Daily Market Assessment

It's Still Good.

With the market off its best weekly percentage gain in four years, it wasn't surprising to see the stocks take a bit of a breather Monday. A surprise drop of 3.9% in new home sales rocked a market that had been pricing in more signs of stabilization within the troubled housing market. At 10:00 ET, the Commerce Dept. showed that new home sales unexpectedly fell in February to the lowest level in nearly seven years. More troubling was the fact that inventories rose to the highest level in 16 years. The data showed that housing is still in a correction and will remain a moderate drag on real GDP for several more quarters. Not surprising, Homebuilders (-1.8%), this year's biggest disappointment (-16.5%), ranked among today's worst performing S&P industry groups. However, new signs of weakness in the troubled housing sector exacerbated ongoing concerns of further impairment charges among mortgage lenders ? which in turn hurt Financials.

Oil broke $63 a barrel for the first time this year amid potential supply disruptions after the U.N. tightened sanctions against Iran. Oil prices eased marginally later in the day and offered support to a rally in the markets that reversed over half of the day?s losses.

Markets are poised to open on a downbeat note as the futures market trades below fair value. Even though monthly sentiment data don't really say much about the economic outlook and does not correlate well with short-term consumer spending trends, investors are anxiously awaiting the latest read on consumer confidence. The Conference Board's index for March will hit the wires at 10:00 ET and is expected to drop from a reading of 112.5 in February, the highest level in five-and-a-half years.

Summary: Short Term neutral, Long Term bullish.