Stocks Close Sharply Higher Amid Pullback By The Dollar - U.S. Commentary

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Monday, largely offsetting the weakness that was seen last week. The gains on the day lifted the major averages well off the monthly lows set last Wednesday.

The major averages ended the day firmly in positive territory, near their highs for the session. The Dow jumped 228.11 points or 1.3 percent to 17,977.42, the Nasdaq surged up 57.75 points or 1.2 percent to 4,929.51 and the S&P 500 soared 27.79 points or 1.4 percent to 2,081.19.

The strength on Wall Street was partly due to a pullback by the value of the U.S. dollar, which gave back ground following recent strength.

The dollar showed a notable decline versus the euro and is valued at $1.0566 against the European currency after ending last week at $1.0496.

Last week, the dollar added 0.5 percent against the yen and surged up 3.2 percent versus the euro amid concerns about the outlook for interest rates.

Meanwhile, traders shrugged off a batch of disappointing economic data, including a report from the National Association of Home Builders showing that homebuilder confidence fell to its lowest level in eight months in March.

The report said the NAHB/Wells Fargo Housing Market Index fell to 53 in March from 55 in February. The drop surprised economists, who had expected the index to inch up to 56.

With the unexpected decrease, the housing market index fell to its lowest level since hitting a matching reading last July.

A separate report released by the Federal Reserve showed that industrial production grew by less than expected in the month of February.

The Fed said industrial production inched up by 0.1 percent in February following a revised 0.3 percent decrease in January.

Economists had expected production to rise by 0.3 percent compared to the 0.2 percent increase originally reported for the previous month.

The weaker than expected data may have helped ease concerns that the Fed will raise interest rates sooner than currently anticipated

Sector News

Biotechnology stocks saw substantial strength on the day, resulting in 2.4 percent jump by the NYSE Arca Biotechnology Index. With the gain, the index reached a new record closing high.

United Therapeutics (UTHR) and Amgen (AMGN) turned in two of the biotech sector's best performances, surging up by 8.1 percent and 5.7 percent, respectively.

Significant strength was also visible among trucking stocks, as reflected by the 2.2 percent gain posted by the Dow Jones Trucking Index. The gain lifted the index to its best closing level in well over two months.

Health care stocks also turned in a strong performance on the day, driving the Dow Jones Health Care Index up by 2.2 percent. The index also ended the session at a new record closing high.

Railroad, utilities, telecom and semiconductor stocks also saw notable strength, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index edged down by less than a tenth of a percent, while Hong Kong's Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has surged up by 1.8 percent, the French CAC 40 Index is up by 0.8 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent.

In the bond market, treasuries closed modestly higher but well off their best levels of the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.4 basis points to 2.098 percent.

Looking Ahead

A Commerce Department report on housing starts is likely to attract some attention on Tuesday, although traders may be looking ahead to the Fed's monetary policy announcement on Wednesday.