Update: Equities Higher With S&P 500 Record In View

After a surprisingly weak reading on U.S. manufacturing yesterday, equity markets are rebounding nicely, with the DJIA hitting new all-time highs, and the S&P 500 back within striking distance of its all-time intra-day high of 1,576.09, set on October 11, 2007.  Data showing a rise in U.S. factory orders in February, strength in European markets as well as better than expected March car sales are helping fuel the rally.  Additionally, health insurers are outperforming on positive news about Medicare reimbursement rates.

As of 11AM, the broader U.S. indices are up roughly +0.7%, with the S&P 500 currently up +0.65% to 1,572.

Main Factors Driving Early Trade:

–          U.S. factory orders climb 3.0% in February – Orders for goods produced in U.S. factories rose 3% in February to mark the biggest gain in five months, mainly because of increased orders for aircraft. Economists predicted orders to rise 2.9 percent after a 2.0 percent contraction in January.

–          Car Sales Steal The Spotlight – On better than expected March sales figures, Edmunds.com raised its 2013 forecast for U.S. light vehicle sales to 15.5 million, signaling optimism about the industry. Ford Motor Co. F +2.09%   said its U.S. sales rose 5.7% in March and Chrysler Group LLC, which is owned by Italy’s Fiat SpA IT:F -1.93%   , said its U.S. sales climbed 5% in March from the same period a year ago, marking the best monthly sales since December 2007. General Motors said total March sales rose 6.4% to 245,950 from a year ago. Overall sales were the best for March in five years, the company said.

–          Worst Fears For HMO Business Not Likely to Be Realized – The Centers for Medicare and Medicaid Services announced after the closing bell Monday that they will be boosting Medicare Advantage reimbursement rates, rather than cutting them as initially proposed.

–          Euro-Zone Stabilizing Despite Continued Weak Economic Data – European stocks rose to a one-week high as trading resumed after a four-day weekend while Italian and Spanish bond yields declined.  Italy’s 10-year rate fell eight basis points to 4.68 percent, while Spain’s yield slid seven basis points to 4.99 percent. Cyprus government officials are seeking easier bailout terms in talks with representatives of the European Union and International Monetary Fund today, before a meeting of euro-area finance officials later this week. On the economic front, however, the number of unemployed persons in the euro zone rose to 19.071 million in February, the highest level on record. Euro zone PMIs – monthly gauges of manufacturing activity – were decidedly negative in March.

For Afternoon Trading:

–          Four Federal Reserve Presidents Will Give Public Speeches Today – Minneapolis Fed President Narayana Kocherlakota speaks at 1 PM ET, followed by Atlanta Fed President Dennis Lockhart at 1:30. At 7:30 PM, Chicago Fed President Charles Evans and Richmond Fed President Jeffrey Lacker will speak at an event together.

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