| | | S&P 500 Crosses 50-Day MA as Stocks Climb for Fifth Consecutive Session
15-Feb-18 16:30 ET
Dow +306.88 at 25200.37, Nasdaq +112.81 at 7256.42, S&P +32.57 at 2731.20
briefing.com
[BRIEFING.COM] Stocks cruised to their fifth consecutive victory on Thursday, pushing the S&P 500 above its 50-day simple moving average (2722.93) for the first time since last week's big sell off. The S&P 500 finished with a gain of 1.2%, while the Nasdaq Composite and the Dow Jones Industrial Average climbed 1.6% and 1.2%, respectively.
After a failed attempt to crack its 50-day simple moving average at the opening bell, the S&P 500 finally managed to break through in the early afternoon and continued climbing from there. The benchmark index approached the key technical level from the other side shortly before the closing bell, but, this time, it proved to be a level of support.
The major averages finished Thursday at their best marks of the day. At their lows, the S&P 500, the Nasdaq, and the Dow were down around 0.3% apiece.
Investors received a large batch of economic data on Thursday, highlighted by the Producer Price Index for January. The PPI reading came in as expected, showing a month-over-month increase of 0.4%, while the core PPI reading, which excludes food and energy, rose more than expected, jumping 0.4% (Briefing.com consensus +0.2%). The key takeaway from the report is that producer prices are rising, which will feed the Treasury market's concerns about a pass through to consumers.
U.S. Treasuries settled Thursday mostly higher, pulling the yield on the benchmark 10-yr Treasury note down from a four-year high; the 10-yr yield slipped two basis points to 2.89%. The 10-yr yield traded at around 2.94% in pre-market action, but began losing ground even before the release of the aforementioned economic data. Meanwhile, the 2-yr yield finished higher by one basis point at 2.18%, which is its highest level in nearly a decade.
On Wall Street, 10 of 11 S&P 500 sectors finished in positive territory with technology (+1.9%), industrials (+1.5%), consumer staples (+1.6%), utilities (+2.1%), and telecom services (+1.4%) leading the charge. The energy sector (-0.4%) was the lone laggard, even though WTI crude futures climbed 1.3% to $61.39 per barrel.
Within the tech space, Cisco Systems (CSCO 44.08, +1.99) rallied 4.7% to its best level in nearly 20 years after reporting better-than-expected profits for the previous quarter and raising its earnings and revenue guidance for the current quarter. Meanwhile, Apple (AAPL 172.99, +5.62) climbed 3.4%, crossing its 50-day simple moving average for the first time in three weeks.
Elsewhere, the U.S. Dollar Index, which measures the dollar against a basket of other currencies, returned to the three-year low it hit earlier this month, dropping 0.5% to 88.51. The greenback lost 0.4% against the euro (1.2497), 0.7% against the British pound (1.4091), and 0.8% against the Japanese yen (106.16).
Reviewing Thursday's big batch of economic data, which included the Producer Price Index for January, Industrial Production and Capacity Utilization for January, weekly Initial Claims, the Empire Manufacturing Survey for February, the Philadelphia Fed Survey for February, and the NAHB Housing Market Index for February:
- Producer prices rose 0.4% in January (Briefing.com consensus +0.4%) and core producer prices increased 0.4% (Briefing.com consensus +0.2%). Year-over-year, producer prices are up 2.7% and core producer prices have risen 2.2%.
- The key takeaway from the report is that producer prices are rising, which will feed the Treasury market's concerns about a pass through to consumers.
- Industrial Production decreased 0.1% in January (Briefing.com consensus +0.2%), while the December reading was revised to +0.4% (from +0.9%). Capacity Utilization ticked down to 77.5% (Briefing.com consensus 78.0%) from a revised reading of 77.7% in December (from 77.9%).
- The key takeaway from the report is that the downturn was driven entirely by mining output (-1.0%), although it is notable that manufacturing output was unchanged for the second consecutive month.
- The latest weekly initial jobless claims count totaled 230,000, while the Briefing.com consensus expected a reading of 227,000. Today's tally was above the revised prior week count of 223,000 (from 221,000). As for continuing claims, they rose to 1.942 million from a revised count of 1.927 million (from 1.923 million).
- The key takeaway from the report is that the low level of initial claims is a reflection of a tight labor market and a period of increased demand when employers are reluctant to cut staff.
- The Empire Manufacturing Survey for February declined to 13.1 (Briefing.com consensus 19.0) from the prior month's unrevised reading of 17.7.
- Manufacturing activity in the New York Fed region is still in expansion mode, but the key takeaway is that the prices paid index is at its highest level in nearly six years.
- The Philadelphia Fed Survey for February increased to 25.8 (Briefing.com consensus 22.0) from an unrevised 22.2 in January.
- The key takeaway from the report is that manufacturing activity in the Philadelphia Fed region has accelerated, with cost pressures being reported as more widespread.
- The NAHB Housing Market Index for February came in at 72 (Briefing.com consensus 73), unchanged from January.
On Friday, investors will receive another big batch of data, including Housing Starts (Briefing.com consensus 1240K) and Building Permits (Briefing.com consensus 1300K) for January, Import and Export Prices for January, and the preliminary reading of the University of Michigan Consumer Sentiment Index for February (Briefing.com consensus 95.5). The first four pieces of data will be released at 8:30 AM ET, while the Michigan Consumer Sentiment Index will cross the wires at 10:00 AM ET.
- Nasdaq Composite: +5.1% YTD
- S&P 500: +2.2% YTD
- Dow Jones Industrial Average: +2.0% YTD
- Russell 2000: +0.1% YTD
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