US Stock Market Update

Stocks were moderately higher in the morning but picked up the pace in the afternoon after the Senate passed a key jobs bill and the dollar's weakness sparked a rally in commodity prices and stocks. The jobs bill includes tax breaks and funding for highway projects.

Investors also welcomed Japan's decision to hold interest rates at a low of 0.1% and double the amount of money available to banks through a short-term lending program. On Tuesday, the Fed opted to hold interest rates steady, as expected, and said that rates should stay near zero for the foreseeable future.

Financials and energy producers led the rally, with JPMorgan and Exxon Mobil climbing more than 1%. Hartford Financial Services rallied 6% on news the company plans to sell shares and debt to raise funds to repay its US$3.4B bailout. Massey Energy Co gained 7% after the coal producer agreed to buy Cumberland Resources for US$960M and said the acquisition will add to earnings this year.

Makers of paper products rose after the American Forest Paper Association said containerboard paper production rose 8.9% in February from a year ago. International Paper Co, Temple-Inland and Rock Tenn rose between 6% and 7%.

Blockbuster plunged 31%. The money-losing video rental chain with US$855.9M in debt said it may file for bankruptcy.

The Producer Price Index, a measure of wholesale inflation, fell 0.6% in February for the biggest drop since July of last year after being expected to fall 0.2%. The so-called core PPI, which strips out volatile food and energy prices, rose 0.1% in the month, as expected.

US Economic Calendar

• Mar-18 - Core CPI (For: Feb, F/Cast: 0.1%, Prior: -0.1%)
• Mar-18 - CPI (For: Feb, F/Cast: 0.1%, Prior: 0.2%)
• Mar-18 - Initial Claims (For: Mar-13, F/Cast: 455K, Prior: 462K)
• Mar-18 - Continuing Claims (For: 3-Jun, F/Cast: 4522K, Prior: 4558K)
• Mar-18 - Current Account Balance (For: Q4, F/Cast: -$119.3B, Prior: -$108.0B)
• Mar-18 - Leading Indicators (For: Feb, F/Cast: 0.1%, Prior: 0.3%)
• Mar-18 - Philadelphia Fed (For: Mar, F/Cast: 18, Prior: 17.6)

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