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The Bulls Gain Some Ground, but Biotech Remains a Sore Spot


Today's financial recap and tomorrow's financial outlook.

Stocks regained some footing today following Monday's route, with the S&P 500 (INDEXSP:.INX) finishing up 8 points at 1865.62.

However, volatility in key speculative sectors soured the mood a bit.

Traders remain intensely focused on the biotech sector, namely the iShares Nasdaq Biotechnology Index ETF (NASDAQ:IBB), which had been up more than 20% in 2014 by late February before its precipitous decline. IBB rose as much as 2.7% in early trading, but was only up 0.1% at the close.

The bright spot today was once again emerging markets, with notable strength in China and Brazil; there seems to be some rotation from high-beta US stocks into these beaten-down regions, which has done a good job of shaking off bad news.

Additionally, the other major ETF, SPDR S&P Biotech (NYSEARCA:XBI), which has a heavier weighting in higher-risk small-cap names, was actually down 0.5%. Social media stocks were also weak, as were financials and small caps.

Housing stocks were another sore spot, with iShares Dow Jones US Home Construction ETF (NYSEARCA:ITB) underperforming the market by a decent margin.

In related economic news, the S&P/Case-Shiller January home price report was slightly better than expected. Prices rose 0.85% month-over-month, beating expectations for a 0.6% increase. However, February new home sales were just slightly light at 440,000.

Elsewhere on the economic front, the March consumer confidence index came in at 82.3, nicely ahead of the 78.5 consensus, while the March Richmond Fed Manufacturing Index was -7 vs. expectations for a +4 reading.

In earnings news, Walgreen (NYSE:WAG) rallied 3.3% after an in-line earnings report as investors were encouraged by synergies in its Alliance Boots business, as well as plans to close 76 unprofitable stores.

Tomorrow's Financial Outlook

Wednesday's earnings calendar is fairly light. The only sizable companies reporting are H.B. Fuller (NYSE:FUL) and Paychex (NASDAQ:PAYX), though neither is likely to move the market.

However, we could see some fireworks from the February Durable Goods report at 8:30 a.m. ET. It's one of the more volatile and unpredictable data sets, but it does tend to move markets.

Additionally, the MBA Mortgage Index for last week will be reported at 7:00 a.m.

And finally, crude oil inventory numbers will arrive at 10:30 a.m.

Twitter: @Minyanville

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No positions in stocks mentioned.

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