| | | Stocks close lower, trim April gains
30-Apr-20 16:15 ET
Dow -288.14 at 24345.72, Nasdaq -25.16 at 8889.56, S&P -27.08 at 2912.43
briefing.com
[BRIEFING.COM] The S&P 500 declined 0.9% on Thursday to end a strong April with some light profit-taking activity. Mega-cap technology stocks outperformed and limited the Nasdaq Composite's decline to 0.3%, while the Dow Jones Industrial Average declined 1.2% and the Russell 2000 declined 3.7%.
Economic data continued to reveal the damage caused by the coronavirus, specifically a 7.5% plunge in personal spending for March (Briefing.com consensus -3.6%) and 3.839 million initial jobless claims (Briefing.com consensus 3.050 million) filed for the week ending April 25. The positive spin regarding the jobs data was that it marked a 603,000 decline from the prior week.
The market remained unperturbed by the data, having rallied remarkably in the face of bad data since March 23, but it appeared due for some sort of breather. The market traded lower all day, but it did close off session lows.
The S&P 500 materials (-3.0%) and financials (-2.7%) sectors lagged, while the consumer discretionary (+0.4%) and communication services (+0.02%) sectors eked out small gains.
Notably, mega-cap technology stocks remained in favor, with Amazon (AMZN 2474.00, +101.29, +4.3%) and Apple (AAPL 293.95, +6.22, +2.2%) rallying in front of their earnings reports after the close. Facebook (FB 204.35, +10.16, +5.2%) and Microsoft (MSFT 179.13, +1.70, +1.0%) also finished higher following their earnings.
Conversely, Tesla (TSLA 781.88, -18.63, -2.3%), McDonald's (MCD 187.56, -0.26, -0.1%), Comcast (CMCSA 37.63, -1.37, -3.5%), Twitter (TWTR 28.68, -2.41, -7.8%), and Dow, Inc (DOW 36.69, -0.78, -2.1%) were among the many companies that ended the session lower after reporting earnings results.
Separately, central banks remained committed to supporting the financial system. The Fed expanded the scope and eligibility for its Main Street Lending Program, and the ECB said it will conduct net asset purchases under its EUR750 billion pandemic emergency purchase program through at least the end of the year.
U.S. Treasuries ended the session near their flat lines. The 2-yr yield and the 10-yr yield declined one basis point each to 0.18% and 0.62%, respectively. The U.S. Dollar Index declined 0.6% to 99.01. WTI crude rose another 22.8%, or $3.45, to $18.58/bbl.
Reviewing Thursday's economic data:
- Initial jobless claims decreased by 603,000 to 3.839 million (Briefing.com consensus 3.050 million) for the week ending April 25. Continuing jobless claims totaled 17.992 million for the week ending April 18, which is the highest number ever for that series.
- Notwithstanding the deceleration in initial claims from the prior week, the key takeaway from the report is that it reflects a brutal employment situation, evidenced by a six-week total for initial claims that exceeds 30 million.
- Personal income declined 2.0% m/m in March (Briefing.com consensus -1.5%) while personal spending plunged 7.5% (Briefing.com consensus -3.6%). The PCE Price Index dropped 0.3% and the core PCE Price Index, which excludes food and energy, declined 0.1%.
- The key takeaway from the report is that it is a precursor to what will be much worse data for April, which will drive a much worse decline in GDP than the 4.8% annualized decline registered in the first quarter.
- The Q1 Employment Cost Index increased 0.8% (Briefing.com consensus 0.6%), seasonally adjusted, for the three-month period ending in March 2020 after increasing 0.7% for the three-month period ending December 2019. Wages and salaries, which account for about 70% of compensation costs, rose 0.9%, while benefit costs, which make up the remainder of compensation costs, increased 0.4%.
- The key takeaway from the report is that the reported increase in employment costs matched peak rates from 2017 and 2018. The 12-month percent change in wages and salaries of private industry workers (+3.3%) exceeded its prior peak from 2019.
- The Chicago PMI for April declined to 35.4 (Briefing.com consensus 39.2) from 47.8 in March.
Looking ahead, investors will receive the ISM Manufacturing Index for April, Construction Spending for March, and auto and truck sales for April on Friday.
- Nasdaq Composite -0.9% YTD
- S&P 500 -9.9% YTD
- Dow Jones Industrial Average -14.7% YTD
- Russell 2000 -21.5% YTD
Market Snapshot
| Dow | 24345.72 | -288.14 | (-1.17%) | | Nasdaq | 8889.56 | -25.16 | (-0.28%) | | SP 500 | 2912.43 | -27.08 | (-0.92%) | | 10-yr Note | -1/32 | 0.637 |
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| | NYSE | Adv 807 | Dec 2066 | Vol 1.5 bln | | Nasdaq | Adv 905 | Dec 2355 | Vol 4.3 bln |
Industry Watch
| Strong: Consumer Discretionary, Communication Services |
| | Weak: Materials, Financials, Energy |
Moving the Market
-- Stock market closes lower, trims April advance
-- Nasdaq outperforms amid continued strength in mega-cap technology stocks
-- Initial jobless claims decreased by 603,000 to 3.839 million (Briefing.com consensus 3.050 million); March personal spending drops 7.5% (Briefing.com consensus -3.6%)
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WTI crude rises another 23%
30-Apr-20 15:25 ET
Dow -243.89 at 24389.97, Nasdaq -26.68 at 8888.04, S&P -24.80 at 2914.71
[BRIEFING.COM] The S&P 500 is off session lows (-1.6%) with a current 0.8% decline.
One last look at the S&P 500 sectors shows materials (-2.6%) and financials (-2.4%) lagging the broader market, while the consumer discretionary sector (UNCH) trades flat.
WTI crude futures settled up $3.45 (+22.8%) to $18.58/bbl. |
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