Markets Hit New Record Though It Was A One-Sided Affair

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Stocks climbed throughout the session today to kick off the week with solid gains despite mixed economic data. The Standard & Poor’s 500 Index rose 11 points to 1,594 surpassed its previous record close set earlier this month.

Growth-oriented stocks, including energy and technology, lead the way to the index’s sixth rise in the past seven sessions. The Dow Jones Industrial Average gained 106 points (0.7%) to 14,819, and the Nasdaq Composite hit a new multiyear high on an intraday basis, ending with a gain of 0.9% to 3,307. Disappointing volume, however, once again revealed a lack of conviction behind the buying. 598 million shares were traded on the NYSE, and 1.5 billion shares changed hands on the Nasdaq.

Pending home sales rose 1.5% in March compared with February and were 7% higher compared with the same time last year, above the consensus forecast of 1.0%. Contract signing activity reached its highest level since April 2010, which was infused by the home-buyer tax credit. Personal income rose 0.2% in March, down from 1.1% in the previous month, and below the consensus of 0.4%. However, it was in line with the 12-month average, indicating stable growth.

Personal consumption expenditures rose 0.2%, above estimate of a flat reading. Personal saving rate was unchanged at 2.7%, near its lowest level since late 2007, and historically consistent with above-trend economic growth. Dallas manufacturing activity surprisingly fell into contraction territory.

Euro-zone was also in the headlines today as investors welcomed the formation of a new government in Italy under new Prime Minister Enrico Letta with hopes for new policies to promote growth in the euro zone’s third-largest economy. Italian stocks led the way as the European equity markets moved higher.

The European Central Bank is widely expected to announce an interest rate cut to a record low of 0.5 percent when it meets on Thursday.

At the same time, recent signs of weak U.S. growth have raised expectations the Fed will consider renewing its commitment of bond buying at $85 billion a month at its two-day policy meeting beginning tomorrow. A full day of economic news starts tomorrow with the first quarter employment cost index and the S&P/CaseShiller Home Price Index, which is followed by the release of April consumer confidence.

Our Trend Tracking Indexes (TTIs) headed higher as well with the Domestic TTI closing the day at +3.92%, while the International TTI rallied to +8.07%.

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