Stocks rebound after WHO does not recommend travel restrictions
30-Jan-20 16:25 ET
Dow +124.99 at 28859.35, Nasdaq +23.77 at 9298.95, S&P +10.26 at 3283.66
briefing.com
[BRIEFING.COM] The S&P 500 was down as much as 0.9% on Thursday on pestering growth concerns attributed to the coronavirus outbreak. Stocks rebounded throughout the afternoon, however, after WHO declared a global health emergency but did not recommend restricting the movement of people and goods. The S&P 500 ended the session up 0.3%.
The Dow Jones Industrial Average (+0.4%) and Nasdaq Composite (+0.3%) also managed to close higher, while the Russell 2000 (-0.1%) still finished lower.
The coronavirus remained in focus amid numerous reports about the rising death toll in China, the reduced economic activity in the region, and even the first confirmed case of a person-to-person transmission of the virus in the U.S. There was some angst that the economic restrictions enacted in China would carry over to the U.S., which wouldn't be good for the earnings expectations that elevated stock valuations are based on.
The WHO decision, however, helped dispel some of these worries and a relief rally soon followed, most notably in the travel-related stocks and the S&P 500 financials (+1.3%) and energy (+0.9%) sectors. The consumer staples (+1.1%) and utilities (+0.9%) sectors also outperformed, while the health care (-0.8%) and communication services (-0.8%) sectors lagged.
Individual standouts following earnings included Microsoft (MSFT 172.78, +4.74, +2.8%), Coca-Cola (KO 58.86, +1.85, +3.3%), Tesla (TSLA 640.81, +59.82, +10.3%), Eli Lilly (LLY 142.67, +2.75, +2.0%), Mondelez (MDLZ 58.80, +4.24, +7.8%), and ServiceNow (NOW 341.62, +28.69, +9.2%).
Earnings-related laggards included Facebook (FB 209.53, -13.70, -6.1%), Thermo Fisher (TMO 319.86, -14.03, -4.2%), DuPont (DD 52.72, -4.97, -8.6%), UPS (UPS 108.00, -7.76, -6.7%), and Verizon (VZ 59.36, -0.17, -0.3%). Facebook missed earnings estimates, largely due to slower U.S. growth and higher costs.
U.S. Treasuries posted modest gains, although they did begin to lose traction toward the end of the session. The 2-yield declined three basis points to 1.39%, and the 10-yr yield declined four basis points to 1.56%. The U.S. Dollar Index declined 0.1% to 97.86. WTI crude fell 2.2%, or $1.18, to $52.18/bbl.
Reviewing Thursday's economic data:
- Real GDP increased at a seasonally adjusted annual rate of 2.1% in the fourth quarter (Briefing.com consensus 1.8%), which was unchanged from the third quarter. The GDP Price Deflator was up just 1.4% (Briefing.com consensus 1.8%) after increasing 1.8% in the third quarter.
- All in all, the Advance Q4 GDP estimate painted a picture of an economy running at a moderate growth pace with subdued inflation.
- For the week ending January 25, initial claims decreased by 7,000 to 216,000 (Briefing.com consensus 215,000). Continuing claims for the week ending January 18 decreased by 44,000 to 1.703 million.
- The key takeaway from the report is that initial claims, which are a leading indicator, are sticking to a line that supports a continuation of the economic expansion.
Looking ahead, investors will receive the following reports on Friday: Personal Income and Spending for December, the Chicago PMI for January, the Employment Cost Index for the fourth quarter, and the final University of Michigan Index of Consumer Sentiment for January.
- Nasdaq Composite +3.6% YTD
- S&P 500 +1.6% YTD
- Dow Jones Industrial Average +1.1% YTD
- Russell 2000 -1.2% YTD
Market Snapshot
| Dow | 28859.35 | +124.99 | (0.43%) | | Nasdaq | 9298.95 | +23.77 | (0.26%) | | SP 500 | 3283.66 | +10.26 | (0.31%) | | 10-yr Note | 0/32 | 1.588 |
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| | NYSE | Adv 1487 | Dec 1334 | Vol 880.0 mln | | Nasdaq | Adv 1308 | Dec 1877 | Vol 2.3 bln |
Industry Watch
| Strong: Financials, Utilities, Consumer Staples |
| | Weak: Communication Services, Health Care, Materials |
Moving the Market
-- Stocks recoup losses after WHO declares coronavirus a global health emergency but does not recommend travel or trade restrictions
-- There were pestering growth concerns attributed to the coronavirus outbreak and reduced economic activity in China
-- Mixed earnings: Facebook (FB) disappoints, while Microsoft (MFST), Coca-Cola (KO), and Tesla (TSLA) among gainers
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WTI crude settles down 2%
30-Jan-20 15:30 ET
Dow +9.06 at 28743.42, Nasdaq -3.74 at 9271.44, S&P -2.37 at 3271.03
[BRIEFING.COM] The S&P 500 is now trading at its flat line, as investors react positively to WHO saying it will not recommend travel restrictions amid the coronavirus outbreak.
One last look at the S&P 500 sectors shows the communication services (-1.1%), health care (-1.1%), and materials (-1.0%) sectors continuing to underperform the market, while the financials (+0.8%) and consumer staples (+0.7%) sectors sport decent gains.
WTI crude settled lower by $1.18 (-2.2%) to $52.18/bbl. |
