Nasdaq, Standard & Poor’s, Dow rose after durable goods orders fell

Stocks started higher on Monday, with a rebound in buying after a sharp drop in major durable goods orders prompted some hawkish pressure from the Federal Reserve.

NASDAQ (COMP.IND) +1%S&P (SP500) +0.7% Dow (INDU) +0.6% were higher.

Treasury for 10 years bear fruit (US10Y(down 4 basis points to 3.91%, yield of 2 years)US2Y) fell by 2 basis points, to 4.78%.

Durable goods orders for January fell 4.5%, more than expected and the biggest drop since the lockdown. Dec has been modified down. Core orders rose more than expected, but also saw downward revisions in December.

“Major orders eased due to a sharp drop in civilian aircraft orders, reversing the December jump, which clearly indicated Boeing’s order data,” wrote Ian Shepherdson of Pantheon Macro. The increase in orders excluding transportation was the largest since March last year, but it follows a 0.4% drop in December and – like most other activity data for January – is likely to be supported by warmer-than-usual weather in January. This will not continue, and means the rebound will likely spread across February and March.”

The odds of a quarter-point Fed hike in March rose slightly after the numbers arrived.

January pending home sales totaled after the start of trading. The consensus is an increase of 1%.

This is “a sector affected by Fed tightening,” said Paul Donovan of UBS.

See the top stocks as they move this morning.