S&P 500, Nasdaq hit new highs in relief rally
08-Jan-20 16:15 ET
Dow +161.41 at 28745.00, Nasdaq +60.66 at 9129.27, S&P +15.87 at 3253.05
briefing.com
[BRIEFING.COM] The S&P 500 (+0.5%) set a new intraday high on Wednesday, as investors were relieved to hear that the situation in Iran may not escalate militarily beyond the actions taken by Iran last night. The Nasdaq Composite (+0.7%) closed at a record high, the Dow Jones Industrial Average gained 0.6%, and the Russell 2000 gained 0.3%. Stocks did fade into the close, though.
Iran fired more than a dozen ballistic missiles against U.S. and coalition forces in Iraq, which immediately sent equity futures down more than 1.5%. The reaction was short-lived upon details that it resulted in no American casualties and Tehran said it did not seek escalation or war.
As stocks wavered with modest gains after the open, President Trump told the nation in a press conference that he will be imposing additional sanctions on Iran, implicating that economic countermeasures will be favored over military ones. A mostly broad-based rally ensued, with nine of the 11 S&P 500 sectors finishing with gains.
The information technology (+1.0%) and communication services (+0.7%) sectors outperformed, while the energy sector (-1.7%) fell behind amid a retreat in oil prices ($59.62, -3.06, -4.9%). WTI crude futures dropped below $60/bbl following bearish inventory data and receding concerns about production disruptions.
Stock laggards included Boeing (BA 331.37, -5.91, -1.8%) after a 737-800 jetliner crashed shortly after takeoff in Tehran, killing all 176 passengers on board, and Walgreens Boots Alliance (WBA 55.83, -3.46, -5.8%) after it missed earnings estimates.
Positive corporate news came out of Macy's (M 18.10, +0.43, +2.4%), which reported better than feared holiday sales, and Constellation Brands (STZ 190.29, +6.69, +3.6%), which beat top and bottom-line estimates.
Shares of GrubHub (GRUB 54.75, +6.12, +12.6%) climbed nearly 13% after The Wall Street Journal reported the company is pursuing strategic options, including a possible sale.
U.S. Treasuries declined alongside the advance in equities, driving yields higher across the curve. The 2-yr yield rose four basis points to 1.58%, and the 10-yr yield rose five basis points to 1.87%. The U.S. Dollar Index increased 0.3% to 97.30. Gold futures fell 0.9% to $1560.50/ozt.
Reviewing Wednesday's economic data, which included the ADP Employment Change Report for December and the Consumer Credit report for November:
- The ADP Employment Change Report showed an estimated 202,000 positions were added to private sector payrolls in December (Briefing.com consensus 155,000) on top of an upwardly revised 124,000 (from 67,000) in November.
- Consumer credit increased by $12.5 bln in November (Briefing.com consensus $17.5 bln) after increasing by $18.9 bln in October.
- The key takeaway from the report is that the November increase was driven entirely by nonrevolving credit.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report on Thursday.
- Nasdaq Composite +1.8% YTD
- S&P 500 +0.7% YTD
- Dow Jones Industrial Average +0.7% YTD
- Russell 2000 -0.3% YTD
Market Snapshot
| Dow | 28745.00 | +161.41 | (0.56%) | | Nasdaq | 9129.27 | +60.66 | (0.67%) | | SP 500 | 3253.05 | +15.87 | (0.49%) | | 10-yr Note | -26/32 | 1.869 |
|
| | NYSE | Adv 1630 | Dec 1189 | Vol 896.0 mln | | Nasdaq | Adv 1857 | Dec 1328 | Vol 2.4 bln |
Industry Watch
| Strong: Information Technology, Communication Services |
| | Weak: Energy, Utilities |
Moving the Market
-- S&P 500, Nasdaq set new highs in relief trade
-- Iran's retaliation caused no American casualties and President Trump implicated economic countermeasures over military ones
-- Relative weakness in energy stocks amid 5% drop in the price of oil
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WTI crude drops 5%
08-Jan-20 15:30 ET
Dow +277.04 at 28860.63, Nasdaq +99.58 at 9168.19, S&P +29.70 at 3266.88
[BRIEFING.COM] The S&P 500 is trading at session highs with a gain of 0.9%. The Russell 2000 is up 0.6%.
One last look at the S&P 500 sectors shows ten of the 11 sectors trading with gains. Information technology (+1.5%), communication services (+1.1%), health care (+1.1%), and financials (+1.0%) are setting the pace, while the energy sector (-1.4%) remains the lone sector trading lower.
WTI crude dropped $3.06 (-4.9%) to $59.62/bbl on receding concerns about disruptions to production and bearish inventory data. |
