analyst
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