The S&P Energy Index (+2.5%) is sharply higher this morning and is the largest advancing sector in the broader market (+1.6%).
Sector News: ATPG (+1.6%) received a permit to resume drilling the Mississippi Canyon Block 941 #4 well in the deepwater Gulf of Mexico, on Friday afternoon. GPOR (+6.5%) commenced an underwritten public offering of 4 mln shares of its common stock. The co was also initiated with a Buy at Sidoti. APC (+3%) announced a joint-venture agreement with a subsidiary of Korea National Oil whereby KNOC will earn approximately 1/3 of co’s interest in its Maverick Basin assets, located in southwest Texas, for ~$1.55 bln.PTR (+2.9%) and a subsidiary of Saudi Aramco signed a Memorandum of Understanding related to the planned development of a 10 million metric tons per annum (200,000 barrels per day) grassroots full conversion refinery in Yunnan Province in the People’s Republic of China.
Broker Calls: GEVO (-0.3%) was initiated with Overweight at Piper Jaffray. EXH (+4.9%) was upgraded to Outperform at Credit Suisse. TSS (+1.4%) was initiated with a Hold at Citigroup.
Futures: A spike in the dollar index, and poor econ data, has pushed April WTI crude oil ($102.01 +$0.94) to its worst levels of the morning. It it still in positive territory in mid-morning trade, however. April natural gas ($4.216 +$0.048) has rallied off its session lows to trade to fresh highs at $4.228, a fresh ~2 week high.
Stock indices opened on a strong note and have extended. Top performing sectors include: Telecom TTH +2.3%, Coal KOL +2.2%, Silver SLV +2.1%, Energy XLE +2%, Energy XLE +2%, Technology XLK +2%, Disk Drive +2%, Ag/Chem MOO +2%, Semi SMH +1.9%, Industrial +1.9%, Casino BJK +1.8%, Broker IAI +1.6%, Defense PPA +1.6%, Software IGV +1.5% (MSFT +2.6%)
BONDS
Treasuries moved to their worst levels of the session following word the U.S. Treasury would unwind its $142 bln mortgage portfolio. The announcement will put an additional $10 bln of supply on the market each month, and will compete with Treasuries for dollars. The complex saw little reaction to another disappointing housing number as existing home sales fell short of expectations. Yields across the curve continue to hover just below session highs with the 10-yr near 3.35%. A slighty steeper yield curve continues as the 2-10-yr spread hangs out near 270 while the 10-30-yr spread is flatter at 112. Precious metals trade higher with spot gold up 12 dollars to 1431 and spot silver higher by 63 cents at 35.90. Click here to see a 5 minute 10-yr yield chart.
2-yr -03/32 @ 99 30/32
3-yr -07/32 @ 100 11/32
5-yr -14/32 @ 100 12/32
7-yr -18/32 @ 100 05/32
10-yr -20/32 @ 102 09/32
30-yr -24/32 @ 104 20/32
