Markets broke a very short losing streak.First, the scoreboard:
Dow: 12,837.3, +78.1, +0.6%
S&P 500: 1,352.6, +9.2, +0.6%
NASDAQ: 2,935.6, +25.3, +0.8%
And now, the top stories:
- Germany gave everyone a scare after reporting that factory orders unexpectedly plunged 2.7 per cent. Economists were looking for a more modest 0.6 per cent decline. That’s a scary 4.9 per cent decline on an annualized basis. Nevertheless, European markets rallied today.
- The more encouraging news that came out of Europe was a report that Greece had 76.6 per cent participation of debt holders in the Greek bond swap deal. This clears the 75 per cent hurdle needed to trigger a collective action clause, which effective forces any dissenters to take the deal. The euro surged higher against the dollar on the news.
- Shortly after the Greek development, a report broke that the Fed would consider a “sterilized” bond buying program. The story was broke by the Wall Street Journal’s Jon Hilsenrath who wrote “The aim of such an approach would be to relieve anxieties that money printing could fuel inflation later, a fear widely expressed by critics of the Fed’s previous efforts to aid the recovery.” Stocks surged and the dollar fell on the news.
- This new reported plan actually sounds more like a sequel to Operation Twist rather than a third round of quantitative easing. This should make Vincent Reinhart, Morgan Stanley’s new Chief U.S. Economist, happy. In a note to clients this week, he wrote that some new form of easing from the Fed was likely. Reinhart wrote that he expected some new form of QE, but he also wrote that he preferred an extension to Operation Twist.
- Let’s not forget that it’s still jobs week in America. According ADP, private companies added 216k jobs in February, which almost couldn’t have been closer to the 215k estimated by analysts. It’s worth noting that financial and construction jobs have improved significantly. Also, according to a new Duke University survey, CFOs expect a 2.1 per cent increase in hiring within the next twelve months.
- Refiners were big winners in today’s stock market rally, with Valero and Tesoro among the top stocks in the S&P 500. Business Insider’s Mamta Badkar spoke to commodities guru Jim Rogers who warned about elevated energy prices. Rogers believes the U.S. government is lying about inflation and the U.S. is long overdue for a recession.
- In a positive sign for consumer confidence and spending, the Fed reported that January consumer credit outstanding surged by $17.7 billion in January, which was well ahead of the $10.45 billion projected by economists. However, this increase was largely driven growth in student loan debt.
- Also, today was Apple’s big product launch announcement. Among other things, we heard about the new iPad 3 and Apple TV.
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