Wall Street closes lower on possible delay in trade deal
20-Nov-19 16:20 ET
Dow -112.93 at 27821.00, Nasdaq -43.93 at 8526.73, S&P -11.72 at 3108.46
briefing.com
[BRIEFING.COM] The S&P 500 declined as much as 0.9% on Wednesday after Reuters reported that a Phase One trade deal may not get completed this year. Stocks cut losses throughout the afternoon, leaving the benchmark index down 0.4% for the session -- comparable to the losses in the Dow Jones Industrial Average (-0.4%), Nasdaq Composite (-0.5%), and Russell 2000 (-0.4%).
The negative-sounding headline conflicted with the optimistic tone struck by top White House officials, including Commerce Secretary Ross just last night. Also transpiring last night was the U.S. Senate passing the Hong Kong Human Rights and Democracy Act, much to the contempt of China. Altogether, it seemed like a good time to take profits, especially if the Dec. 15 tariffs still go into effect.
The trade-sensitive areas of the market like the S&P 500 materials (-1.2%), industrials (-0.8%), and information technology (-0.7%) sectors led the decline. The communication services sector (-0.8%), which contains many growth-oriented stocks, also underperformed.
Unsurprisingly, though, selling pressure quickly abated amid an opportunistic mindset among investors eagerly awaiting a dip. In addition, the details of the report were not as foreboding as the headline, and knee-jerk selling, suggested. Tucked in the report was a line indicating that some "China and trade experts" were still optimistic about a deal in the coming weeks.
Leading the afternoon comeback was the energy sector (+1.0%), which found reprieve amid a 3% rebound in oil prices ($56.91, +1.70, +3.1%). The defensive-oriented utilities (+0.6%), consumer staples (+0.2%), and real estate (+0.03%) sectors also finished in positive territory.
Shares of Target (TGT 126.43, +15.58, +14.1%) climbed 14% after the company impressed investors with its stellar results and upbeat guidance. Lowe's (LOW 117.83, +4.43, +3.9%) also beat earnings estimates and raised its FY20 EPS guidance.
U.S. Treasuries continued to benefit from a defensive mindset, which sent yields lower in a curve-flattening trade. The 2-yr yield declined two basis points to 1.57%, and the 10-yr yield declined five basis points to 1.74%. The U.S. Dollar Index increased 0.1% to 97.91.
Separately, the release of the FOMC Minutes from the October meeting didn't draw much attention, as it was consistent with the prevailing view about monetary policy since that meeting. Economic data was limited to the weekly MBA Mortgage Applications Index, which declined 2.2% following a 9.6% increase in the prior week.
On Thursday, investors will receive the weekly Initial and Continuing Claims report, the Philadelphia Fed Index for November, Existing Home Sales for October, and the Conference Board's Leading Economic Index for October.
- Nasdaq Composite +28.5% YTD
- S&P 500 +24.0% YTD
- Dow Jones Industrial Average +19.3% YTD
- Russell 2000 +18.0% YTD
Market Snapshot
| Dow | 27821.00 | -112.93 | (-0.40%) | | Nasdaq | 8526.73 | -43.93 | (-0.51%) | | SP 500 | 3108.46 | -11.72 | (-0.38%) | | 10-yr Note | +26/32 | 1.741 |
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| | NYSE | Adv 1259 | Dec 1593 | Vol 1.0 bln | | Nasdaq | Adv 1202 | Dec 1892 | Vol 2.2 bln |
Industry Watch
| Strong: Energy, Utilities, Consumer Staples, Real Estate |
| | Weak: Materials, Communication Services, Industrials, Information Technology |
Moving the Market
-- Reuters reported that a Phase One trade deal may not be completed this year; stocks cut losses throughout the afternoon
-- Trade-sensitive stocks underperformed; energy stocks and oil prices rebounded
-- Target (TGT) and Lowe's (LOW) pleased investors with earnings results, guidance
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WTI crude rebounds 3%
20-Nov-19 15:25 ET
Dow -137.39 at 27796.54, Nasdaq -53.86 at 8516.80, S&P -14.31 at 3105.87
[BRIEFING.COM] The S&P 500 is on pace to end the session on a lower note, as it trades down 0.5%. The Russell 2000 is down 0.3%.
One last look inside the S&P 500 shows communication services (-1.1%), materials (-1.1%), and information technology (-0.9%) leading today's decline. The energy sector (+1.3%) remains on top, followed by utilities (+0.6%), consumer staples (+0.2%), and real estate (+0.1%).
WTI crude rebounded $1.70 (+3.1%) to $56.91/bbl following a better-than-feared rise in weekly crude inventories, according to the EIA. |
