The stock market began the new trading week on a higher note. The S&P 500 spiked 1.3% while the Nasdaq (+0.9%) and Russell 2000 (+0.9%) underperformed.

 

Overall, the Monday session was fairly quiet with the market spending some time on each side of its unchanged level. The S&P 500 began with a slim gain, but relative weakness among high-beta biotechnology and chipmaker names kept heavily-weighted health care (+0.6%) and technology (+1.0%) sectors on the defensive. The S&P 500 tried to overcome that weakness, but was rebuffed by its 100-day moving average in the 2,010 area. However, a second effort in the late afternoon sent the S&P 500 well above the 100-day average to end the day.

 

All ten sectors finished in the green with energy (+3.0%) spending the entire session in the lead. The sector benefitted from a 2.8% advance in crude oil ($49.59/bbl) while also drawing strength from ExxonMobil (XOM 89.58, +2.16). Shares of XOM jumped 2.5% in reaction to better than expected earnings thanks to a $1 billion non-cash windfall resulting from deferred tax items and a favorable ruling for expropriated Venezuela assets.

 

Elsewhere among cyclical sectors, financials (+1.6%) and industrials (+1.5%) displayed relative strength throughout the day after posting respective losses of 7.0% and 3.7% in January. Meanwhile, the top-weighted technology sector (+1.0%) spent the day behind the broader market, but narrowed the gap during afternoon action.

 

For the most part, large cap tech names fared well, but Google (GOOGL 532.20, -5.35) and Facebook (FB 74.99, -0.92) lost 1.0% and 1.2%, respectively. Similarly, chipmakers struggled as a group, which limited the PHLX Semiconductor Index to an uptick of 0.3%.

 

The underperformance of semiconductor names kept the Nasdaq behind the broader market, but so did biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 319.58, -2.07) lost 0.6% while the health care sector advanced 0.6%.

 

Similar to health care, the utilities sector (+0.4%) underperformed while consumer staples (+1.3%) and telecom services (+2.5%) fared well.

 

Treasuries registered modest losses with the 10-yr yield climbing three basis points to 1.68%.

 

Economic data included Personal Income/Spending data, ISM Index, and Construction Spending:

 

Personal income increased 0.3% for a second consecutive month in December following a negative revision (from 0.4%) in November while the Briefing.com consensus expected personal income an increase of 0.3% 

Personal spending declined 0.3% after increasing a downwardly revised 0.5% (from 0.6%) in November while the consensus expected a decrease of 0.3%

The ISM Manufacturing Index dropped to 53.5 in January from 55.1 in December while the Briefing.com consensus expected a decline to 54.7  

Production growth decelerated as the related index fell to 56.5 in January from 57.7 in December. The drop coincided with a decline in new orders (52.9 from 57.8) and a large contraction (46.0 from 52.5) in unfilled orders

Construction spending increased 0.4% in December after declining an upwardly revised 0.2% (from -0.3%) in November while the Briefing.com consensus expected an increase of 0.8%

Tomorrow, the Factory Orders report for December will be released at 10:00 ET (Briefing.com consensus -2.0%).

 

Nasdaq Composite -1.3% YTD

S&P 500 -1.9% YTD

Russell 2000 -2.4% YTD

Dow Jones Industrial Average -2.6% YTD