Value stocks led the way on Thursday
08-Oct-20 16:20 ET
Dow +122.05 at 28425.45, Nasdaq +56.38 at 11420.91, S&P +27.38 at 3446.82
briefing.com
[BRIEFING.COM] The S&P 500 gained 0.8% on Thursday in a broad-based advance led by the value stocks. The Russell 2000 (+1.1%) outperformed once again, while the Nasdaq Composite (+0.5%) and Dow Jones Industrial Average (+0.4%) posted more modest gains.
Today felt like one of those lackluster days in a bull market in which nothing spectacular happened, but the net sum of developments helped preserve sentiment and trading momentum. News that House Speaker Pelosi will not support a standalone bill for airlines unless the White House commits to a larger stimulus package had the potential to rattle markets, but it didn't.
Airline stocks did decline from prior highs, but still closed higher like every sector in the S&P 500. Leadership was transferred to the value-oriented energy (+3.8%), utilities (+1.8%), real estate (+1.6%), and financials (+1.4%) sectors. The information technology sector (+0.5%) was an influential laggard.
IBM (IBM 131.49, +7.42, +6.0%) and the semiconductor stocks kept the tech sector afloat. IBM rose 6% after announcing plans to spin off its IT infrastructure unit, so it could focus on its hybrid cloud growth strategy. Taiwan Semiconductor (TSM 87.80, +0.88, +1.0%) sparked buying interest in the chip space after reporting strong revenue growth in September.
The Philadelphia Semiconductor Index rose 1.2% and got an added boost from On Semiconductor (ON 26.04, +2.69, +11.5%) after Starboard Value added the stock to its portfolio.
In other positive developments, crude prices ($41.18/bbl, +$1.22, +3.1%) rose 3%, Regeneron (REGN 599.88, +8.19, +1.4%) requested emergency use authorization for its COVID-19 antibody therapy, and Boeing (BA 168.00, +3.39, +2.1%) was reported to be in talks with Alaska Airlines (ALK 38.63, +1.61, +4.4%) for a potential 737 Max order.
Separately, Morgan Stanley (MS 49.00, +0.29, +0.6%) said it will acquire Eaton Vance (EV 60.65, +19.71, +48.1%) for approximately $7 billion, or $56.50 per share, in cash and stock.
U.S. Treasuries edged higher in a steady advance despite the gains in equities, which meant yields moved lower. The 2-yr yield decline two basis points to 0.13%, and the 10-yr yield declined two basis points to 0.77%. The U.S. Dollar Index finished little changed at 93.59.
Thursday's economic data featured the weekly initial claims report, which didn't produce any headline surprises:
- Initial claims for the week ending October 3 decreased by 9,000 to 840,000 (Briefing.com consensus 830,000) from an upwardly revised 849,000 (from 837,000) in the prior week. Continuing claims for the week ending September 26 decreased by 1.003 million to 10.976 million from an upwardly revised 11.979 million (from 11.767 million) in the prior week.
- The key takeaway from the report is that it isn't a complete picture since California is working through backlogged claims, but setting that point aside, the number of initial claims at this juncture is still exceedingly high and indicative of the ongoing demand challenges faced by U.S. businesses.
Looking ahead, investors will receive Wholesale Inventories for August on Friday.
- Nasdaq Composite +27.3% YTD
- S&P 500 +6.7% YTD
- Dow Jones Industrial Average -0.4% YTD
- Russell 2000 -2.4% YTD
Market Snapshot
| Dow | 28425.45 | +122.05 | (0.43%) | | Nasdaq | 11420.91 | +56.38 | (0.50%) | | SP 500 | 3446.82 | +27.38 | (0.80%) | | 10-yr Note | +3/32 | 0.766 |
|
| | NYSE | Adv 2267 | Dec 747 | Vol 798.8 mln | | Nasdaq | Adv 2273 | Dec 1132 | Vol 3.5 bln |
Industry Watch
| Strong: Energy, Real Estate, Financials, Utilities |
| | Weak: Information Technology, Consumer Discretionary |
Moving the Market
-- Value stocks led broad-based advance
-- Encouraging round of corporate news supported recovery/coronavirus treatment optimism
-- Market was not bothered by negative-sounding stimulus news
|
WTI crude rallied 3%
08-Oct-20 15:25 ET
Dow +94.69 at 28398.09, Nasdaq +46.45 at 11410.98, S&P +24.94 at 3444.38
[BRIEFING.COM] The S&P 500 is up 0.7% and is now up 2.8% this week. The gains remain broad, although there are some tech laggards like Apple (AAPL 114.89, -0.19, -0.2%).
One last look at the S&P 500 sectors shows four sectors up at least 1.0%, including a 3.6% gain in the energy sector. The information technology sector is a rare underperformer with a 0.3% gain, which has limited today's index gains.
WTI crude futures settled higher by 3.1%, or $1.22, to $41.18/bbl. |
