The Week In Review
The stock market ended a defensive week on an upbeat note. The S&P 500 gained 1.1% to narrow its weekly decline to 0.4% while the Nasdaq (+1.3%) outperformed slightly today, but lost 1.7% since last Friday.
The final session of the week was very quiet with the bulk of the action taking place at the open when the S&P 500 spiked above its 50-day moving average (2,090). The benchmark index spent the bulk of the day near its morning high, but punched through that level during afternoon action to complete a full retracement of Thursday's decline.
Nine of ten sectors posted gains with materials (+1.7%) ending the day and the week (+2.0%) ahead of the remaining sectors. Today, the growth-sensitive group received support from Monsanto (MON 118.42, +4.46) as the stock spiked 3.9% after Bloomberg reported the company has approached Syngenta (SYT 77.95, +10.91) about a potential takeover. Steelmakers also contributed to the sector's strength with Market Vectors Steel ETF (SLX 35.74, +0.49) climbing 1.4%.
Meanwhile, the other commodity-related sector—energy—spent the bulk of the session in the red, but turned positive during the afternoon. The sector added 0.3% today and finished the week with a 1.1% gain. Crude oil weighed on the sector in the early going, but the energy component narrowed its loss to 0.8% by the close to settle at $59.15/bbl. WTI crude recovered a portion of its decline after the latest Baker Hughes Rig Count showed that the pace of decline in active oil and gas rigs slowed to 27 from 31 observed last week.
However, crude oil could not return into the green as an uptick in the greenback weighed on the dollar-denominated commodity. To that point, the Dollar Index (95.15, +0.55) added 0.6% and registered its first advance in eight days after the previous seven sessions saw the index slide 3.6%.
Outside of energy, the financial sector (+0.8%) was the only other cyclical group that ended the day behind the broader market. Meanwhile, the top-weighted technology sector (+1.5%) outperformed even as LinkedIn (LNKD 205.21, -46.92) plunged 18.6% after its cautious guidance overshadowed a one-cent beat. However, LinkedIn's weakness was offset by most large cap names with the likes of Apple (AAPL 128.95, +3.80), Oracle (ORCL 44.37, +0.75), and Intel (INTC 33.42, +0.87) gaining between 1.7% and 3.0%.
Over on the countercyclical side, only the health care sector (+1.3%) finished the day ahead of the S&P 500 with help from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 344.00, +10.34) spiked 3.1% after Gilead Sciences (GILD 105.03, +4.52) reported better than expected results.
Treasuries retreated throughout the day, sending the 10-yr yield higher by eight basis points to 2.11%.
Today's participation was below recent averages with roughly 720 million shares changing hands at the NYSE floor.
Economic data included Construction Spending, ISM Index, and Michigan Sentiment:
Construction spending declined 0.6% in March after increasing an upwardly revised 0.1% (from -0.1%) in February while the Briefing.com consensus expected an increase of 0.4%
Private construction spending increased 0.3% in March after declining 0.3% in February
Despite a rebound in the new housing starts, private residential construction declined 1.6% in March after increasing 0.2% in February
The ISM Manufacturing Index was unchanged and remained at 51.5 in April while the Briefing.com Consensus expected an increase to 51.9
Even though the overall index did not strengthen as the consensus expected, the key production and order readings showed improvement
The Production Index increased to 56.0 in April from 53.8 in March
The New Orders Index increased to 53.5 from 51.8
The University of Michigan Consumer Sentiment Index was unrevised in the final April reading after sentiment rose from 93.0 in March to 95.9 in April while the Briefing.com consensus expected a revision up to 96.0
Unlike the Conference Board's Consumer Confidence Index, which declined in April, relatively higher gasoline prices and volatility in the equity markets had no adverse effects on the Consumer Sentiment Index
Monday's data will be limited to the 10:00 ET release of the Factory Orders report for March (Briefing.com consensus 2.1%).
Nasdaq Composite +5.7% YTD
S&P 500 +2.4% YTD
Russell 2000 +1.9% YTD
Dow Jones Industrial Average +1.1% YTD
Week in Review: Backing Off Record Highs
The stock market began the week with a pullback from record levels, but not before setting fresh intraday record highs during the opening minutes of action. The S&P 500 (-0.4%) registered its first decline in four sessions while the Nasdaq Composite (-0.6%) underperformed. Equity indices displayed modest gains in the early going to follow a relatively quiet weekend. It is worth noting that China's Shanghai Composite soared 3.0% after MNI reported the People's Bank of China is looking into purchasing local government bonds. As for U.S. stocks, the S&P 500 held an eight-point gain at the start with cyclical sectors underpinning the early strength; however, biotechnology lagged from the early going and pressured the health care sector (-1.8%) to the bottom of the leaderboard. For its part, the iShares Nasdaq Biotechnology ETF (IBB 348.55, -15.15) lost 4.2% and contributed to the underperformance of the Nasdaq.
Equity indices ended the Tuesday session on a mixed note with the Dow (+0.4%) and S&P 500 (+0.3%) registering modest gains while the Nasdaq (-0.1%) settled in the red. Stocks spent the bulk of the trading day near their flat lines, save for a morning retreat, which was retraced in short order. The brief pullback occurred after a disappointing Consumer Confidence report and unfolded amid reports from Al Arabiya indicating that a U.S. cargo vessel was seized by Iran. The U.S. Navy promptly refuted the report with subsequent stories revealing that the cargo ship came from the Marshall Islands, which are under U.S. protectorate. Furthermore, the ship was released a couple hours after the initial stoppage. Although the major averages returned to their flat lines in short order, extending the rebound proved challenging even though nine sectors finished in the green. The top-weighted technology sector (+0.2%) was limited to a modest gain with its largest component—Apple (AAPL 130.56, -2.09)—falling 1.6% despite beating earnings and revenue estimates; however, the stock entered the session with a 6.3% gain since April 17, suggesting a strong report was already priced in.
The market ended the midweek session on a modestly lower note. The S&P 500 shed 0.4% while the Nasdaq Composite (-0.6%) underperformed throughout the session. Equity indices struggled in the early going after the advance reading of Q1 GDP (0.2%; Briefing.com consensus 1.0%) missed expectations. However, that disappointment was partially offset by the FOMC directive, which did not stir concerns of a rate hike taking place in the near term. Instead, the FOMC reiterated that the current policy stance will remain appropriate until there is reasonable confidence among members that inflation will move back toward the 2.0% objective. Seven sectors registered losses while energy (+0.7%) outperformed throughout the session thanks to a 2.6% gain in crude oil, which settled at $58.52/bbl. The energy component was boosted by a storage report that showed a smaller than expected inventory build while dollar weakness also factored into the move higher.
The major averages ended April on a lower note, but managed to escape with monthly gains. The S&P 500 lost 1.0% and narrowed its April advance to 0.9% while the Nasdaq Composite (-1.6%) underperformed today and ended the month (+0.8%) just behind the benchmark index. Equity indices faced selling pressure from the get-go with the largest sector—technology (-1.6%)—leading the daylong retreat. The influential group faced broad-based weakness with its top component—Apple (AAPL 125.15, -3.49)—sliding 2.7% after the Wall Street Journal reported that some watch components provided by AAC Technologies (AACAY 53.31, -2.79) may be defective. That being said, other sector members also struggled with Yelp (YELP 39.36, -11.92) cratering in reaction to its quarterly report. Shares of YELP tumbled 23.2% in reaction to disappointing earnings/revenue and cautious revenue guidance for Q2.