I’m wondering if the Fed officials buy options just before each statement they make.  If so they’re making a fortune since another little hint today about the stability of the economy and seeing “no serious [interest rate] risks on the horizon” gave the Dow another rather big bolt up 399 points.  With today’s boost, the indexes have now recovered more than two-thirds of the losses since the January 26 peak and the VIX is now at half of its correction level.  Treasury notes have eased from last week’s 4-year high and investors remain confident in the global economy.  Gains in the three critical sectors of the market – tech, industrials and financial – have reinforced focus on economic strength.  At 6.3 billion shares traded, volume is well below the 4-week average of 8.36 billion but let us recall that these extraordinary high volumes were all part of the panic selling during the correction earlier this month. 

mon  FEBRUARY 26, 2018 / 4:58 pM

Wall Street rises as concerns over interest rates ease

April Joyner

DJ:  25,709.27  +399.28        NAS: 7,421.46  +84.07        S&P:  2,779.60  +32.30     2/26

NEW YORK (Reuters) - U.S. stocks rose to more than three-week highs on Monday, recovering much of the losses sustained in a sell-off earlier this month, as a decline in Treasury yields assuaged investor concerns about rising interest rates and refocused attention on economic growth.  All three major indexes rose more than 1 percent. The S&P 500 is now just 3.2 percent below its peak on Jan. 26. The CBOE Volatility Index .VIX also dipped slightly to 15.8, though it remains above levels seen before the S&P’s peak. 

The U.S. 10-year Treasury note yield eased to 2.8642 percent US10YT=RR, slipping from a four-year high it hit last week. On Friday, the Federal Reserve said it expected economic growth to remain steady and saw no serious risks on the horizon that might alter its planned pace of interest rate hikes.  “It provides some relief that yields aren’t just going straight up,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. “Overall, earnings numbers continue to move higher. Investors still have confidence in the global economy.” 

The major indexes fell from late-January peaks on concerns that rising inflation could cause the Fed to raise rates more than three times this year, as its previous statements indicated.  Investors will scrutinize testimony starting on Tuesday from Fed chairman Jerome Powell who faces questions from both houses of the U.S. Congress in his first major set piece since he took over from Janet Yellen this month.

The Dow Jones Industrial Average .DJI rose 399.28 points, or 1.58 percent, to 25,709.27, the S&P 500 .SPXgained 32.3 points, or 1.18 percent, to 2,779.6 and the Nasdaq Composite .IXIC added 84.07 points, or 1.15 percent, to 7,421.46.

Among the leading S&P 500 sectors were technology.SPLRCT, which gained 1.6 percent, industrials .SPLRCI, which rose 1.4 percent, and financials .SPSY, which added 1.5 percent. The broad gains across those cyclical sectors reflect investors’ focus on economic strength, Lerner said.

Qualcomm (QCOM.O) was up 5.8 percent after the chipmaker urged Broadcom (AVGO.O) to enter into price negotiations for the first time on Broadcom’s $117 billion offer for the company.  Berkshire Hathaway (BRKa.N) gained 4.0 percent after Warren Buffett said his conglomerate, which is sitting on $116 billion of cash, is “more inclined” to repurchase stock than pay dividends as a means to use excess cash.

Advancing issues outnumbered declining ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 1.91-to-1 ratio favored advancers.  The S&P 500 posted 31 new 52-week highs and one new low; the Nasdaq Composite recorded 105 new highs and 36 new lows.

Volume on U.S. exchanges was 6.3 billion shares, well below the 8.36 billion average over the last 20 trading days.