S&P 500 and Nasdaq Composite Set All-Time Closing Highs
23-Apr-19 16:15 ET
Dow +145.34 at 26656.39, Nasdaq +105.56 at 8120.81, S&P +25.71 at 2933.68
briefing.com
[BRIEFING.COM] The S&P 500 (+0.9%) and the Nasdaq Composite (+1.3%) both set all-time closing highs on Tuesday in a broad-based advance. Investor sentiment was buoyed by a batch of positive earnings reports from widely-held companies and positive economic data.
The Dow Jones Industrial Average gained 0.6%, and the Russell 2000 gained 1.6%.
From the onset, it didn't look like Tuesday would be a record-setting day despite the earnings beats from a diverse set of companies that included United Technologies (UTX 140.02, +3.11, +2.3%), Coca-Cola (KO 48.21, +0.81, +1.7%), Verizon (VZ 57.15, -1.22, -2.1%), Procter & Gamble (PG 103.16, -2.85, -2.7%), Lockheed Martin (LMT 331.10, +17.84, +5.7%), Twitter (TWTR 39.77, +5.38, +15.6%), and Hasbro (HAS 100.65, +12.54, +14.2%).
Overall market reaction was muted heading into the open. Buying interest quickly picked up, though, and momentum accelerated soon after the release of the New Home Sales report for March at 10:00 a.m. ET.
Today's advance was broad-based, led by the health care (+1.6%), consumer discretionary (+1.2%), and information technology (+1.1%) sectors. The lone exception was the consumer staples sector (-0.1%), which was held back by the underperformance of Procter & Gamble.
New home sales in March increased 4.5% m/m to a seasonally adjusted annual rate of 692,000 (Briefing.com consensus 646,000), which was the strongest pace since November 2017. Lower prices and lower mortgage rates contributed to the pickup in sales activity.
Solid data out of the housing sector maintained an upbeat outlook for the U.S. economy, which should continue to bode well for corporate earnings prospects. A fear of missing out on further gains helped lift the S&P 500 above its prior record close by noon, where it would trade for the rest of the day.
Separately, Walgreens Boots Alliance (WBA 53.22, -0.88, -1.6%) announced it will increase its minimum buying age for tobacco products to 21 on Sept. 1, 2019. Kohl's (KSS 75.48, +8.03, +11.9%) announced it will accept Amazon (AMZN 1923.77, +36.46, +1.9%) returns in all of its stores, starting in July. Qualcomm (QCOM 86.72, +4.75, +5.8%) was upgraded to Overweight from Equal-Weight at Morgan Stanley with a price target of $95.
U.S. Treasury yields remained lower on Tuesday. The 2-yr yield declined four basis points to 2.35%, and the 10-yr yield declined two basis points to 2.57%. The U.S. Dollar Index increased 0.3% to 97.59. WTI crude rose 1.1% to $66.33/bbl, nearing a six-month high.
Reviewing Tuesday's economic data, which included New Home Sales for March and the FHFA Housing Price Index for February:
- New home sales in March increased 4.5% m/m to a seasonally adjusted annual rate of 692,000 (Briefing.com consensus 646,000), which was the strongest pace since November 2017. Sales were up 3.0% yr/yr.
- The key takeaway from the report is that the solid sales activity was helped by a 9.8% decline in the median sales price and lower mortgage rates, which goes to show the pent-up potential for sales activity if the combination of lower prices and lower mortgage rates persists.
- The FHFA Housing Price Index for February increased 0.3%, down from an unrevised January reading of 0.6%.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
- Nasdaq Composite +22.4% YTD
- Russell 2000 +17.5% YTD
- S&P 500 +17.0% YTD
- Dow Jones Industrial Average +14.3% YTD
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