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The Markets Now: Stocks Remain Elevated After Factory Orders Report


Plus, health insurers jump on smaller anticipated cuts to Medicare Advantage plans.

Stocks have remained higher after the US Department of Commerce announced an increase in new factory orders in February.
The Dow (INDEXDJX:.DJI) increased 0.64% to 14,666.55. The S&P 500 (INDEXSP:.INX) climbed 0.65% to 1,572.30, and the Nasdaq (INDEXNASDAQ:.IXIC) rose 0.82% to 3,265.63. In international news, Cyprus awaits approval from European Parliaments and eurozone finance ministers for its 12-year, 10 billion euro loan with a 2.5% rate.

The US Department of Commerce reported today in its "Full Report on Manufacturers' Shipments, Inventories, and Orders" that new orders, shipments, and unfilled orders all increased. New orders for manufactured goods increased $14.5 billion, or 3%, to $492 billion from January to February, following a 1% January decrease. Transportation equipment helped boost orders, growing $13.3 billion, or 21.8% to $74.5 billion. Excluding transportation orders, new orders grew 0.3% month-over-month in February. New orders for manufactured durable goods increased $12.3 billion, or 5.6%, to $232.2 billion, and new orders for manufactured nondurable goods increased $2.2 billion, or 0.8% to $259.8 billion.

Shipments of manufactured durable goods increased $2.2 billion, or 1% to $229.5 billion from January to February. Shipments of transportation equipment again saw the largest gain, increasing $1 billion, or 1.6%, to $66.1 billion. Shipments of manufactured nondurable goods climbed $2.2 billion, or 0.8%, to $259.8 billion.

Last month, unfilled orders for manufactured nondurable goods increased $9.3 billion, or 0.9%, to $999.7 billion. Unfilled orders of transportation equipment topped the list with an increased of $8.4 billion, or 1.4%.

Inventories of manufactured goods grew $1.8 billion, or 0.5%, to $377.2 billion. Conversely, inventories of manufactured nondurable goods decreased $0.7 billion, or 0.3% to $242.8 billion after increasing 1% in January.

The International Council of Shopping Centers, or ICSC, reported today that its ICSCS-Goldman same-store sales index spiked 4.7% week-over-week for the week ending March 30. Year-over-year, the index increased 1.9%. Cold weather hurt sales of spring apparel. The index measures comparable store sales at major retail chains, accounting for 10% of total retail sales.

Johnson Redbook reported today that its retail sales index saw a year-over-year 3.5% gain. Redbook also stated that cold weather hurt sales of spring apparel, however its stores saw strong sales of children's spring apparel. Its month-over-month indicator climbed 0.8%. Week-over-week same store sales increased 0.9%.

Redbook's retail sales index measures sales at approximately 9,000 chain stores, discounters, and department stores, or 10% of total retail sales. The index represents by dollar amount over 80% of the equivalent retail sales series gathered and published by US Department of Commerce.

The US Treasury today auctioned $45 billion worth of 4-week Treasury bills with a rate of 0.070% and with a bid-to-cover ratio of 4.26. It auctioned $25 billion worth of 52-week Treasury bills with a rate of 0.140% and a bid-to-cover ratio of 4.89.

Apple (NASDAQ:AAPL) increased 1.95% to $437.28. Goldman Sachs analyst Bill Shope today removed Apple from its "Conviction Buy" list, giving it just a "Buy" rating. Shope also slashed his price target from $660 to $575.

Hewlett-Packard (NYSE:HPQ) plunged 5.98% to $21.92. The same Goldman analyst (Shope) downgraded Hewlett-Packard from "Neutral" to "Sell," citing restructuring challenges, severe challenges in the core hardware segment, and the drag of Enterprise Services on profits. Shope has a $16 price target.

Occidental Petroleum (NYSE:OXY) jumped 2.65% to $81.04. Occidental Chairman and former CEO Ray Irani wants to oust current CEO Stephen Chazen. Likewise, supporters of Chazen want to remove directors, such as Irani, from the board of the fourth largest US oil company. Occidental's annual meeting will be held on May 3.

UnitedHealth Group (NYSE:UNH) climbed 5.65% to $62.30. The federal government released final Medicare Advantage rate data for next year. The funding cuts for Medicare will be less severe than initially anticipated. The Centers for Medicare and Medicaid Services stated the amount it would pay per person in 2014 for Medicare Advantage plans would fall by 2% in 2014. Other analysts expect an 8% cut though. (See also: Chart of the Day: Expect UnitedHealth Stock to Hit All-Time Highs.)

Aetna (NYSE:AET) rose 5.31% to $55.16.

Twitter: @ChrisWitrak
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The author has a position in Occidental Petroleum Corporation.
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