Negative day, except for the mega-caps and the Nasdaq
27-Oct-20 16:15 ET
Dow -222.19 at 27463.13, Nasdaq +72.41 at 11431.28, S&P -10.29 at 3390.68
briefing.com
[BRIEFING.COM] The S&P 500 declined 0.3% on Tuesday in a tight-ranged session. The mega-cap stocks had a strong outing that fueled the outperformance of the Nasdaq Composite (+0.6%), while many of the value/cyclical stocks dragged on the Dow Jones Industrial Average (-0.8%) and Russell 2000 (-0.9%).
New macro developments were lacking, and earnings reactions were generally disappointing, leaving investors grappling with the same growth/coronavirus concerns that were attributed to yesterday's retreat. The key difference today was that these concerns were manifested in a more constructive way: decent gains in the mega-caps.
Accordingly, the S&P 500 consumer discretionary (+0.6%), communication services (+0.6%), and information technology (+0.5%) sectors finished in positive territory. Microsoft (MSFT 213.25, +3.17, +1.5%) provided support for the tech sector ahead of its earnings report after the close.
No other sector within the benchmark index closed higher, and the cyclical industrials (-2.2%), financials (-1.9%), energy (-1.4%), and materials (-1.0%) sectors declined at least 1.0%.
Caterpillar (CAT 157.91, -5.29, -3.2%) and 3M (MMM 161.04, -5.12, -3.1%) were notable drags on the industrials sector after the companies refrained from providing guidance. Health care companies Pfizer (PFE 37.42, -0.50, -1.3%), Merck (MRK 77.99, -0.85, -1.1%), and Eli Lilly (LLY 131.90, -23.29, -5.6%) issued in-line/upside guidance, but shares still closed lower.
Separately, Xilinx (XLNX 124.35, +9.80, +8.6%) agreed to be acquired by Adv. Micro Devices (AMD 78.88, -3.35, -4.1%) in an all-stock transaction valued at $35 billion. Exact Sciences (EXAS 131.12, +24.22, +23.0%) said it will acquire Thrive for up to $2.15 billion in cash and stock.
U.S. Treasuries padded recent gains, pushing yields lower across the curve. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined two basis points to 0.78%. The U.S. Dollar Index decreased 0.1% to 92.96. WTI crude futures rebounded 2.5%, or $0.97, to $39.55/bbl.
Reviewing Tuesday's economic data:
- Total durable orders increased 1.9% m/m in September (Briefing.com consensus +0.7%) following a downwardly revised 0.4% increase (from 0.5%) in August. Excluding transportation, durable orders rose 0.8% m/m (Briefing.com consensus +0.4%) on top of an upwardly revised 1.0% increase (from 0.7%) in August.
- The key takeaway from the report is that business spending continued to rebound, evidenced by the fifth consecutive increase in nondefense capital goods orders, excluding aircraft, which jumped 1.0% after increasing 2.1% in August.
- The Conference Board's Consumer Confidence Index slipped to 100.9 in October (Briefing.com consensus 101.9) from a downwardly revised 101.3 (from 101.8) in September.
- The key takeaway from the report is that consumers are feeling less confident about the short-term outlook, as the rise in coronavirus cases and still-high unemployment levels have contributed to concerns about job prospects.
- The FHFA Housing Price Index for October increased 1.5% (Briefing.com consensus 0.8%).
- The S&P Case-Shiller Home Price Index for August increased 5.2% (Briefing.com consensus 3.8%).
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
- Nasdaq Composite +27.4% YTD
- S&P 500 +5.0% YTD
- Dow Jones Industrial Average -3.8% YTD
- Russell 2000 -4.7% YTD
Market Snapshot
| Dow | 27463.13 | -222.19 | (-0.80%) | | Nasdaq | 11431.28 | +72.41 | (0.64%) | | SP 500 | 3390.68 | -10.29 | (-0.30%) | | 10-yr Note | +3/32 | 0.777 |
|
| | NYSE | Adv 915 | Dec 2058 | Vol 795.7 mln | | Nasdaq | Adv 1328 | Dec 2099 | Vol 3.0 bln |
Industry Watch
| Strong: Consumer Discretionary, Information Technology, Communication Services |
| | Weak: Energy, Industrials, Financials, Materials, Real Estate |
Moving the Market
-- Growth concerns persisted
-- Earnings reactions were generally disappointing
-- Mega-cap stocks outperformed at expense of the cyclical stocks
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WTI crude rebounds, but not the energy sector
27-Oct-20 15:25 ET
Dow -159.91 at 27525.41, Nasdaq +67.42 at 11426.29, S&P -5.13 at 3395.84
[BRIEFING.COM] The S&P 500 is trading just below its flat line, while the Nasdaq is trading higher by 0.6%.
One last look at the S&P 500 sectors information technology (+0.6%), consumer discretionary (+0.4%), and communication services (+0.4%) still trading higher and supporting the market; conversely, the industrials (-1.9%), financials (-1.5%), and materials (-0.7%) sectors lag.
WTI crude futures settled higher by 2.5%, or $0.97, to $39.55/bbl. Today was a solid rebound effort after prices fell more than 3.0% yesterday, but that hasn't translated to a higher energy sector (-0.7%). |
