Posted by: : Paul Ebeling Posted on: March 12, 2015

Bond Rally Drives US Stock Market North

$XRT, $BAC. $DB, $SAN, $INTC, $SHAK, $ZOES

DJIA +0.4% YTD, NAS 100 +3.3% YTD, S&P 500 +0.3% YTD, Russell 2000 +2.6% YTD

DJIA  +259.83 at 17895.22, NAS 100  +43.35 at 4893.29, S&P 500  +25.71 at 2065.95

Volume: trade  was relatively light with fewer than 750-M/shares changing hands the NYSE .

The US major stock market averages saw a broad-based bounce Thursday after the S&P 500 (+1.3%) reclaimed its 50-Day MA at 2,060, and 100-Day MA at 2,044.

The stock indexes charged North at the open, and moved higher into final hr of action. The market ignored a disappointing retail sales report for February (-0.6%), the weak reading increased the likelihood that the Fed will delay its 1st interest rate hike into years end.

The Buck weakened. DXY finished at 99.26, -0.54, falling 0.5% to narrow its March gainer to 4.1%. The Index was down more than 1.0% this morning, but climbed off its session low that was notched after the release of the retail sales report.

Thursdays USD weakness was not enough to keep Crude Oil from ending the pit session lower by 2.3% at 47.11 bbl, the energy stock sector (-0.5%) was the only group that finished in the Red.

The remaining 9 stock sectors posted gains between 0.5% (technology) and 2.2% (financials).

The technology sector was the only advancer limited to a gainer than 1.0%, which was largely due to a 4.7% decline in the shares of Intel (NASDAQ :INTC) 30.80, -1.53 after the company cut its Q-1 revenue guidance due to weaker than expected demand for business desktop PCs. The stock widened its QTD loss to 15.1% and contributed to the under performance of the NAS 100 (+0.9%).

Among cyclical stock sectors, financials benefited from last evenings news that the US Federal Reserve approved capital plans of 28 out of 31 major banks.

Bank of America (NYSE :BAC ) 16.08, -0.02 was requested to make adjustments to its plan while Deutsche Bank (NYSE :DB) 31.70, +0.12, and Banco Santander (NYSE :SAN) 6.87, +0.10 had their plans rejected due to QE concerns. Thanks to Thursdays advance, the sector is now up 0.6% MTD while the remaining groups continue holding March losses.

Like the financial stock sector, the consumer discretionary sector (+2.0%) advanced 2.0% on broad strength.

Retailers rallied with the SPDR S&P Retail ETF (NYSEArca:XRT) 99.31, +1.70 spiking 1.7%, and restaurant names benefited from better than expected results from Shake Shack (NYSE :SHAK) 47.79, +0.89, and Zoes Kitchen (NYSE :ZOES) 34.94, +2.24.

US Treasuries registered gains, but ended well below their highs following an afternoon retreat. The 10-yr yield slipped 2 bpts to 2.10% after hitting a low near 2.04%.

Economic data

• US retail sales declined 0.6% in February after declining 0.8%, the consensus expected an increase of 0.4%
• The initial claims level declined to 289,000 for the week ending March 7 from an upwardly revised 325,000 (from 320,000) the consensus expected a decline to 306,000
• Export prices, excluding agriculture, increased 0.2% in February after decreasing 1.0% in the prior reading.
• Business Inventories were unchanged in January, the consensus expected an increase of 0.1%
• The Treasury Budget for February showed a deficit of $192.30-B, consensus expected a deficit of $192.00-B

Friday

February PPI (consensus 0.3%) will be released at 8:30a EDT, the preliminary reading of the Michigan Sentiment Index (MSI) (consensus 95.8) for March will cross the wire at 10:00 EDT.