US Stock Market Overview – Stocks Rally Driven By Energy as Crude Surges Higher

US stock prices were higher on Wednesday. Again, stocks were led higher by the Nasdaq, as technology shares continue to lead. Most sectors were higher led by Energy and Healthcare. Communications bucked the trend and was the only sector in the red. The energy sector was buoyed by a rally in crude oil prices which were buoyed following positive inventory figures.

Boeing again weighed on the Dow Industrials, despite a broad-based rally. The FAA announced on Wednesday that they would ground all 737 MAX 8 and 9 planes.

US Durable Goods orders rose in January led by a surge in aircraft orders. Producer prices also were reported as subdued according to the Labor Department. Looking forward, stocks are poised to continue their uptrend, but many believe prices have moved too far to fast. With implied volatility down to the lowest levels of the year, many are using this opportunity to hedge their positions.

US Data Showed Growth in Orders and Subdued Inflation

The US Commerce Department reported on Wednesday that Durable goods orders increased by 0.4% in January. Most of the gains were attributed to a rise in aircraft orders. Business investment also increases rising 0.8% which was the largest gain since July.

Wholesale inflation came out in line with expectations according to the US labor department. Producer prices increased 0.1% month over month in February. This follows a decline of 0.1% in January. Core PPI also increased by 0.1% in February. On a year over year basis, headline PPI increased 1.9%, and the core increased by 2.5%.

Energy Shares Rally in Crude Oil Draw in Stockpiles

Energy shares continued to rally and should by a lead moving forward as crude oil prices surge. Today’s extension of the energy rally followed the Energy Departments report on inventories. According to the EIA, US crude oil inventories decreased by 3.9 million barrels from the previous week. Expectations were for stockpiles to increase by 2.5-million barrels. Gasoline inventories decreased by 4.6 million barrels last week and distillate fuel inventories increased by 0.4 million barrels last week. Total petroleum inventories decreased last week by 10.2 million barrels last week.

Energy Demand Remains Stronger than Normal

Demand remains robust. total products demand over the last month averaged 20.9 million barrels per day, up by 2.2% from the same period last year. Gasoline demand was down averaging 9.0 demand supplied averaged 4.1 million barrels per day over the past four weeks, up by 3.1% from the same period last year.

Over the past four weeks, crude oil imports averaged about 6.8 million barrels per day, 9.0% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 573,000 barrels per day, and distillate fuel imports averaged 238,000 barrels per day.