Thursday, May 14, 2009

Financials Lead A Rebound

Led by financials, stocks spent the majority of the session trading with impressive gains, but some late selling pressure challenged the broader market's advance and made for a choppy close... Stocks struggled to find direction in the first few minutes of trading as participants assessed the implications of rising jobless claims. According to the latest data, continuing claims climbed more than expected to a record high of 6.56 million. Weekly initial claims also topped expectations by totaling 637,000... With jobless claims mounting, many expect consumer spending to remain challenged. Such a notion was supported in the prior session when advance retail sales data for April showed an unexpected decline... Shares of retailers fought to hold on to gains this session. They finished 0.3% higher after being up more than 2%. Wal-Mart slipped after posting in-line earnings, which were also on par with what the company had already forecast... Financials provided leadership to the broader market, but only after recovering from a flurry of selling pressure in the early going. Financials were down 0.6% at their session low, but managed to close with a 4.0% gain... Multiline (+9.3%) insurers led gains in the financial sector as they recovered from rating concerns in the prior session. Meanwhile, Moody's has put Bank of America's financial strength on review for possible upgrade... Energy stocks also climbed back from an early loss. The sector had been down more than 1%, but closed with a 0.3% gain amid a rebound in crude oil prices. Crude oil prices were down in early pit trading after the IEA trimmed its demand forecast, but crude prices settled 1.0% higher at $58.62 per barrel... Of the 10 major sectors in the S&P 500, only the utilities sector closed lower; it shed 0.4% amid weakness in electric utilities stocks (-0.8%)... Without any major companies reporting earnings results tomorrow, participants will be taking their cues from economic data. Due tomorrow morning at 8:30 AM ET, April total CPI is expected to be flat, while Core CPI is expected to increase 0.1%. That ties in with the April PPI, which was released this morning. Total April PPI increased 0.3% month-over-month, while Core PPI increased 0.1% month-over-month... Separately, capacity utilization and industrial production for April are due tomorrow at 9:15 AM ET.

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