Stocks Rebound As Industrial Production Rises

Economists were expecting the Federal Reserve to report that industrial production increased by 0.2 percent in March. Investors were excited to see that industrial production actually increased by 0.4 percent. The reports on March housing starts and the Consumer Price Index were also better than expected. The Dow Jones Industrial Average (DIA) regained 157 points to reach 14,756 for a 1.08 percent advance. The S&P 500 (SPY) rebounded by 1.43 percent to close at 1,574.

The Nasdaq 100 (QQQ) climbed 1.46 percent to 2,838. The Russell 2000 (IWM) regained almost half of Monday’s loss, rising 1.65 percent to end the day at 922.

In other major markets, oil (USO) climbed 0.83 percent to close at $31.75.

On London’s ICE Futures Europe Exchange, June futures for Brent crude oil declined by 68 cents (0.68 percent) to $99.95/bbl. (BNO), (USO).

June gold futures advanced by $8.00 (0.59 percent) to $1,369.10 per ounce (GLD).

Transports broke the sound barrier on Tuesday, with the Dow Jones Transportation Index (IYT) jumping 2.35 percent.

The major European stock indices continued their decline on Tuesday after a downbeat report on German business sentiment. The Euro STOXX 50 Index finished Tuesday’s trading session with a 0.59 percent drop to 2,609 – remaining below its 50-day moving average of 2,650. Japan’s Nikkei 225 Stock Average declined 0.41 percent to 13,221 as the yen resumed its downward trajectory (EWJ).

In China, the Shanghai Composite Index advanced 0.59 percent to 2,194 (FXI) although Hong Kong’s Hang Seng Index declined by another 0.46 percent to 21,672 (EWH).

Technical indicators reveal that the S&P 500 bounced further above its 50-day moving average, with the Relative Strength Index rebounding to 55.46. Its MACD has not yet returned back above the signal line, which could suggest another decline.

For the day, all sectors finished solidly in positive territory. The consumer staples and materials sectors led the group – all of which had risen in excess of one percent.

Consumer Discretionary (XLY): +1.43%

Technology: (XLK): +1.24%

Industrials (XLI): +1.36%

Materials: (XLB): +1.82%

Energy (XLE): +1.23%

Financials: (XLF): +1.60%

Utilities (XLU): +1.21%

Health Care: (XLV): +1.44%

Consumer Staples (XLP): +1.87%

Bottom line: Investors were both relieved and encouraged by Tuesday’s upbeat economic reports, especially since industrial production rose by twice as much as expected.

Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer, Terms of Service, and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.