Ticonderoga Securities Strategy and Economics / Afternoon Radar Screen

Ticonderoga Securities Strategy and Economics / Afternoon Radar Screen

Recent Rally Stalls on Manufacturing Data, Only to Be Countered by Good News at Day’s End

Stocks stateside fluctuated today to move higher on the close on news that BP PLC (NYSE: BP) had successfully capped its famously damaged well in the Gulf of Mexico, expectations that the bank reform bill would be passed by the Senate, and news on the tape of a “significant announcement” to be made after the close by the SEC. (NOTE - NYT claims Goldman Sachs (NYSE: GS) will be fined $550 million)

This morning, stocks had moved higher earlier in the day on the labor department's report of a greater than expected decline in initial unemployment claims as well as on evidence that at least one major bank had seen an improvement and a lessening of the need to raise loan loss provisions.

All too soon after the opening, however, investors turned to consider the next wave of economic data that showed declines in producer prices and manufacturing growth that took investor sentiment from positive to wary and even negative faster than you could blink.

Throughout the day and into the late afternoon, the major U.S. equity indexes showed modest losses on the day as investors moved to the sidelines to argue and ponder the longer term implications of today’s numbers.

As the trading session came to a close this afternoon, with investor sentiment having turned on a dime with the news items mentioned at the opening of this piece, seven of the 10 GICs or economic sectors of the S&P 500 were positive. Defensive issues relatively outperformed cyclicals even as the market pared earlier losses.

Bonds: U.S. Treasury prices rallied further as risk aversion and growth concerns increased. The 10-year maturity’s yield slipped once again below 3% to 2.98%—some 13bps lower from a point in yesterday’s session.

Commodities: Gold and copper prices showed modest gains this afternoon as the euro strengthened, rising above $1.29 as the dollar slipped. Oil prices fell on growth concerns.