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[BRIEFING.COM] Bonds gave stock investors a reason to buy on Tuesday. The Treasury market has occupied much of the equity market's spotlight lately, and rising yields have stunted a meaningful advance. Today, sharp improvements across the curve relieved the stock market. Virtually every area benefited from a broad-based rally - despite the fact that energy prices surged.

Oversold conditions prompted technical corrections within the Treasury market. Some worse than expected economic reports (Retail Sales and the Current Account) added some steam to that market's improvement. The 10-year note rose 16 ticks and fell to a 4.70% yield. At the close of equity trade on Monday, the benchmark note was yielding 4.76%. Rate-sensitive areas like banking, homebuilding, and utilities soared today, and the Financial sector (+1.2%) led the broader market's advance. For that sector, the investment banking and brokerage industry was the driving force. Before the bell, Goldman Sachs (GS 149.46 +8.74) delivered first quarter earnings that surpassed analysts' expectations by $1.79 per share. The company reported 64.4% top line growth, and upped its quarterly dividend by 40%. The profit that Goldman reported was the highest ever for a Wall Street firm, and news of it helped reverse what had been the early market's bearish sentiment. Its stock surged, and its peers soared in sympathy. Goldman's performance underscores the bullish view we continue to hold on the industry. Eyes are likely to be focused on Lehman Brother's (LEH 145.35 +3.13) report tomorrow.

The Technology sector also contributed spirited leadership. Semiconductors were particularly responsible for the advance, but bargain hunters took almost each tech industry substantially higher. The same was true for Materials (+1.7%). Although metal prices extended their declines, related stocks regained some recently lost ground. Upgraded Phelps Dodge (PD 71.80 +4.36) shares were especially strong, and steel surged. Speaking of a surge, prices across the energy complex extended yesterday's rebound. Expectations for colder weather and ongoing geopolitical tensions are supporting prices, and indications that a major refinery will close for unexpected maintenance drove prices higher. Unlike yesterday, though, that price action did not stifle the market's advance. It led to a supportive 1.9% gain in the Energy sector, and took a back seat to the favorable Treasury market conditions.

Even the most energy-sensitive areas of the market rallied. Transportation issues, led by airlines, rose significantly, and the Industrials sector registered a 1.1% gain. Retailers outperformed. That industry's advance was even more noteworthy in light of today's Retail Sales report. The February decline did not very much surprise the equity market, and an upward revision to January's very strong gain helped temper its effect. Nonetheless, total retail sales declined for the first time in six months, and the decline was worse than expected. As mentioned above, homebuilders were another especially bright spot in the Discretionary sector (+1.1%). Along with falling bond yields, an upgrade on DR Horton (DHI 33.69 +2.14) added momentum.

Procter & Gamble (PG 60.00 -1.98) was the market's sorest spot. The company upped the low-end of its third quarter profit forecast by a penny, raised its dividend 11%, and said that sales growth is trending toward the mid-point of its previously-guided 20-23% range. That guidance was generally in-line with analysts' expectations, but its organic growth target provoked selling. P&G trimmed the high end of its projection by 1% - now anticipating 5-6% organic growth. As the stock has risen nearly 5.5% since the beginning of the year, the slightly lowered growth target gave investors reason to secure some profits. Its decline was effectively offset by solid gains across the rest of the market, though. By the bell, the Consumer Staples sector had managed to pare almost all of its intra-day loss.
NYSE Adv/Dec 2401/857...Nasdaq Adv/Dec 1955/1105