Top 3 Reasons Markets Rallied Despite Japan’s Tsunami

Markets closed up on Wall Street: DJI +0.5% SP500 +0.71% Nasdaq +0.54% Gold +0.66%.

It was an unusual day in the markets. The earthquake and tsunami in Japan (NYSE:EWJ) had investors worried at the opening bell, but markets broke into positive territory in the late morning and rallied the remainder of the trading day.

Today’s markets rallied because:

1) Talking heads speculated that Japan’s (NYSE:EWJ) loss could be a benefit to the US economy (NYSE:SPY). Now that Japan has to deal with a major disaster cleanup and the temporary shuttering of factories, economists are speculating multinational corporations will scramble to substitute Japanese products with those of other countries — including the US. You would think yesterday’s record Federal Budget Deficit would have people running for canned food, Gold (NYSE:GLD), and guns, but apparently no one minds the insanity in this Chart of the Day.

2) Defensive sectors did well today. As Saudi Arabia and Japan duopolize headlines, investors crammed into defensive sectors such as Utilities (NYSE:XLU), Consumer Staples (NYSE:XLP), and Healthcare (NYSE:XLV). Also doing well were oil services (NYSE:OIH) companies such as Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL), as well as technology companies National Semiconductor Corporation (NYSE:NSM) and (NASDAQ:BIDU). Don’t Miss: 3 Defensive ETFs to Hedge a Market Pullback.

3) US Retail Sales jumped the most in four months. Consumers bought 1% more than they did after January was revised up 0.7% rise. We also saw a “go private” bid for discount retailer 99 Cents Only Stores (NYSE:NDN). Other retailers (NYSE:XRT) that were hot today include AnnTaylor Stores (NYSE:ANN), The Gap (NYSE:GPS), and Abercrombie & Fitch (NYSE:ANF). However, see why Carl Icahn’s Hedge Fund Disaster Spells Selling for These Stocks.

Now that you’re in the know, time to relax for the weekend and send our well wishes to Japan.