[Chart courtesy of MarketWatch.com]
US stock index ETFs closed higher on Tuesday, with the Dow industrials and S&P 500 finishing at record closing highs as US factory orders topped estimates and health insurers rallied after winning an increase in a key Medicare payment rate.
Factory orders rose by three percent in February, boosted by demands for commercial aircraft and automobiles. That was the biggest gain five months and followed a revised one percent decline in January, a Commerce Department report showed.
Insurers rallied after the government gave up plans to cut payments for private Medicare Advantage insurers by 2.3 percent and said it would hike them by 3.3 percent next year instead.
In Europe, the Cyprus government completed talks with the so-called troika of lenders – the European Union, the European Central Bank and the International Monetary Fund. The island nation was granted two extra years, until 2018, to meet the targets linked to its bailout. The new deal will be discussed at a meeting of euro-area finance officials on April 4th.
The Dow Jones Industrial Average (DJIA) finished 89 points higher, after rising 111 points to hit an all-time intraday high of 14,684. Today’s close marks the blue-chip index’s highest close ever.
The S&P 500 Index (SPX) rose 8 points with healthcare posting the biggest gain and materials the sole laggard within its 10 business groups.
Treasury prices fell, with 10-year yields rising from the lowest level in nearly two months as US factory orders rose more-than-forecast in February, diminishing the allure for safe haven assets.
The US dollar moved higher against majority of its most-traded rivals as markets got ready for the first Bank of Japan policy meeting under the new Governor Haruhiko Kuroda.
The euro also eased against the greenback after data showed euro-zone manufacturing shrank further in March while unemployment hit a record high.
European stocks, meanwhile, rallied to a four-week high Tuesday after markets reopened following a four-day weekend as data showed US factory order surged in February.
The Stoxx Europe 600 index jumped 1.3 percent on the first trading day of the month.
In economic news, the final Markit purchasing managers’ index for manufacturing confirmed Eurozone factory output shrank further in March. However, at 46.8, the manufacturing output contracted less than initially estimated.
Data also showed unemployment rose to a euro-era high of 12 percent in February with Greece and Spain leading in joblessness. However, the DAX 30 index rose 1.9 percent in Germany while the CAC 40 index jumped 2 percent in Paris.
Elsewhere, the Cyprus General Index tripped 2.6 percent after opening for the first time in two weeks. Cyprus Finance Minister Michalis Sarris resigned after helping the government finalize the terms of the international aid agreement.
Both of our Trend Tracking Indexes (TTIs) advanced after yesterday’s pullback and closed the day as follows:
Domestic TTI: +3.44%
International TTI: +7.00%
The latest update to the Model ETF Portfolios will be posted tomorrow morning.