Daily Market Recap

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The Dow rose 1.08% to close above 14,000 for the first time since October 2007. The S&P 500 climbed by 1.01% to close over 1500. Strong economic data released prior to the open this morning fueled a rally that was broad based and gained momentum throughout the day.

National manufacturing surveys were stronger in January. The ISM manufacturing survey came in better than expected as the number for January rose 2.9 points to 53.1. The Markit PMI headline number was up 1.8 points for the month to 55.8. These were the strongest reported numbers since April of last year.

The continued housing recovery has pushed construction spending higher. Construction spending for December was up 0.9% and the October and November numbers were revised higher. Private spending on residential construction spending continues to rise.

The January employment report showed an increase of 157,000 jobs last month. There were significant upward revisions to the prior two months' numbers also.

Financials were particularly strong today. Strength in the sector was broad based. While the sector is off its recent highs after a huge run higher to end 2012 the pullback has been orderly. Today buyers aggressively came into the sector. Banks were leading the sector higher. Money center/capital markets names, like Bank of America and Morgan Stanley were particularly strong. Insurers also participated in the rally today.

Industrials were in line with the overall market. Multi line industrials were leaders. Names with broad based international exposure acted well today. Capital equipment related names led the machinery group in today’s trading.

The transport sector was in line with the market on the strength of the rails and airlines leading the way. Parcels were higher but lagged the overall group as UPS was only up modestly. Airlines traded higher as a group by better than 1%.

The materials sector was led by steels, precious metals and strength in chemicals. Base metals are in line with the tape and precious metals stocks slightly outperformed the broader market on strength in the underlying metals.

Source: PFS Group

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