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S&P 500 Breaks Above 2800; President Trump Grounds Boeing's 737 Max Aircraft
13-Mar-19 16:25 ET
Dow +148.23 at 25702.89, Nasdaq +52.37 at 7643.40, S&P +19.40 at 2810.92

https://www.briefing.com/investor/markets/stock-market-update/2019/3/13/s-and-p-500-breaks-above-2800-president-trump-grounds-boeings-737-max-aircraft.htm

[BRIEFING.COM] The S&P 500 gained 0.7% on Wednesday, although it lost some steam following President Trump's executive order to ground Boeing's (BA 377.14, +1.73, +0.5%) 737 Max aircraft. Still, a break above the 2800 level for the S&P 500, along with a weakening dollar, helped the market steer past public scrutiny of Boeing.

The Dow Jones Industrial Average gained 0.6%, the Nasdaq Composite gained 0.7%, and the Russell 2000 gained 0.4%.

All 11 S&P 500 sectors finished higher with gains ranging from 0.2% (utilities) to 1.1% (health care).

President Trump's executive order came after Canada decided to close its airspace to the 737 MAX earlier in the day. Canada's decision wiped out an early 1.7% gain in shares of Boeing, while President Trump's decision sent BA down as much as 4.4%. Boeing, however, ultimately rebounded and ended the day higher by 0.5%.

Despite the negative publicity surrounding Boeing, the ability for the S&P 500 to break above the 2800 level to begin the day encouraged follow-through buying interest. The benchmark index took out its November high (2815.15) intraday but finished just below that level.

A notable move lower in the U.S. Dollar Index (96.52, -0.42, -0.4%) was another area of support for the broader market. Investors seemed to like the idea that a weakening dollar, should it persist, could provide some earnings-based relief for multinational companies. Gains in the yen, euro, and British pound against the dollar contributed to its weakness.

The British pound climbed even higher against the dollar after the UK Parliament voted to reject a no-deal Brexit. Parliament will debate an extension request on Thursday. Market reaction to Wednesday's vote was muted.

The U.S. Treasury market was also quiet on Wednesday. The 2-yr yield and the 10-yr yield finished unchanged at 2.44% and 2.61%, respectively. WTI crude rose 2.3% to $58.27/bbl following some bullish inventory data out of the Energy Information Administration.

Reviewing Wednesday's economic data, which included the Producer Price Index for February, Durable Orders for January, Construction Spending for January, and the weekly MBA Mortgage Applications Index:

The Producer Price Index for February was nearly irrelevant given the soft Consumer Price Index for February seen yesterday. Be that as it may, it is worth noting that the index for final demand increased 0.1% (Briefing.com consensus +0.2%) while the index for final demand, excluding food and energy, also increased 0.1% (Briefing.com consensus +0.2%).
The key takeaway from the report is that year-over-year inflation trends tipped lower for the index for final demand (1.9% versus 2.0% for the months ending in January) and the index for final demand, excluding food and energy (2.5% versus 2.6% for the 12 months ending in January). That tipping action will keep the Fed tipped toward a patient mindset.
The Durable Goods Orders report for January showed a 0.4% increase in new orders (Briefing.com consensus -0.6%) and a 0.1% decline, excluding transportation (Briefing.com consensus +0.1%).
The key takeaway from the report is that it was constructive for the business investment outlook and Q1 GDP forecasts, evidenced by the 0.8% increase in orders for nondefense capital goods, excluding aircraft, and the 0.8% increase in shipments for that same metric.
Total construction spending declined 0.6% in December (Briefing.com consensus -0.3%) after increasing 0.8% in November.
The key takeaway from the report is that total construction spending growth, marred by a 5.7% year-over-year decline in residential spending, is weak at 0.3% year-over-year.
The weekly MBA Mortgage Applications Index increased 2.3% after declining 2.5% in the prior week.

Looking ahead, investors will receive New Home Sales for January, Import and Export Prices for February, and the weekly Initial and Continuing Claims report on Thursday.

Russell 2000 +15.4% YTD
Nasdaq Composite +15.2% YTD
S&P 500 +12.1% YTD
Dow Jones Industrial Average +10.2% YTD