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A batch of better-than-expected economic data induced broad-based buying for the first part of the session, but the upbeat tone fell apart as stocks pushed through intraday support levels and a Treasury auction produced disappointing results. However, an underlying bid emerged late in the session, setting off a rally in the last few minutes of trading.
The latest durable goods orders data and new home sales figures both turned out to be better than expected.
February durable goods orders increased 3.4%, marking the first time in six months that orders increased. Excluding transportation, orders increased 3.9%. Economists expected respective declines of 2.5% and 2.0%.
February new home sales increased 4.7% month-over-month to an annualized rate of 337,000. Economists predicted a 2.9% decline.
The afternoon's selling effort gained momentum after the S&P 500 failed to find support at the 818 level, which had provided intraday support in the early going. Selling intensified after weak demand for a government auction of 5-year Treasuries led to a jump in yields. The disappointing auction followed an auction of Gilts, or British debt securities, by the United Kingdom that failed to attract enough buyers.
The weak auctions suggest investor appetite for government debt carrying low interest rates is waning, which will bring future auctions into closer focus. As such, tomorrow's auction of 7-year notes now has a much higher level of importance.
Sellers took the stock market to a loss of 1.8%, but a late, broad-based rally effort helped stocks close the session with a solid gain.
source from yahoo and google
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