Markets moved up today on good US economic reports. The Dow gained 348 points 16,865 on heavy volume.
Banking and heavy construction stocks led markets higher as a construction spending report showed a better than expected increase of 1.5% in January to the highest level since 2007. The ISM manufacturing index contracted in February however the new orders component and improving inventories component in the report pointed to signs of stability.
Car sales for February were reported today and the numbers defied expectations as everyone had been calling for a plateau following last year’s record results. Overall car sales in February were an estimated 10.8% higher than this time in 2015. GM said sales were up 6.6%, Ford experienced a 20.2% rise as SUV and truck sales shot higher. Toyota grew sales at 5.2% and Chrysler posted a 12% increase. Michelle Krebs, an analyst at Autodealer.com said the strong performance suggests US car buyers have been undeterred by signs of weakness in the US economy or by the Fed’s decision to raise rates last December. Shares of car companies and dealerships were higher on the news after having sold off hard since the first of the year.
Oil was mixed on the day and traded both sides of the fence before closing the day up 1.75% to $34.34 per barrel. One news item that might affect Iraqi oil production was a report issued by the US Embassy that the Mosul Dam was in danger of breach. Apparently the dam, built during the days of Saddam Hussein, sits on a foundation of gypsum and clay which is slowly being eaten away by water. Prior to the ISIS conflict, engineers had begun injecting grout into the foundation but this was stopped and never restarted. With the spring snow melt coming the pressure on the dam will rise increasing the risk of a compromise between now and mid May. While the Iraqi gubment is not worried about it the White House has been urging immediate action. Stay tuned.
Gold closed the day with a small loss of 20 cents to $1,234 an ounce.