Tuesday’s Market Recap: Housing Report Propels Stock Rally

An up day for the markets led by a tech rally, the Dow Jones Industrial Average [^DJI]] was up 2.48% to close at 7395.70 while the S&P (^GSPC) closed up 3.21% at 778.12. The tech heavy NASDAQ (^IXIC) benefited handsomely as its components rose for it to close up a stellar 4.14%. The 10 year yield ended slightly above 3oo basis points as investors fled the save haven. Oil and gold settled the day down at $48.38 and $914.60 respectively.

Alcoa (AA) announced a cut in their dividend as they prepare to report a Q1 2009 loss due to depressed aluminum prices. This was to be expected as it helps the company save over $2.4B to shore up their finances after laying off a substantial portion of their workforce. Alcoa, generally the first to report earnings is already showing signs of continued weakness in corporate earnings.

Aiding a sustained rally, the February housing starts data sent consumer discretionary names skyrocketing. The likes of Wal-Mart (WMT) and Home Depot (HD) were up big, but many question this as a potential end to a reeling real estate market. I think not, there is still quite a lot of action to come as commercial real estate should see a little more stress before anything positive happens.

Technology rallied lead by Google (GOOG), Cisco (CSCO), and Research In Motion (RIMM) aided by Apple (AAPL) announcing at MacWorld that it is releasing the 3rd version of its iPhone software. Technology, usually a bellwether through recessions has been hit quite hard thus far, but could this be a rebound? We will just have to wait and see as these companies mobilize and expand their offerings to combat any potential weakness from their clients.

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