Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Thursday, 03/14” will be posted around 8:30am EDT, Thursday.
THE GIST (“THE WHAT”)
Latest signs of subdued inflation boosted the S&P 500 index higher for the third straight session. Breaching the psychologically important 2800 level after several failed attempts to regain this closely watched resistance level over the last five months, the index closed at a four-month high at 2810.92, up 19.40 points and gaining 0.69% over previous session’s close. All of the eleven primary sectors traded higher for the day.
THE DETAILS (The “How & Why”):
On economic data front, the Producer Price Index rose at a below-than-expected rate of 0.1% in February. Meanwhile, the orders for durable goods rose 0.4% and core capital goods orders, a key metric to measure business investment rose 0.8% in January, indicating a steadily expanding economy. The U.S. construction spending in January also rose 1.3%, rebounding from a 0.8% decline in December.
Health Care and Energy led today’s broad-based rally closing higher by 1.10% and 1.09%. DaVita Inc. and Nektar Therapeutics were the strongest performers within the Health Care space, each gaining more than 4%. CVS Health Corp. jumped 3.51% following bullish comments by Bernstein. A surprise drop in U.S. crude stockpiles and a larger-than-expected decline in gasoline inventories boosted oil prices to settle at a four-month high, lifting Energy stocks.
Boeing Inc. rebounded from the previous session’s slump at the open but was pulled back sharply mid-session after President Trump announced that the U.S. will join other countries in grounding the 737 Max planes in the wake of two fatal crashes in five months involving these jets. The aircraft maker, however, recouped losses in the last hour of session, closing with a 0.46% gain, ending a seven-day losing streak.
Airline stocks fell sharply alongside a brief plunge in Boeing Inc. but recovered by the end of the session to lift the Industrials space higher. Alaska Air Group Inc. and American Airlines Group Inc. were the top gainers within the Industrials sector, gaining 3.59% and 2.98%, respectively.
Financials, Consumer Staples and Technology sectors were the other notable gainers in today’s broad-based rally, up 0.73%, 0.70% and 0.69%, respectively. Take-Two Interactive led the tech space higher, climbing 6.88% on reports that Sony Corp. plans to acquire the video game giant in an all-cash deal. FAANG stocks also traded higher for the day on bullish outlooks provided by several analysts.