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Market Snapshot
briefing.com
| Dow | 34312.46 | -81.52 | (-0.24%) | | Nasdaq | 13657.20 | -4.00 | (-0.03%) | | SP 500 | 4188.13 | -8.92 | (-0.21%) | | 10-yr Note | +4/32 | 1.557 |
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| | NYSE | Adv 1225 | Dec 2003 | Vol 895.2 mln | | Nasdaq | Adv 1500 | Dec 2685 | Vol 4.0 bln |
Industry Watch
| Strong: Consumer Discretionary, Real Estate, Information Technology |
| | Weak: Energy, Utilities, Financials, Materials |
Moving the Market
-- Market closes mostly lower amid lack of conviction
-- Investors reassessed growth outlook after new home sales for April and consumer confidence for May missed expectations
-- 10-yr yield continued to dip
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Stocks close slightly lower amid lack of conviction
25-May-21 16:20 ET
Dow -81.52 at 34312.46, Nasdaq -4.00 at 13657.20, S&P -8.92 at 4188.13
[BRIEFING.COM] The S&P 500 decreased 0.2% on Tuesday, fading a positive open, as the market took a breather while investors reassessed the growth outlook. The Nasdaq Composite (-0.03%) and Dow Jones Industrial Average (-0.2%) also closed slightly lower while the Russell 2000 (-1.0%) underperformed with a 1.0% decline.
Shortly after the open, investors received data that showed new home sales decline 5.9% m/m in April to a seasonally adjusted annual rate of 863,000 (Briefing.com consensus 980,000) and the Conference Board's Consumer Confidence Index dip 0.3 points to 117.2 in May (Briefing.com consensus 118.0).
While stocks had already pared most of their opening gains before the reports were released, the softer-than-expected data presumably restrained investor enthusiasm and fed into peak growth-rate concerns. These concerns were manifested in the steady decline in the 10-yr yield, which settled four basis points lower at 1.56%.
Furthermore, many of the cyclical stocks struggled, including those within the energy (-2.0%), financials (-1.0%), and materials (-0.9%) sectors. United Airlines (UAL 56.98, +0.84, +1.5%) was an exception after the company provided an encouraging update for the second quarter.
Interestingly, growth stocks didn't draw that much positive support from the decline in long-term interest rates. The information technology sector (+0.1%), which is more oriented towards growth stocks, increased just 0.1%. The consumer discretionary sector (+0.3%) was the top-performer with a 0.3% gain.
The lackluster performance of the tech sector might have been a function of fatigue after the sector entered the session up nearly 5.0% from its intraday low last Wednesday. The S&P 500 also came within 1.0% of its all-time high today, and without a new catalyst to support further rebound gains, the market might have defaulted back to its consolidation mindset.
A separate viewpoint on today's action in the Treasury market suggested that its strength was more due to short-covering activity since the consensus on Wall Street had been calling for higher interest rates. Whatever the case, the understanding that several views could be reasonably argued today wasn't that conducive for trading conviction.
The 2-yr yield remained unchanged at 0.15%. The U.S. Dollar Index decreased 0.2% to 89.69. WTI crude futures settled higher by 0.1%, or $0.05, to $66.07/bbl.
Reviewing Tuesday's economic data:
- New home sales declined 5.9% month-over-month in April to a seasonally adjusted annual rate of 863,000 (Briefing.com consensus 980,000) from a downwardly revised 917,000 (from 1.021 million) in March. On a yr/yr basis, new home sales were up 48.3%, having lapped a very depressed comparison period due to the pandemic.
- The key takeaway from the report is that new home sales, which are counted when contracts are signed, are being squeezed by high costs for builders and high prices for buyers. This connection is showing up in the reduced percentage of sales for homes priced under $399,999 and the increased percentage of sales for homes priced over $500,000.
- The Conference Board's Consumer Confidence Index checked in at 117.2 in May (Briefing.com consensus 118.0) versus a downwardly revised 117.5 (from 121.7) in April.
- The key takeaway from the report is the recognition that consumers felt less optimistic about the outlook due to reduced expectations for income, business, and labor market conditions -- a view that could potentially give way to reduced inflation fears in the market.
- The S&P Case-Shiller Home Price Index increased 13.3% yr/yr in March (Briefing.com consensus 12.6%) following a revised 12.0% increase (from +11.9%) in February.
- The FHFA Housing Price Index increased 1.4% m/m in March following a revised 1.1% increase (+0.9%) in February.
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
- Dow Jones Industrial Average +12.1% YTD
- Russell 2000 +11.7% YTD
- S&P 500 +11.5% YTD
- Nasdaq Composite +6.0% YTD
WTI crude futures settle fractionally higher
25-May-21 15:30 ET
Dow -36.95 at 34357.03, Nasdaq +5.46 at 13666.66, S&P -5.08 at 4191.97
[BRIEFING.COM] The S&P 500 is down 0.1%, and the Russell 2000 is down 0.8%.
One last look at the S&P 500 sectors shows energy (-1.7%) and utilities (-1.1%) underperforming with losses over 1.0%, while the consumer discretionary (+0.4%) and real estate (+0.6%) sectors sport modest gains atop the leaderboard.
WTI crude futures settled higher by 0.1%, or $0.05, to $66.07/bbl. |
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