MarketView for March 14

Summary

The S&P 500 broke a five-day streak of gains on Wednesday as Wall Street found little reason to extend a rally that took the benchmark index to four-year highs. Procter & Gamble hit a 52-week high at $67.95 before dipping 0.1 percent to close at $67.85. Chevron closed at a 52-week high at $112.28 during the session, only to slip 0.5 percent to end at $110.69.

The S&P 500 hit an intraday high of 1,399.42, its highest level since early June 2008, before pulling back in the afternoon. The 1,400 level could act as a barrier to further gains.

Momentum continued in Apple, limiting losses in big-cap averages. Shares of Apple surged for a sixth straight day, climbing 3.8 percent to $589.58 following positive comments from analysts. Morgan Stanley lifted its price target on the stock to above $700. Apple’s shares are up about 46 percent so far this year, leading some to call for a pullback in the largest domestic company by market value.

Bank stocks, a major component of the S&P 500's 11 percent gain for the year, led a late-day surge in Tuesday's rally after JPMorgan Chase announced it will raise its dividend.

The Fed said late Tuesday most of the largest domestic banks passed their annual stress tests of capital strength in a report that underscored the financial sector's recovery, but called out a few that failed, including Citigroup. Shares of Citigroup lost 3.4 percent to $35.21 for the day. Also included were SunTrust, Ally,  and MetLife.

The central bank also forecast "moderate" growth over coming quarters with the unemployment rate declining gradually versus the "modest" growth the central bank said it expected in January. The change in language, used in the Fed's statement after a one-day policymakers' meeting, was seen as a slight upgrade of the economic outlook.

The increasing optimism regarding the economy helped lift the dollar to an 11-month high against the yen and a 1-month high versus the euro. The dollar's advance alongside a strong equities market underscores the opinion by many investors and economists that our economic recovery is sustainable.

NXP Semiconductors rose 3.2 percent to $25.66 after Goldman Sachs added the chip maker to its "conviction buy" list and raised its price target to $30.

However, Zynga reversed earlier gains, sliding 0.2 percent to $13.35. In morning trading, the stock had climbed to an intraday high of $13.70. Before the opening bell, Zynga announced a secondary offering of up to $400 million.

Approximately 7.45 billion shares changed hands on the three major equity exchanges, a number that was slightly below last year's daily average of 7.84 billion shares.

Crude Oil Inventories Rise

A report released by the Energy Information Administration indicated that crude inventories rose last week, as supply at the Cushing, Oklahoma delivery point increased to a nine-month high, while the inventory of oil products fell. Crude oil inventories were up by 1.75 million barrels to 347.45 million barrels in the week to March 9. Stockpiles at Cushing rose by 2.52 million barrels to 38.7 million barrels. Cushing has had its largest eight-week build since early 2009, and stood at the highest since June 2011.

Cushing stocks have been rising as Enterprise Products prepares to reverse a key pipeline known as Seaway to siphon more crude away from Cushing after June 1.

Weekly crude imports edged up slightly by 4,000 barrels per day (bpd) to average 8.68 million bpd, the EIA said. Distillate stockpiles fell by 4.68 million barrels, for a 1.3-million-barrel draw down to 134.81 million barrels. Average distillate demand over the last four weeks fell 7.1 percent compared with year-earlier levels.

Gasoline inventories fell by 1.41 million barrels, slightly more than analyst forecasts for a 1 million-barrel decline. Demand dropped 7.2 percent against the same period in 2011. Cushing inventory levels reached their record high in April of 2011, when hit 41.9 million barrels, EIA data shows.

Refinery utilization fell 1.2 percentage points to 82.7 percent of capacity last week, compared with calls for an increase of 0.1 percentage point. U.S. crude oil prices seesawed after the data, initially rising, then falling by 85 cents a barrel to $105.86.