Stock Market Update - Thu Mar 29 16:20:01 EDT 2007

[BRIEFING.COM] Riding a shift in sentiment and better than expected economic data, the stock market started Thursday's session on an upbeat note.  Its bullish tune quickly changed, however, when the technology sector got hit with selling interest and oil prices spiked more than $2.00 to trade above $66 per barrel.

When it seemed as if the market was destined to suffer another down day, things changed just as quickly in the final hour as a rush of buying interest pushed the major indices back into positive territory.  The Nasdaq for its part was down as much as 20 points at its low for the day.

There wasn't any specific news catalyst for the late surge, but it was emblematic of a market that has had a manic demeanor ever since the global stock market sell-off on Feb. 27.

At the end of the day, nine out of ten economic sectors had recorded a gain.  The lone holdout was technology (-0.12%) but its loss is better than it appears considering the sector was down close to 1.0% with less than two hours to go in the session.

One of the "rallying" points for the market was the relative strength of the financial sector (+0.57%) which was a main beneficiary of the late-day buying interest.

Energy (+0.91%) was another notable leader as it drafted off the surge in crude prices that followed reports of the death of a presidential candidate in Nigeria.  That news, combined with the growing tension in the Persian Gulf between Iran and the UK, added to the sense of uncertainty for traders with respect to supply lines and drove a speculative rally that saw crude futures for May delivery top out at $66.50 per barrel.

Separately, it was reported that initial claims fell 10,000 to 308,000 in the latest week and that Q4 GDP was revised up to 2.5% from 2.2%.  Those indications were well-received (even though the GDP data is dated) as they reinforced the view that labor market conditions remain strong and that economic growth is moderating to a point that should help curb inflation.

The late rally pushed the S&P 500 into positive territory for the year (+0.30%).  Friday marks the end of the first quarter for traders and the Personal income and Spending report, which contains the Fed's favored inflation indicator in the form of the core-PCE index, should help determine if the first quarter ends on a positive or negative note for the S&P.

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