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The market continued to move higher for the third day in a row with all three major indices gaining more than 1%. The trigger of today’s gain is the retail sales report for January. Both headline number and ex-auto number came better than expected after a decrease in sales in the previous month. Since recession is really the biggest concern among investors, today’s report at least provided some relief. Treasuries dropped while the yields moved higher following the news.
All 10 major sectors registered a gain for the day with tech and energy leading the way. Tech got a boost from Applied Materials, which reported a somewhat bullish new order forecast in its latest earning report. Energy, especially the oil service sector, was helped by the strong oil price after today’s oil inventory report showing less than expected built-up in crude inventory. US dollar gained against most major currencies while gold moved little. Platinum, the precious metal that is widely used in jewellery and automobile emission control, passed $2000 per ounce mark for the first time amid continuing mining disruptions in South Africa.
As for tomorrow, the Fed Chairman Bernanke is going to testify before Senate Committee and the market will pay close attention to what he may indicate about Fed’s next interest rate decision. Currently the market has priced in a 100% chance of 50bps cut and around a 20% chance of 75 bps cut at the March Fed meeting.
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