* Major averages end higher
* Majority of S&P 500 sectors gain; energy leads
* U.S. 10-Year Treasury yield hits 5-week high
NEW YORK, March 1 (Reuters) - Welcome to the home for real-time coverage of U.S. equity markets brought to you by Reuters stocks reporters and anchored today by Terence Gabriel. Reach him on Messenger to share your thoughts on market moves: terence.gabriel.tr.com@reuters.net
MAJOR AVERAGES GAIN; NASDAQ UP FOR 10TH STRAIGHT WEEK (1609 EST/2109 GMT)
The major averages gyrated, but ultimately closed higher on Friday as optimism on trade countered weak data. the end, the S&P 500 .SPX gained for a fifth straight week. The Nasdaq Composite .IXIC advanced for a tenth straight week. That's the IXIC's longest winning streak since an 11-week run from October to December 1999.
The Dow .DJI , however, fell 0.021 percent for the week, ending a 9-week run.
Here is Friday's closing snapshot:
(Terence Gabriel)
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A DOWNSIDE TO THE RESOLUTION ON STEEL TARIFFS (1520 EST/2020 GMT)
Concern - and now optimism - over China has largely taken over the trade discourse among market watchers. But in a note distributed on Friday, analysts at UBS point to another trade development that could bear watching: namely, the status of tariffs on steel imported from Canada and Mexico.
The United States may be moving toward removing those tariffs and possibly replacing them with quotas. That might not be a good thing, according to UBS.
On the surface, the removal of steel tariffs should benefit manufacturers that have faced rising costs. The increase in steel prices created a hurdle last year for companies such as Whirlpool Corp (NYSE:WHR) WHR.N , Caterpillar Inc (NYSE:CAT) CAT.N and Procter & Gamble Co PG.N , which received an exemption from the tariffs.
On the other hand, says UBS, capping the level of imports could bar certain companies from getting the amount of steel they need, especially for specialized products that aren't readily available in the United States. That could end up hurting industrial production.
(April Joyner)
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INDIVIDUAL INVESTORS GET GIDDY (1440 EST/1940 GMT)
Optimism over the short-term direction of stock prices, once again, pushed higher in the latest AAII Sentiment Survey released Thursday. This as pessimism fell to its lowest level in more than a year. (Click on chart below)
AAII reported that bullish sentiment rose 2.3 percentage points to 41.6 percent. Optimism was last this high on October 3, 2018 when it hit 45.7 percent. This increase also came with a jump of 3.1 percentage points in neutral sentiment to 38.4 percent. Bearish sentiment slid 5.4 percentage points to 20.0 percent. Pessimism was last lower on January 3, 2018 when it hit 15.6 percent. As a result the bull/bear divide rose to 21.63 percentage points.
Of note, AAII points out that pessimism is now at an unusually low level (more than one standard deviation below its historical average). According to AAII, historically, the S&P 500 index .SPX has realized below-average and below-median returns during the six- and 12-month periods following such readings.
(Terence Gabriel)
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FULL YEAR PROFIT ESTIMATES MAY BE STEADYING (1415/1915 GMT)
After falling sharply in recent months, U.S. profit growth forecasts for 2019 seem to be steadying.
Analysts were expecting 2019 profit growth of 4 percent for the S&P 500 .SPX as of Friday, compared with an estimate of 3.9 percent growth a week ago. (Refinitiv IBES data)
Investors have been closely watching the rate of growth given calls from some market watchers for a profit recession this year. Some see the outlook improving not just for the stock market but for earnings, given dovish signals from the Federal Reserve and more optimism about a U.S.-China trade deal.
"The Fed has removed the key obstacle for the economy - raising rates. The tariff issue is moving toward a preliminary conclusion (and) that should be helpful for the business community," said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:PRU) in Newark, New Jersey.
(Caroline Valetkevitch)
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MAJOR AVERAGES GYRATE, BUT STILL IN POSITIVE TERRITORY (1311/1811 GMT)
The major averages have gyrated throughout the session but are holding in positive territory around the midday mark. Some muted U.S. economic data kept a lid on gains. majority of S&P 500 .SPX sectors are higher on the day with healthcare .SPXHC and energy .SPNY jockeying for the leadership role.
Healthcare has strengthened off early session levels with the biotech sector .NBI outperforming. The Nasdaq Biotechnology ETF IBB.O is up close to 2 percent.
Energy is still up more than 1 percent, despite NYMEX Crude Futures CLcv1 turning negative.
(Terence Gabriel)
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AS HEALTHCARE WHIMPERS, BIOTECH BRINGS THE NOISE (1239 EST/1739 GMT)
The S&P 500 healthcare sector .SPXHC has significantly lagged the broad S&P 500 .SPX this year, but one big exception has been biotech.
The Nasdaq Biotechnology index .NBI was up 1.4 percent in mid-day Friday trading, well ahead of gains for the health sector and the broader market.
Puma Biotechnology PBYI.O shares were leading the charge, rising some 38 percent, after the company's breast cancer drug had strong sales. Celgene Corp CELG.O , whose shares have been jostled by doubts about its acquisition by Bristol-Myers Squibb (NYSE:BMY) BMY.N , were rising 2 percent and giving the Nasdaq biotech index a boost.
The biotech index has gained 18 percent this year while a the Spider S&P Biotech ETF XBI.P , which gives more weight to smaller and mid-sized biotech companies, has surged some 27 percent.
Biotech is benefiting in part from acquisition activity after the stocks swooned in 2018.
“That sector really lagged last year," Jeff Jonas, a healthcare portfolio manager with Gabelli Funds, told Reuters earlier this week. "It actually got down to the point where valuations are finally attractive and we are getting such a surge in deal-making."
(Lewis Krauskopf)
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SELL SIDE SENTIMENT STILL SUGGESTS ROOM TO RUN (1218 EST/1718 GMT)
BofAML is out with a report highlighting the latest reading on their Sell Side Consensus Indicator. The Sell Side Indicator is based on the average recommended equity allocation of Wall Street strategists. BofAML says it has found Wall Street's consensus equity allocation to be a reliable contrary indicator.
In February, the indicator fell slightly to 58.1 from 58.5 but continues to hover near a seven-and-a-half year high. (Click on chart below.)
BofAML notes that sentiment has continued to bounce around since the start of 4Q18, when concerns over trade, weakening profits and a hawkish Fed gained traction. However, despite this month's dip, equity sentiment has broadly improved this year given optimism on a U.S.-China trade deal, as well as a more dovish Fed.
According to BofAML, when the indicator has been at this level or lower, subsequent 12-month total returns have been positive 91 percent of the time. In fact, BofAML says, the indicator suggests a 10-percent or greater total return over the next 12 months. Although the bank is not targeting a 10-percent return for the S&P 500 .SPX , the indicator is one of five signals BofAML uses to drive its market call, which currently stands at 2900 for the S&P 500 by year-end.
(Terence Gabriel)
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CAN HISTORY KEEP REPEATING ITSELF? (1102 EST/1602 GMT)
Barring dramatically good or bad news, the market is due for a period of sideways inaction or sideslipping - or so a host of strategists and investors keep telling us due to the strong start to the year. But history suggests otherwise, according to DataTrek Research co-founder Jessica Rabe.
The S&P's January rally of 7.9 percent compares with a 1.2 percent average going back to 1958 and there have been just nine years of S&P January returns of 6.2 percent or higher in the last six decades, writes Rabe.
And for the following February, the S&P rose more than 75 percent of the time and gained 1.4 percent on average compared with February 2019's almost 3 percent gain.
In 75 percent of those years the S&P was higher in March with an average return of 1.5 percent, according to Rabe who also points to gains for April, May and June of those years.
"Should the US and China finally reach a trade agreement this coming month or even in Q2, that should also brighten the earnings outlook for the back half of the year as it gives businesses the clarity they need for more capital investment," said Rabe though she notes that history does not always repeat itself. Sure enough, by late morning on the first day of March, The S&P was obliging with a gain of 0.5 percent.
"So far, the trend is our friend, but we will keep monitoring it," Rabe said.
(Sinéad Carew)
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STOCKS HIGHER IN EARLY TRADE (1008 EST/1508 GMT)
The major averages rallied out of the gate in the wake of benign inflation data. Though in the wake of some soft data just released, they have slightly pared their initial rise.
February ISM Manufacturing PMI came in at 54.2, below an expectation for 55.5. Prices paid was 49.4 vs. the 51.5 Reuters estimate. Final University of Michigan Sentiment for February was 93.8, below the 95.7 expectation.
Nevertheless, a majority of major S&P 500 .SPX sectors are higher with energy .SPNY out front. NYMEX Crude Futures CLcv1 are up a touch.
Meanwhile, the U.S. 10-Year Treasury yield US10YT=RR has seen a 4-week high. With the rise in yield, defensive/bond proxy sectors such as real estate .SPLRCR and utilities .SPLRCU are among the underperformers so far today.
(Terence Gabriel)
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S&P 500 FUTURES: TEST OF A CHAMPION (0915 EST/1415 GMT)
It has been said that "the true test of a champion is not whether he can triumph, but whether he can overcome obstacles.”
Well, after rising as much as 21.5 percent from their late-December low, CME S&P 500 futures EScv1 , find themselves facing major obstacles, or resistance on the charts. (Click on chart below)
The 76.4-78.6 percent Fibonacci retracement zone of the September-December slide, at 2,799.98/2,813.90, is proving to be tough to overwhelm. Indeed, after hitting 2,814 on Monday, it's been a struggle. Additional resistance can be found at the mid-October to early December highs in the 2,816.25/2,826.50 area.
Until the futures can break through these levels, potential will remain for a further waning of momentum, and a downside reversal to set in. the recent rise, futures have consistently seen higher lows, the very definition of an uptrend. Thus, breaking even Tuesday's trough (2,775) may signal the best has been seen for now and a downturn is taking hold. In that event, the 200-day moving average (now 2,755.09) can be the next magnet.
(Terence Gabriel)
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FUTURES SHOW STRENGTH AHEAD OF THE OPEN (0833 EST/1333 GMT)
Futures are showing strength in premarket trade, though they have slipped off their highs over the last thirty minutes or so. in the wake of choppy, rangy action for most of the week so far, trading is poised to turn more spirited for the major averages at the open. as the Dow .DJI and Nasdaq Composite .IXIC both attempt to gain for a tenth straight week. The last time the Dow rose ten weeks in a row was in March-May 1995. A higher weekly close for the Nasdaq would lead to its best run since an 11-week streak in October-December 1999. terms of data, the Core PCE Price Index came in at 0.2 percent month-over-month vs. 0.2 percent estimate. The year-over-year reading was 1.9 percent also in-line with expectations. The U.S. 10-Year Treasury Yield US10YT=RR hit a 4-week high.
Meanwhile, it may be another rough day for gold mining shares GDX (NYSE:GDX).P . Spot Gold XAU= has traded down to a 2-week low. is your premarket snapshot:
(Terence Gabriel)
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<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ premarket03012019
https://tmsnrt.rs/2UaAA3r EScv103012019
https://tmsnrt.rs/2EEDzvP earlytrade03012019
https://tmsnrt.rs/2EF7Evc BofASSI03012019
https://tmsnrt.rs/2C1cst6 midday03012019
https://tmsnrt.rs/2C2ahFU AAII03012019B
https://tmsnrt.rs/2C0EPaT closer03012019
https://tmsnrt.rs/2C1GexS
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