| | | Stocks eke out gains in uneven session
24-Sep-20 16:15 ET
Dow +52.31 at 26805.44, Nasdaq +39.28 at 10672.29, S&P +9.67 at 3246.59
briefing.com
[BRIEFING.COM] The stock market oscillated between gains and losses on Thursday, with the S&P 500 ultimately closing higher by 0.3%. The Nasdaq Composite increased 0.4%, the Dow Jones Industrial Average increased 0.2%, and the Russell 2000 finished flat.
The S&P 500 started the day lower by 0.9%, extending the month's pullback and briefly turning negative for the year, before the dip buyers stepped in. By the afternoon, the benchmark index was up 1.2% but sellers regained control on no specific news. The inability to sustain another rebound was disappointing for the bulls but not necessarily bearish.
Ten of the 11 S&P 500 sectors finished in positive territory, even as declining issues edged out advancing issues at both the NYSE and Nasdaq. The utilities (+1.2%), consumer staples (+0.8%), and information technology (+0.6%) sectors outperformed in a defensive-minded trade that excluded the health care sector (-0.5%).
Generally, investors remained nervous about election volatility, the prospects for another fiscal relief bill, the trajectory of the coronavirus, and U.S.-China relations. On stimulus, House Speaker Pelosi (D-CA) will reportedly introduce a $2.4 trillion relief bill, but it's unlikely to have the support of Republicans.
Regarding the economy, the labor market remained in poor standing as weekly jobless claims increased by 4,000 to 870,000 (Briefing.com consensus 825,000). New home sales, however, rose 4.8% m/m in August to a seasonally adjusted annual rate of 1.011 million (Briefing.com consensus 875,000) -- its highest rate since November 2006.
Interestingly, a pair of analysts turned bullish on some battered financial stocks. Goldman Sachs (GS 195.11, +8.99, +4.8%) was upgraded to Buy from Hold at UBS, and Wells Fargo (WFC 23.32, +0.49, +2.2%) was added to the Fresh Pick List at Robert W. Baird.
U.S. Treasuries traded within another narrow range and closed little changed. The 2-yr yield was unchanged at 0.13%, and the 10-yr yield decreased one basis point to 0.67%. The U.S. Dollar Index declined 0.1% to 94.33. WTI crude futures gained 0.9%, or $0.37, to $40.31/bbl.
Reviewing Thursday's economic data:
- Jobless claims for the week ending September 19 increased by 4,000 to 870,000 (Briefing.com consensus 825,000) while continuing claims for the week ending September 12 decreased by 167,000 to 12.580 million.
- The key takeaway from the report is that initial jobless claims remain at stunningly high levels that point to the ongoing challenges U.S. businesses face getting back on a pre-pandemic track. In the same period a year ago, initial jobless claims were 215,000.
- New home sales in August did something they haven't done since November 2006 -- exceed a seasonally adjusted annual rate of 1.0 million. Specifically, they rose 4.8% m/m to 1.011 million (Briefing.com consensus 875,000) and were up 43.2% yr/yr.
- The key takeaway from the report is that it reflects strong demand for new homes at more affordable price points, as the South region, which is the largest homebuilding region and features lower average prices, saw sales increase 13.4% m/m.
Looking ahead, investors will receive Durable Goods Orders for August on Friday.
- Nasdaq Composite +18.9% YTD
- S&P 500 +0.5% YTD
- Dow Jones Industrial Average -6.0% YTD
- Russell 2000 -13.0% YTD
Market Snapshot
| Dow | 26805.44 | +52.31 | (0.20%) | | Nasdaq | 10672.29 | +39.28 | (0.37%) | | SP 500 | 3246.59 | +9.67 | (0.30%) | | 10-yr Note | +1/32 | 0.664 |
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| | NYSE | Adv 1439 | Dec 1513 | Vol 928.0 mln | | Nasdaq | Adv 1356 | Dec 1928 | Vol 4.0 bln |
Industry Watch
| Strong: Information Technology, Real Estate, Communication Services, Consumer Discretionary |
| | Weak: Energy, Health Care, Industrials |
Moving the Market
-- Stocks attempt a rebound
-- Mega-caps and semiconductor stocks show relative strength
-- Weekly initial claims increased by 4,000 to 870,000 (Briefing.com consensus 825,000)
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