Thursday, April 9, 2009

Market Reflections 4/8/2009

A report that the Treasury will extend TARP funds to insurers gave a boost to Wednesday's session. The S&P 500 rose 1.2% to end at 825.01. A move to protect insurers would be aimed at bolstering confidence in the sector and limiting customer redemptions. Insurers posting gains included Lincoln National (LNC) +35 percent, Principal Financial (PFG) +21 percent and Hartford Financial Services (HIG) +13 percent.

Also helping the market was surprisingly solid earnings from home furnishings retailer Bed Bath & Beyond (BBBY), whose shares rose more than 20 percent. Stocks were initially set to move lower in reaction to weak earnings late yesterday from aluminum giant Alcoa. Brokers are warning that stocks over the next week are likely to swing in wide moves in reaction to single earnings announcements. Earnings don't get underway in force until mid-month with Thomson Reuters pegging S&P 500 earnings at -38 percent.

FOMC minutes held attention late in the session but offered no surprises, showing that policy makers are committed to injecting huge amounts of liquidity into the banking system. Economic data included an upbeat wholesale trade report that shows inventories are coming back in line with sales, a plus for future output and future employment.

Oil data showed another build in crude inventories and also a build in gasoline. But the builds weren't enough to shake oil's lockstep with the stock market. May WTI gained nearly $1 to end just below $50.

Treasuries firmed helped by strong demand for $35 billion of new 3-year notes. The 3-year yield ended 1 basis point lower on the day at 1.29 percent. Gold slipped $5 to $880. The dollar was little changed at $1.3246 against the euro.

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