Thursday, March 5, 2009

Market Reflections 3/4/2009

It was news of Chinese stimulus that drove the U.S. markets on Wednesday. Many here have been complaining that Chinese efforts to fire up their economy have been half hearted, at least until now. The Chinese government announced a nearly $600 billion two-year investment plan aimed at infrastructure.

Stocks posted their first gain in five sessions with the the S&P 500 gaining a solid 2.4 percent to 712.86. Money moved out of safety, making for a nearly 1 cent decline in the dollar to $1.2645 against the euro. Money moved out of Treasuries where the 2-year yield rose 6 basis points to end at 0.95 percent.

Oil got a boost from the Chinese stimulus plan, ending nearly $4 higher at $45.19 for April WTI. Gold edged lower to $907.

The news from China far overshadowed economic news here that included a rock-bottom reading for mortgage purchase applications, an ADP call for a staggering 697,000 loss in Friday's payrolls, and a step backwards for the ISM non-manufacturing report. The calendar also included the Beige Book, which reports that the recession is deepening, and a series of comments from Federal Reserve officials warning of the same.

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