US markets attempted to sell off to start the day, but they made a strong comeback after the early weakness to see the S&P 500 (INDEXSP:.INX) close up 0.60%. Bank and telecom stocks led, while the rate-sensitive real-estate and utility sectors lagged. Investors bought bank stocks due to the sharp increase in short-term interest rates yesterday. Banks will be able to capture higher net interest margins as these rates rise because their funding rates will remain near zero for the rest of the year. The S&P Bank Index (INDEXSP:BKX) rose 2.51% today, making it the strongest sector. US Treasuries remained largely unchanged after a very heavily traded session.
Despite the Nasdaq's (INDEXNASDAQ:.IXIC) finish in the green, there were some clear negatives under the surface. The index itself finished well off its intraday high, while market leaders Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) were both down. Also, biotech, social media, and 3-D printing stocks looked ugly, underperforming the major averages by wide margins.
The March Philadelphia manufacturing index showed a surprise advance to 9.0 after -6.3 last month. The index's components showed strong growth in new orders, production, and positive movement in unfilled orders. February existing home sales declined to an annual rate of 4.6 million from 4.62 million in the month prior. This was in line with what economists had been expecting.
Tomorrow's Financial Outlook
There will be no major economic reports tomorrow morning in the US. However, four separate Fed governors will make speeches throughout the afternoon. After the market's reaction yesterday to Chair Janet Yellen's comment that the central bank would begin increasing rates six months following the completion of its asset purchase program, it is extremely likely that these speeches will be used to assuage investors' fears.
Two data reports are due out tomorrow from Canada: its retail sales and consumer price index. Consumer price growth is expected to slow in February to 1.0% from a year ago, down from 1.5% in January. The other data report of note is the March advance estimate of eurozone consumer confidence.
The only notable earnings reports scheduled for tomorrow morning are Darden Restaurants (NYSE:DRI) and Tiffany (NYSE:TIF).
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