At the New York close on Friday, for the month of February: S&P 500 up 4.3% at 1859.45. DJIA up 4% at 16321.71. Nasdaq Comp up 5% at 4308.12. Treasury yields fell; 10-year at 2.660%. Nymex crude oil up 5.2% at $102.59. Gold up 6.6% at $1,321.40/ounce.
How We Got Here: February was the revenge of the dip-buyers. After a dank January, U.S. stocks surged in February, with the Dow putting its best performance (largest point and percentage gain) since January 2013. With the S&P 500 at a fresh record high, the bulls seem to have retaken the reins here (albeit, the index is up a scant 0.6% on the year).
But the last session was a wild one. The Dow rose early on Friday, despite a fourth-quarter GDP report that was marked lower. After setting a new record on the S&P 500, equities looked like they’d been flung by a slingshot.
“Reaching new S&P closing high removed a primary bear caution,” UBS’s Art Cashin wrote in a mid-afternoon note on Friday. “Today, there looks to be a modicum of short covering in a thin market. Little to no resistance.”
The momentum died in the afternoon, around the same time headlines hit that Russian troops had taken over two airports in Crimea. That ratcheted up the geopolitical pressure, and the Dow, which had been up 126, tumbled into the red before recovering to finish modestly higher.
Coming Up: Russia has taken control of the Crimean peninsula in Ukraine and appears to be preparing to occupy the territory, a senior Obama administration official saidSunday. Safe-haven currencies like the yen and the U.S. dollar are benefiting early in Asia as markets remain focused on events in Ukraine.
Investors will also be reacting Monday to China’s official February manufacturing data. Released over the weekend, it came in with a reading of 50.2. Economists polled by the Wall Street Journal on average expected a reading of 50.1, just above the line that separates expansion from contraction. A preliminary gauge released earlier this month by HSBC indicated activity had dropped to a seven-month low, catching investors off guard and adding to China growth fears.
Source: WSJ
