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The market ended the first trading session of the new week in a mixed fashion. The Dow added 70 points after losing nearly 400 points last Friday and the Nasdaq, dragged by several big tech names, posted a loss of 0.6%. Interestingly, just when almost everyone was pessimistic on the outlook of housing, we got some good news on that troubled sector. The pending home sales for April rose 6.3% while economists were looking for a drop of 1.0%. Although one month data doesn’t constitute a trend, it nonetheless would give some hope to those looking for the bottom of the housing market. However, continuous weakness in the financial sector completely offset the good economic news and even a $4 drop in the crude price couldn’t help matters.
Commodities especially energies were among the biggest gainers of the session. Energy stocks simply treated today’s drop in crude price as a temporary event. The CRB commodity index gave back 1.4% following a huge run in the previous week. But the biggest news of the day was probably in the treasury market, which in the wake of possible sooner-than-expected rate hike, saw the yields on 2-year notes jump 34 bps, the most in 12 years. Across the Atlantic, UK 2-year notes also tumbled the most in 10 years as traders bet that BOE is going to raise interest rates sooner than originally expected. The US dollar moved higher against most major currencies. The VIX index retreated a little bit after topping 24 earlier. The market breath was negative on both the NYSE and the Nasdaq.
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