S&P 500 and Nasdaq close at record highs in front of earnings season
13-Jan-20 16:15 ET
Dow +83.28 at 28906.96, Nasdaq +95.07 at 9273.95, S&P +22.78 at 3288.13
briefing.com
[BRIEFING.COM] The S&P 500 (+0.7%) and Nasdaq Composite (+1.0%) closed at record highs on Monday in a continuation trade of the market's bullish momentum. The Dow Jones Industrial Average increased 0.3%, and the Russell 2000 increased 0.7%.
Today's advance could be attributed to several factors: 1) the positive price action buoying sentiment, 2) expectations that the upcoming earnings season will include reassuring guidance, 3) news the U.S. will remove China from its currency manipulator list, thereby improving trade relations and possibly economic growth prospects, and 4) little negative news to derail sentiment.
In turn, ten of the 11 S&P 500 sectors pushed higher, with leadership coming from the materials (+1.4%), information technology (+1.3%), and real estate (+1.2%) sectors. Apple (AAPL 316.96, +6.63, +2.1%) remained an influential force after its price target was raised to $375 from $300 at D.A. Davidson.
High-growth stocks remained in favor, too, particularly Tesla (TSLA 524.86, +46.71, +9.8%), lululemon athletica (LULU 245.18, +10.34, +4.4%), and Beyond Meat (BYND 114.34, +18.27, +19.0%). Tesla had its price target raised to $612 from $385 at Oppenheimer. Lululemon raised its Q4 EPS, revenue, and comparable sales guidance.
The health care sector (-0.4%) was the lone holdout amid disappointing guidance from Abiomed (ABMD 168.10, -20.96, -11.1%), weakness in the insurance stocks after Senator Bernie Sanders (I-VT) took the lead in the latest poll in Iowa, and a relatively quiet first day at the JPMorgan Healthcare Conference.
In M&A activity, Hexcel (HXL 79.89, +6.98, +9.6%) and Woodward (WWD 127.84, +5.88, +4.8%) agreed to merge in a $6.4 billion deal. The bidding war for Anixter (AXE 98.33, -0.46, -0.5%) finally ended after the company agreed to be acquired by Wesco (WCC 56.43, -1.71, -2.9%) in a $4.5 billion deal.
U.S. Treasuries finished slightly lower in a tight-ranged session. The 2-yr yield and the 10-yr yield increased two basis points each to 1.58% and 1.85%, respectively. The U.S. Dollar Index finished flat at 97.36. WTI crude fell 1.5%, or $0.87, to $58.12/bbl.
Monday's economic data was limited to the Treasury Budget for December, which showed a deficit of $13.3 billion (Briefing.com consensus -$15.0 billion) versus a deficit of $13.5 billion in the same period a year ago. The budget deficit over the last 12 months is $1.022 trillion versus $1.022 trillion in November.
Looking ahead, investors will receive the Consumer Price Index for December and the NFIB Small Business Optimism Index for December on Tuesday.
- Nasdaq Composite +3.4% YTD
- S&P 500 +1.8% YTD
- Dow Jones Industrial Average +1.3% YTD
- Russell 2000 +0.1% YTD
Market Snapshot
| Dow | 28906.96 | +83.28 | (0.29%) | | Nasdaq | 9273.95 | +95.07 | (1.04%) | | SP 500 | 3288.13 | +22.78 | (0.70%) | | 10-yr Note | -2/32 | 1.843 |
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| | NYSE | Adv 2004 | Dec 842 | Vol 834.4 mln | | Nasdaq | Adv 2036 | Dec 1161 | Vol 2.4 bln |
Industry Watch
| Strong: Information Technology, Materials, Real Estate |
| | Weak: Health Care, Energy |
Moving the Market
-- S&P 500 and Nasdaq close at record highs
-- Bullish momentum persists amid high expectations for earnings season, little negative news to derail sentiment
-- U.S. will remove China from its currency manipulator list
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WTI crude extends losses
13-Jan-20 15:25 ET
Dow +46.53 at 28870.21, Nasdaq +76.98 at 9255.86, S&P +17.79 at 3283.14
[BRIEFING.COM] The S&P 500 is up 0.5% and is on pace to end the session at a record high.
One last look at the S&P 500 sectors shows the materials (+1.2%) and information technology (+1.1%) sectors up more than 1.0%. The health care sector (-0.4%) continues to underperform following disappointing guidance from Abiomed (ABMD 168.40, -20.59, -10.9%) and a relatively lackluster day at the JPMorgan Chase Healthcare Conference.
WTI crude fell $0.87 (-1.5%) to $58.12/bbl to extend its recent losses amid the ease in geopolitical tensions.
Investor optimism remains high
13-Jan-20 14:55 ET
Dow +58.40 at 28882.08, Nasdaq +80.95 at 9259.83, S&P +18.63 at 3283.98
[BRIEFING.COM] The S&P 500 continues to trade near session highs with gain of 0.6%. The Russell 2000 is also up 0.6%.
Investor sentiment remains buoyed by the bullish momentum in the stock market and a lack of meaningful negative news today. Expectations for a rebound in fourth-quarter earnings are relatively high, trade optimism remains upbeat, central banks are on the side of equities, and geopolitical tensions with Iran appear to be subsiding.
Looking ahead, JPMorgan Chase (JPM 136.70, +0.63, +0.5%), Wells Fargo (WFC 52.09, -0.42, -0.8%), and Citigroup (C 80.14, +0.88, +1.1%) will kick off the Q4 earnings-reporting season when they report earnings results tomorrow morning. |
