Closing Market Summary: Nasdaq Composite Leads Stocks Higher
The major averages ended Thursday on an upbeat note with the Nasdaq Composite (+1.3%) leading the market higher. In addition to pacing today's advance, the Nasdaq set a fresh nominal intraday record high at 5,143.32, overtaking levels last seen in March 2000.
Equity indices rallied throughout the morning after the combination of yesterday's FOMC policy statement and today's economic data set the tone for interest rates to remain at their current levels for longer. To that point, the CPI report for May (+0.4%; Briefing.com consensus 0.5%) was cooler than expected while the remaining data points released today indicated improving economic conditions.
Stocks extended their gains in the early afternoon once Germany's Die Zeit reported that Greece is on track to receive an extension until the end of the year without the involvement of the International Monetary Fund. However, that report was struck down promptly as German Chancellor Angela Merkel said she is only aware of the proposal that was brought forth by the creditors.
Furthermore, Reuters reported European Central Bank member Benoit Coeure was asked if Greek banks will be able to open tomorrow, to which he responded, "Tomorrow, yes. Monday, I don't know." However, the ECB was quick to deny issuing this warning.
Despite the continued uncertainty, all ten sectors posted gains with health care (+1.5%) holding the lead throughout the session. The countercyclical group rallied behind biotechnology as iShares Nasdaq Biotechnology ETF (IBB 377.88, +11.33) spiked 3.1%. In turn, biotechnology helped the Nasdaq Composite spend the day ahead of the Dow and S&P 500.
The tech-heavy Nasdaq enjoyed all-around support as chipmakers displayed relative strength with the PHLX Semiconductor Index climbing 1.5%. Meanwhile, most large cap tech names held their own, but Oracle (ORCL 42.75, -2.16) fell 4.8% after missing earnings/revenue estimates and guiding below consensus expectations. Oracle's underperformance kept the tech sector (+0.8%) behind the broader market throughout the day.
Elsewhere among cyclical sectors, industrials ended in-line with the broader market, but that masked relative strength in transport names. The Dow Jones Transportation Average spiked 1.5% with all 20 members ending in the green. Alaska Air (ALK 63.99, +1.96) climbed 3.2% to pace the rally while five other components gained at least 2.0% apiece.
Also of note, the energy sector (unch) surrendered its gain ahead of the close even though crude oil added 1.1%, settling at $60.42/bbl. In other commodities, gold futures jumped 2.1% to $1202/ozt, contributing to a 1.2% gain in the Market Vectors Gold Miners ETF (GDX 19.09, +0.23).
Treasuries surrendered their overnight gains and continued their retreat into the afternoon, sending the benchmark 10-yr yield higher by three basis points to 2.35%.
Today's trading volume surpassed recent totals as more than 830 million shares changed hands at the NYSE floor.
Economic data included Initial Claims, CPI, Current Account Balance, Leading Indicators, and the Philadelphia Fed Survey:
* The initial claims level declined to 267,000 for the week ending June 13 from an unrevised 279,000 while the consensus expected a decline to 276,000
* The four-week moving average dipped to 277,000 from 279,000
* The Consumer Price Index increased 0.4% in May after increasing 0.1% in April while the consensus expected an increase of 0.5%
* That was the largest monthly increase in the headline index since a 0.6% gain in February 2013. Prices were flat on a year-over-year basis * Total energy prices increased 4.3% in May after decreasing 1.3% in April
* Gasoline prices rose 10.4% after declining 1.7% in April
* Excluding food and energy, core CPI increased 0.1% in May after increasing 0.3% in April while the consensus expected an increase of 0.2%
* The current account deficit for the first quarter totaled $113.30 billion while the consensus expected the deficit to hit $116.70 billion
* The fourth quarter deficit was revised to $103.10 billion from $113.50 billion
* The Leading Indicators report for May was up 0.7% while the consensus expected an increase of 0.4% * The Philadelphia Fed Survey for June rose to 15.2 from 6.7 while economists polled by had expected an improvement to 8.0
There is no economic data on tomorrow's schedule.
* Nasdaq Composite +8.4% YTD * Russell 2000 +6.7% YTD * S&P 500 +3.0% YTD * Dow Jones Industrial Average +1.6% YTD