| | | Large-cap indices close higher despite more bad data
16-Apr-20 16:20 ET
Dow +33.33 at 23537.68, Nasdaq +139.19 at 8532.37, S&P +16.19 at 2799.55
briefing.com
[BRIEFING.COM] The stock market closed mixed on Thursday, as investors responded to another round of weak economic data by continuing to buy shares of technology companies while avoiding distressed sectors like financials and energy. The Nasdaq Composite rose 1.7%, while the S&P 500 (+0.6%) and Dow Jones Industrial Average (+0.1%) posted smaller gains. The Russell 2000 declined 0.5%.
Briefly, weekly jobless claims totaled 5.245 million (Briefing.com consensus 5.000 million), down 1.37 million from the prior week. Housing starts for March declined 22.3% m/m while building permits fell 6.8% m/m. The Philadelphia Fed Index for April plunged 43.9 points to -56.6 (Briefing.com consensus -25.0) for its lowest reading since July 1980.
The data was ugly like yesterday's, but unlike yesterday the stock market was more accepting of the data amid a tapering shock value. Regarding the economic outlook, investors were reminded today that the road ahead may not be as smooth as had hoped after New York extended its economic restrictions until May 15. The White House is expected to release a "flexible" guideline today for states to consider.
This viewpoint didn't dampen risk sentiment, but instead led investors into stocks that have outperformed this year: large-cap technology names like Amazon (AMZN 2408.19, +100.51, +4.4%), Microsoft (MSFT 177.04, +5.16, +3.0%), and many of the semiconductor stocks. The latter drew support from encouraging quarterly results and guidance from Taiwan Semi (TSM 52.40, +2.74, +5.5%).
These gains contributed the outperformance of the S&P 500 consumer discretionary (+1.9%) and information technology (+1.2%) sectors. The health care sector (+2.2%), though, advanced the most after Abbott Labs (ABT 96.00, +5.06, +5.6%) was the latest health care company to beat earnings estimates.
Interestingly, declining issues outpaced advancing issues in both the Nasdaq and NYSE despite the positive indication in the major indices. Laggards were found in areas that have underperformed this year, specifically the energy (-4.0%), financials (-1.7%), and industrials (-0.8%) sectors.
The industrials space was pressured by Boeing (BA 134.24, -11.74, -8.0%) and airline stocks after United Airlines (UAL 28.21, -3.65, -11.5%) provided shareholders a discouraging update. The company said it expects travel demand to remain suppressed for the remainder of 2020 and likely into next year, augmenting worries about a prolonged economic recovery.
U.S. Treasuries continued to show relative strength, pushing yields lower across the curve. The 2-yr yield declined one basis point to 0.19%, and the 10-yr yield declined three basis points to 0.61%. The U.S. Dollar Index increased 0.6% to 100.06. WTI crude declined 0.3% to $19.89/bbl.
Reviewing Thursday's economic data:
- Initial claims for the week ending April 11 were "only" 5.245 million (Briefing.com consensus 5.000 million), down 1.37 million from the prior week. Continuing claims for the week ending April 4, meanwhile, were 11.976 million, up 4.53 million from the prior week.
- The key takeaway from the report is that the labor market is wrecked right now; and gainful employment with gainful income, which is missing for so many, is what is needed to drive an economy that relies heavily on consumer spending.
- Housing starts declined 22.3% m/m in March to a seasonally adjusted annual rate of 1.216 million (Briefing.com consensus 1.300 million). Building permits were down 6.8% m/m to a seasonally adjusted annual rate of 1.353 million (Briefing.com consensus 1.297 million).
- Building permits were better than expected because of increases for multi-unit dwellings, yet the key takeaway for this leading indicator is that permits for single-unit housing were down between 6.4% and 20.2% across all regions.
- The Philadelphia Fed Index for April plunged to -56.6 (lowest since July 1980) from -12.7 in March.
Looking ahead, investors will receive the Conference Board's Leading Economic Index for March on Friday.
- Nasdaq Composite -4.9% YTD
- S&P 500 -13.4% YTD
- Dow Jones Industrial Average -17.5% YTD
- Russell 2000 -29.4% YTD
Market Snapshot
| Dow | 23537.68 | +33.33 | (0.14%) | | Nasdaq | 8532.37 | +139.19 | (1.66%) | | SP 500 | 2799.55 | +16.19 | (0.58%) | | 10-yr Note | +3/32 | 0.610 |
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| | NYSE | Adv 1084 | Dec 1803 | Vol 1.1 bln | | Nasdaq | Adv 1438 | Dec 1791 | Vol 3.9 bln |
Industry Watch
| Strong: Consumer Discretionary, Information Technology, Health Care |
| | Weak: Energy, Financials, Industrials |
Moving the Market
-- Nasdaq outperforms amid strength in technology stocks; S&P 500, Dow inch higher
-- Jobless claims total 5.245 million (Briefing.com consensus 5.0 million); Housing starts for March declined 22.3% m/m while building permits fell 6.8% m/m.
-- Continued weakness in financial and energy sectors
-- Declining issues outpace advancing issues in Nasdaq and NYSE
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WTI crude posts slight decline
16-Apr-20 15:30 ET
Dow -38.28 at 23466.07, Nasdaq +89.70 at 8482.88, S&P +8.47 at 2791.83
[BRIEFING.COM] The S&P 500 continues to trade above its flat line with a 0.3% gain, while the Russell 2000 lags with a 1.7% decline.
One last look at the S&P 500 sectors shows health care (+1.9%) and consumer discretionary (+1.3%) remaining atop the standings, while energy (-3.4%) and financials (-2.0%) continue to underperform with noticeable losses.
WTI crude futures settled down $0.06 (-0.3%) to $19.89/bbl. |
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