Retail Investing: Short Term Concerns for Long Term Options Investing

imageRecently I presented the OICs (Options Industry Council) newest options seminar, Options Fundamentals. Options Fundamentals is part one OICs new three part series developed with retail investors in mind. This three part series is presented over three months with each section being presented one month after the previous section. Next month will be Trading and Understanding Risk and the last in the series is Option Trade Management.

Options Fundamentals covers the components of an option contract, the rights of option holders and the obligations of short option positions as well as some basic strategies such as buying calls and buying puts. I’ve been teaching options for the OIC for over 10 years now and have been in the options business since 1982. I’ve spent my career on the retail side of the business talking to and learning from Account Executives, Financial Advisors and Registered Reps for firms across the country. I’ve never traded firm money or made markets on the floor, I’ve always dealt with investors and their Registered Rep. – a role that I’ve always found enlightening and rewarding.

As the years passed, I’ve noticed large numbers of individual investors taking greater responsibility for their investments and taking a more active role in their financial futures. Many are turning to options, they have found that options are very flexible and offer solutions to short term concerns that long term investors come across from time to time. Many times investors are concerned about earnings or a new product release. This concern is short term, the investor believes in the company and may have owned the stock for years, but they may be concerned about a short-term event like bad earnings or a delayed product release. The thought process begins:

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European Court Experts, Wall Street News

What if the stock drops? What if the stock really drops? Should I sell, should I tough it out?

Here is where the protective put helps. The protective put acts like an insurance policy by establishing a short term (may be long term if a LEAP is used) possible selling price for the stock should something potentially negative occur. Sure you pay a premium for the policy and if the nothing bad happens you will lose that premium, but if it does, that protection can help minimize any loss. It is really no different than car or home insurance in many ways. Every six months I pay Joes All Star Insurance for collision and theft coverage for 2 cars and so far I haven’t collected, but I sleep better at night. The protective put acts the same way. The protection is there if you need it, but you’re happy when you don’t.

Another option strategy employed by long-term investors is the covered-write. Many times investors buy stocks hoping for a rise in the price but don’t see the rise they were expecting. Again, they believe in the stock, but could use a little additional income (can’t we all!).

Here’s where the covered-write may help. The investor can sell a call. Now a short call is an obligation to sell stock at a certain price within a certain period of time, so this position limits upside potential. However, in exchange for giving up that upside potential the investor receives a premium. That premium is his to keep no matter what happens to the stock. If the stock does not rise above the price before the options expiration date, the option expires worthless and the investor keeps the premium. If the stock falls, the investor still keeps the premium. If the stock rises high enough, the investor will be obligated to sell his shares. There are actions the investor can take to avoid selling the stock, this falls into trade management.

Wall Street, New York

Wall Street, New York

Trade management you ask? Do you like to buy and hold? Set it and forget it? If you prefer to set it and forget it then options may not be for you. Options require time, effort and some maintenance. You must be aware of stock movements and option movements; you must understand what happens if the stock goes up or goes down and what happens as time passes – all of which impact your investment.

Not every option strategy works in every situation, but they work in some situations that may apply to your needs. The flexibility offered to both short term, and long term investors is not found in any other financial product.

Once again they do require time and effort, but it’s your money and your financial future, isn’t that worth it?

Used properly options can help control risk, generate income or speculate on stock movements. Remember, options involve risk and are not for everyone. Be sure to know and understand the risks and rewards of any option strategy before entering into that strategy.

3 Diversified ETFs to Watch in Q2 – ETF News And Commentary

Wall Street, New York City

Wall Street, New York City

The ETF industry saw lots of volatility in the first quarter of this year thanks to the start of the QE taper, polar vortex in North America, deepening slowdown in China, return of deflationary worries in Euro zone and the geo-political issue in Russia which had a ripple effect in other countries. All these have goaded the „risk-off“ investing theme in investors‘ minds last quarter and should be felt in the second quarter as well.

If these were not enough, investors should note that the months of April and May are normally seasonally downbeat for the U.S. stock markets. After a mid-month tax deadline, investing in April normally loses some steam. On a separate note, April denotes the last month of the six-month long seasonally bull phase of the stock markets.

To add to this, we have also witnessed some sort of sector rotation lately, with some high-flying sectors like technology being hard hit, and defensive sectors like utility gaining strength (read: 3 Utility ETFs Surviving the Market Turmoil ). Meanwhile, the Fed’s Chair hinted at hiking short-term interest rate in mid 2015, leaving an impact on the bond market.

Thanks to all these worries, one needs to be hawk-eyed while choosing ETFs for a portfolio in Q2. Thus, identifying some ETF winners would be a prudent idea to make an investment decision.

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European Court Experts, Market News

Here we focus on three funds with favorable Zacks ETF Ranks and moderate risk outlook that you can capitalize on in order to enrich your portfolio:

iShares S&P Mid-Cap 400 Value ETF ( IJJ )

While U.S. small caps had an astounding run last year, making the segment slightly overvalued, the large-cap segment is vulnerable to ongoing global shocks. Amid such a backdrop, investors should have a middle-of-the-road approach choosing mid-cap ETFs.

This often-ignored slice of capitalization offers the best of both worlds. Lesser vulnerability to international tremors compared to larger ones and lower risk profile than their small-cap counterparts make mid-cap ETFs a safe bet. The U.S. economy appears as one of the most stable and decently growing global regions this year.

Mid-cap ETFs should benefit from this improving U.S. economy. Also, investors should look for some value focus even in this slice of the market, given heightened global volatility. And to do this, IJJ could a good way to target the best of the segment.

The fund zeroes in on the S&P MidCap 400 Citigroup Value Index for exposure to about 292 domestic mid-cap names having diversified exposure to various sectors. The product is well spread out as it puts about 10.27% of its assets in the top 10 holdings with no stock accounting for more than 1.27% of the basket. Hollyfrontier (1.25%), SL Green Realty (1.20%) and Fidelity National (1.13%) occupy the top three positions.

imageHowever, the product is heavily dependent on financials, which make up for 29% of the total assets, while industrials, information technology and consumer discretionary round out the next three spots. IJJ is one of the most popular and liquid choices in the mid-cap value ETF list.

The fund has returned 3.60% year-to-date. It has a Zacks ETF Rank of 2 (Buy) with low risk outlook.

DB Agriculture Long ETN ( AGF )

The year 2013 was not good for agricultural commodity investing thanks to easing supply concerns and favorable weather conditions which caused this fund to hurtle lower. However, the scenario has been turning around since the start of 2014 on supply crunch for some soft commodities and global recovery which led to enhanced consumption (read: 3 Commodity ETFs Surging on Russia Sanctions ).

While we currently have some top-ranked Zacks ETFs in the agricultural space including T eucrium Corn ETF ( CORN ) based on one of the most important U.S. crops, corn, and some sugar ETFs, we prefer to bet on all top-performing agricultural-based commodities through a single investment, AGF (Read: Zacks ETF Rank Guide ).

AGF delivers an array of various soft commodities such as corn, sugar, soybean, and wheat all of which have been exhibiting a favorable pricing trend currently. Corn and wheat are gaining on the Ukrainian issue and inclement weather in some major growing regions. Though, short-term in nature, we expect these price drivers to remain in place in the quarter ahead.

With AUM of only $3.5 million, the ETN is unpopular and less liquid in the agricultural commodities space. The product is expensive when compared to other choices in the segment. It charges investors 75 bps in fees per year and an extra cost in the form of wide bid/ask spread thanks to low daily trading.

The fund has a Zacks ETF Rank of 3 (Hold). AGF was up about 45% over the last one month against 3.5% gain in the broader and the largest agro ETF PowerShares DB Agricultural ETF ( DBA ).

iShares MSCI EAFE Value ETF ( EFV )

Investors with significant exposure in the U.S. can use EFV for geographic diversification of their portfolio. With an asset base of $2.5 billion, EFV is among the largest ETFs in the foreign large cap equities space. The fund looks to offer exposure to the MSCI EAFE Value Index.

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Frankfurt Stock Exchange

The Index seeks to pick value-oriented securities having higher book value to price ratios, higher forward earnings to price ratios, higher dividend yields and lower long-term growth rate projections than securities that have a growth focus.

More than 65% of the holdings are invested in Europe with UK being the front runner accounting for a quarter of the portfolio. Japan (19%), France (11%) and Germany (10.59%) round out the next three positions (read: Is This a Better Europe ETF? ).

The ultra-low interest rates prevailing in these regions with no possibility of a rise in rates down the line, unlike the U.S., might compel some investors to look for dividend yields instead. And for that group of yield-hungry investors, EFV is one of the best suited options. EFV’s 30-day SEC yield stands at 3.99% (as of March 31, 2014).

The fund has low concentration risk from an individual securities perspective, as it puts only 19.45% of share in the top 10 holdings. HSBC Holdings Plc (2.89%), BP Plc (2.28%) and Total SA (2.14%) are the three top elements in the basket. The ETF focuses mostly on the financial sector with two-fifth of assets invested in it. The product charges investors 40 basis points a year in fees, which is lower than most comparable ETFs.
EFV presently carries a Zacks ETF Rank # 2 (Buy). The fund was up about 3% in the last week.

Real Estate, Valuation

 

Rockefeller Center, New York City

Rockefeller Center, New York City

Estimating the value of real property is important to a variety of endeavors, including real estate financing, listing real estate for sale, investment analysis, property insurance and the taxation of real estate. For most people, determining the asking or purchase price of a property is the most useful application of real estate valuation. This article will provide an introduction to the basic concepts and methods of real estate valuation, particularly as it pertains to real estate sales.

SEE: How To Value A Real Estate Investment Property

Basic Valuation Concepts
Value
A main consideration in appraising is to determine a property’s value: the present worth of future benefits arising from the ownership of real property. Unlike many consumer goods that are quickly used, the benefits of real property are generally realized over a long period of time. Therefore, an estimate of a property’s value must take into consideration economic and social trends, as well as governmental controls or regulations and environmental conditions that may influence the four elements of value:

Demand – the desire or need for ownership supported by the financial means to satisfy the desire;
Utility – the ability to satisfy future owners‘ desires and needs;
Scarcity – the finite supply of competing properties and
Transferability – the ease with which ownership rights are transferred.
Value Vs. Cost and Price
Value is not necessarily equal to cost or price. Cost refers to actual expenditures; for example, materials and labor. Price, on the other hand, is the amount that someone pays for something. While cost and price can affect value, they do not determine value. The sales price of a house might be $150,000, but the value could be significantly higher or lower. For instance, if a new owner finds a serious flaw in the house, such as a faulty foundation, the value of the house could be lower than the price.

European Court Experts, Real Estate Valuation. Dr. Johannes Ausserladscheiter, CEO

European Court Experts, Real Estate Valuation. Dr. Johannes Ausserladscheiter, CEO

Market Value
An appraisal is an opinion or estimate regarding the value of a particular property as of a specific date. Appraisal reports are used by businesses, government agencies, individuals, investors and mortgage lenders when making important decisions regarding real estate transactions. The goal of an appraisal is to determine a property’s market value: the most probable price that the property will bring in a competitive and open market. Market price, the price at which a property actually sells, may not always represent the market value. For example, if a seller is under duress because of the threat of foreclosure, or if the property was sold in a private sale without being exposed to the open market, the property may sell below its market value.

Appraisal Methods
An accurate appraisal depends on the methodical collection of data. Specific data, covering details regarding the particular property, and general data, pertaining to the nation, region, city and neighborhood wherein the property is located, are collected and analyzed to arrive at a value. Three basic approaches are used during this process to determine a property’s value.

Method 1 – Sales Comparison Approach
The sales comparison approach is commonly used in valuing single-family homes and land. Sometimes called the market data approach, it is an estimate of value derived by comparing a property with recently sold properties with similar characteristics. These similar properties are referred to as comparables, and in order to provide a valid comparison, each must:

imageBe as similar to the subject property as possible;
Have been sold within the last year in an open and competitive market and
Have been sold under typical market conditions.
Comparables
Comparables should be as similar as possible to the subject property, and at least three or four should be used in the appraisal process. The most important factors to consider when selecting comparables are the size and the location of the subject and the comparable properties. The location is extremely important because it can have a tremendous effect on a property’s market value.

Adjustments
Since no two properties are exactly alike, adjustments to the comparables‘ sales prices will be made to account for dissimilar features and other factors that would affect value, including:

Age and condition of buildings;
Date of sale, if economic changes occur between the date of sale of a comparable and the date of the appraisal;
Location, since similar properties might differ in price from neighborhood to neighborhood;
Physical features, including lot size, landscaping, type and quality of construction, number and type of rooms, square feet of living space and whether or not a property has hardwood floors, a garage, kitchen upgrades, a fireplace, a pool, central air, etc. and
Terms and conditions of sale, such as if a property’s seller was under duress or if a property was sold between relatives (at a discounted price).

The market value estimate of the subject property will fall within the range formed by the adjusted sales prices of the comparables. Since some of the adjustments made to the sales prices of the comparables will be more subjective than others, weighted consideration is typically given to those comparables that had the least amount of adjustment.

Method 2 – Cost Approach

Toskana

Toskana

The cost approach can be used to estimate the value of properties that have been improved by one or more buildings. This method involves separate estimates of value for the building(s) and the land, taking into consideration depreciation. The estimates are added together to calculate the value for the entire improved property. The cost approach makes the assumption that a reasonable buyer would not pay more for an existing improved property than it would cost to buy a comparable lot and construct a building that is comparable in terms of desirability and usefulness. This approach is useful when the property being appraised is a type of property that is not frequently sold and is not an income-producing property. Examples include schools, churches, hospitals and government buildings.

Building Costs
Building costs can be estimated in several ways, including the square-foot method where the cost per square foot of a recently built comparable is multiplied by the number of square feet in the subject building; the unit-in-place method where costs are estimated based on the construction cost per unit of measure of the individual building components, including labor and materials and the quantity-survey method which estimates the quantities of raw materials that will be needed to replace the subject building, along with the current price of the materials and associated installation costs.

imageDepreciation
For appraisal purposes, depreciation refers to any condition that negatively affects the value of an improvement to real property, and takes into consideration:

Physical deterioration, including curable deterioration, such as painting and roof replacement and incurable deterioration, such as structural problems;
Functional obsolescence, which refers to physical or design features that are no longer considered desirable by property owners, such as low ceilings, outdated fixtures or homes with four bedrooms but only one bath and
Economic obsolescence, caused by factors that are external to the property, such as being located close to a noisy airport or polluting factory.

The cost approach for real estate valuation involves five basic steps:

Estimate the value of the land as if it were vacant and available to be put to its highest and best use, using the sales comparison approach since land cannot be depreciated.
Estimate the current cost of constructing the building(s) and site improvements.
Estimate the amount of depreciation of the improvements resulting from deterioration, functional obsolescence or economic obsolescence.
Deduct the depreciation from the estimated construction costs.
Add the estimated value of the land to the depreciated cost of the building(s) and site improvements to determine the total property value.
Method 3 – Income Capitalization Approach
The income approach is the third method of real estate valuation, and is based on the relationship between the rate of return an investor requires and the net income that a property produces. It is used to estimate the value of income-producing properties such as apartment complexes, office buildings and shopping centers. Appraisals using the income capitalization approach can be fairly straightforward when the subject property can be expected to have a future income, and when its expenses are predictable and steady.

London

London

Direct Capitalization
Appraisers will perform the following steps when using the direct capitalization approach:

Estimate the annual potential gross income;
Take into consideration vacancy and rent collection losses to determine the effective gross income;
Deduct annual operating expenses to calculate the annual net operating income;
Estimate the price that a typical investor would pay for the income produced by the particular type and class of property. This is accomplished by estimating the rate of return, or capitalization rate and
Apply the capitalization rate to the property’s annual net operating income to form an estimate of the property’s value.
Gross Income Multipliers
The gross income multiplier (GIM) method can be used to appraise other properties that are typically not purchased as income properties but that could be rented, such as one- and two-family homes. The GRM method relates the sales price of a property to its expected rental income. For residential properties, the gross monthly income is typically used; for commercial and industrial properties, the gross annual income would be used. The gross income multiplier method can be calculated as follows:

Kitzbühel

Kitzbühel

Sales Price / Rental Income = Gross Income Multiplier

Recent sales and rental data from at least three similar properties can be used to establish an accurate GIM. The GIM can then be applied to the estimated fair market rental of the subject property to determine its market value, which can be calculated as follows:

Rental Income X GIM = Estimated Market Value

Conclusion
Accurate real estate valuation is important to mortgage lenders, investors, insurers and buyers and sellers of real property. While appraisals are generally performed by skilled professionals, anyone involved in a real transaction can benefit from gaining a basic understanding of the different methods of real estate valuation.

Euronext. New Single Stock Futures

imageEuronext launches new Single Stock Futures
Launch expands single stock offering, delivering increased user choice and significant efficiencies

Amsterdam, Brussels, Lisbon and Paris – 27th January 2014 – Euronext, a wholly owned subsidiary of IntercontinentalExchange Group (NYSE: ICE), today announced the launch of an enlarged suite of Single Stock Futures on a range of its most liquid Euronext listed stocks. The launch enhances the existing offering of individual equity options, index futures and options.

This initiative will offer market participants a broader choice of marketplaces for Single Stock futures and will provide the trading community with significant efficiencies through the combination of Euronext’s state-of-the-art trading engine UTP, and clearing of resulting trades through LCH Clearnet S.A., the leading European Central Counterparty. It is envisaged that the initial offer of 86 Single Stock Futures will be expanded over time to meet growing client demand for these products.

European Court Experts presents market news

European Court Experts presents market news

Lee Hodgkinson, Head of Euronext’s Markets and Global Sales teams said, “This is the first of several new growth initiatives we are rolling out across the Euronext equity derivatives sector, to broaden the range of products we offer to our diverse client base. We are pleased to be able to provide our clients access to this extended range of single stock futures and to deliver increased choice and the flexibility of our wholesale services. Clearing and capital efficiencies are becoming increasingly important for our clients and the ability to clear Single Stock futures in the same Clearing House as the domestic equity option contracts will provide significant benefits for them.”

Euronext first exchange to start ETF NAV Trading
Amsterdam, Brussels, Lisbon, Paris – 10 March 2014 – Euronext, a wholly owned subsidiary of IntercontinentalExchange Group (NYSE: ICE), today announced that it is the first exchange to trade ETFs on the NAV Trading Facility. This initiative will open up the ETF market to a broader investor base by offering a regulated on-exchange forward pricing solution for order execution at Net Asset Value (NAV). ABN Amro Basic Funds N.V. is the first firm to benefit from the platform by launching its first ETFs— AABF ETF ES50® and AABF ETF AEX® on February 6th 2014.

imageThe NAV Trading Facility is regulated, transparent and efficient and provides investors with greater accessibility and a simpler process for NAV trading, thanks to the electronic management of order entry, accumulation, execution, clearing and settlement. All orders sent to the exchange are executed once a day at a price based on NAV. All market data related to trades conducted on the NAV Trading Facility is made available to data vendors, financial institutions, and private and institutional investors thereby, contributing to transparency of the overall post-trade activity.

For ETF issuers such as ABN Amro, the NAV Trading Facility assists asset gathering by offering a simple, efficient and secure solution for investors to access ETFs, without having to manage intra-day trading positions and the risk this involves. Thanks to the simpler method of investing, the facility also creates the conditions for a number of saving plans across Europe to include ETFs in their product selection, opening a completely new avenue of growth for ETFs in Europe.

imagePedro Fernandes, Head of European Exchange Traded Products for Euronext, said: “We are very proud to be the first exchange to deliver a solution for ETF trading at NAV. The NAV Trading Facility complements intra-day/on-book trading and facilitates further usage of ETFs by investors, thereby supporting the overall development of ETFs in Europe. This initiative demonstrates Euronext’s commitment to understanding the needs of the ETF industry and working with the community to develop new, innovative solutions.”

Bart Mantje, director ABN AMRO Investment Management, said: “The ETF NAV Trading Facility of Euronext is a big step forward in facilitating the execution of orders for investors, who see the added value of our BASIC ETFs in their investment portfolio. Not every investor is the same, today we offer them the choice to place their orders in the orderbook with continuous liquidity or via the NAV Trading Facility against the end of day NAV. We are very proud to offer this service as the first ETF provider in the market, together with Euronext.”

The NAV Trading Facility is available, in addition to trading via the Central Order Book, for all Euronext-listed open-end funds, including ETFs. It was designed in close consultation with the Euronext College of Regulators and the fund industry. This competitive market model, the only one of its kind, aligned with the recent ESMA’s guidelines for ETFs.

Wall Street News

Market Flash: Market Up
From The Trading Floor: Stocks are trading well into the green this morning, poised for a weekly gain ahead of some select index rebalancing and a quad witch expiration that is expected to be large

Wall Street Impressions presented by European Court Experts

Wall Street Impressions presented by European Court Experts

Fitch has raised the U.S.’s outlook to „stable“ while affirming the country’s AAA rating, citing the suspension of the debt limit last month and strong fiscal consolidation as reasons for the move.
29 of 30 Banks passed the most recent stress tests with Zions Bancorp falling a bit short
Nike’s FQ3 earnings beat consensus as the company enjoyed rising sales in China and Western Europe, while it also said orders have soared ahead of this summer’s soccer World Cup. Guidance has them trading down this morning.
The cost of implementing the Volcker Rule could vary from $413M to $4.3B for banks supervised by the Office of the Comptroller of the Currency, an OCC study calculates, as the regulations force banks to sell restricted investments at a loss.
Today is a quad witch expiration day which is the simultaneous expiration of futures on stock indexes and individual stocks, and stock and stock index options. It is also a quarterly rebalance on some S&P and Nasdaq indexes
Russia’s Micex stock index was down this morning after the U.S. threatened sanctions against vital parts of the country’s economy, including the financial-services, energy and mining sectors. The U.S. also imposed asset freezes and visa bans on senior Russian officials and businessmen close to Vladimir Putin.
Italian industrial orders jumped 4.8% on month in January after sinking 4.8% in December, while industrial sales rose 1.2% vs -0.3%. The figures add to better-than-expected output in January and suggest that Italy’s fragile recovery may be taking hold.
Resistance today looks to be 1880 / 1883 with support at 1867 / 1870
Market Flash:Market Mixed / Positive
From The Trading Floor: Equities are trading mixed to positive this morning as the effects of Janet Yellen’s suggestion of a sooner-than-expected rate hike the prior session is measured against economic reports on employment and housing.

imageThe number of Americans filing applications for unemployment benefits last week increased by 5000 to 320,000
The Fed is due to release the results of its annual stress test on 30 banks today, with most expected to pass
Americans were most pessimistic on the outlook for the economy in March than at any time in the past 4 months
February home sales in the U.S. fell to a 4.60 million rate
The Index of Leading Indicators rose 0.5% in February, a sign the world’s largest economy will strengthen after the weather induced slowdown
Q2 Holdings priced 7.7 million shares at $13.00. The opening print was $16.25 on 1,584,231 shares.
Ukraine plans to pull its troops out of Crimea in what is effectively a de facto acceptance of Russia’s annexation of the province.
The State Council intends to accelerate construction projects and enact other measures to expand domestic demand and stabilize growth. The plan comes amid data which suggests that the economy is softening.
From a technical standpoint, resistance looks to be 1866 / 1869 with support at 1856 / 1859
Market Flash: Market Mixed
From The Trading Floor: Markets are trading in mixed territory this morning as traders are unwilling to make bets ahead of the FOMC rate decision and Janet Yellen’s first press conference at 2:00 today.

Mortgage Applications for the week ending March 14th fell -1.2%
Current account gap fell to $81.1 billion from 96.4 billion
The FOMC rate decision is at 2:00 today. With the Fed expected to taper some more and abandon its 6.5% unemployment threshold for considering rate hikes, punters are focusing on what would push the Fed to finally raise rates.
Japan’s trade deficit narrowed to ¥800.3B ($7.9B) in February from a record ¥2.79T in January but exceeded consensus of ¥590B. Import growth slowed to 9% from 25% while exports rose 9.9%. Japan has now experienced a record 20 consecutive trade deficits, and while the figure may have peaked, few economists expect the country to turn a surplus any time soon.
From a technical perspective, resistance is at the 1877 / 1880 level with support at 1863 / 1866

US Stock Market

European Court Experts News

European Court Experts News

Receding fears of further military action related to Russia’s annexation of Crimea helped benchmarks end in the green for the second straight day. The S&P 500 moved close to its record high following reports that Russia may not occupy other parts of Ukraine. The Nasdaq got a boost from the surge in technology stocks. Meanwhile, investors look forward to the conclusion of Federal Reserve’s two-day policy-setting meeting on Wednesday. Tuesday’s mixed economic data had little impact on the markets.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article

European Court Experts, Real Estate

European Court Experts, Real Estate

The Dow Jones Industrial Average (DJI) gained 0.6% to close Tuesday’s trading session at 16,336.19. The Standard & Poor (S&P 500) rose 0.7% to finish at 1,872.25. The tech-laden Nasdaq Composite Index went up 1.3% to 4,333.31. The fear-gauge CBOE Volatility Index (VIX) plunged 7.2% to settle at 14.52. Total volume on the New York Stock Exchange was 2.9 billion shares. Declining stocks were outnumbered by advancing stocks on the NYSE. For 23% stocks that declined, 75% advanced.

U.S. stocks rallied for the second day in a row after Russian President Vladimir Putin said that Russia didn’t want further partition of Ukraine. Last Sunday, the vote turned to be overwhelmingly in favor of citizens in Crimea wanting to be part of Russia.

On Tuesday, the tech-heavy Nasdaq Composite Index got a boost from the Technology sector. Key technology stocks such as Apple Inc. (NASDAQ: AAPL ), Google Inc. (NASDAQ: GOOG ), Microsoft Corporation (NASDAQ: MSFT ), Verizon Communications Inc. (NYSE: VZ ) and International Business Machines Corporation (NYSE: IBM ) increased 0.9%, 1.6%, 3.9%, 0.8% and 0.5%, respectively.

Investors also focused on the Federal Reserve’s two-day policy-setting meeting that will conclude on Wednesday. Federal Reserve Chairwoman Janet Yellen is expected to hold a press conference after the meeting. The Fed is expected to keep the key lending rates low and is also expected to taper its monthly asset purchase program.

On the economic front, mixed economic data didn’t have any significant impact on the markets. The US Bureau of Labor Statistics came out with consumer price data; wherein it reported Consumer Price Index for All Urban Consumers (CPI-U) had improved just 0.1% in February. The increase was in line with the consensus estimate. The rise in food prices by 0.4% and the rise in housing costs by 0.2% were cited to be the reasons behind the slight rise in consumer prices.

ECE Experts, International

ECE Experts, International

The U.S. Census Bureau and the Department of Housing and Urban Development reported a small drop in housing starts. According to the report, privately owned housing starts in February slipped 0.2% to a seasonally adjusted annual rate of 907,000. Consensus estimate was expecting housing starts to be at 913,000. However, single family housing starts advanced 0.3%.

The U.S. Census Bureau and the Department of Housing and Urban Development also reported that building permits gained 7.7% to a seasonally adjusted annual rate of 1,018,000. This was more than the consensus expectation of 960,000. Indication that construction work will increase once the weather warms up encouraged builders to file for permits to construct condominiums and rental apartment buildings.

Nine out of ten sectors of the S&P 500 ended in the green. The Health Care Select Sector SPDR (XLV) surged 1.1%. Major stocks from the sector such as Pfizer Inc. (NYSE: PFE ), Merck & Co. Inc. (NYSE: MRK ), Gilead Sciences Inc. (NASDAQ: GILD ), Amgen Inc. (NASDAQ: AMGN ) and Biogen Idec Inc. (NASDAQ: BIIB ) gained 1.6%, 0.2%, 3.1%, 2.9% and 1.8%, respectively.

Read more: http://www.nasdaq.com/article/stock-market-news-for-march-19-2014-market-news-cm336616#ixzz2wR1gKXgX