Closing Market Summary: Stocks End Strong Week on Cautious Note
The stock market finished an upbeat week on a lower note with the tech-heavy Nasdaq Composite losing 1.0% while the S&P 500 shed 0.3% with four sectors ending in the red.
Equities began the day on a strong note with no economic data to influence the trading sentiment; however, quadruple witching and index rebalancing contributed to additional volatility and volume. With nearly two billion shares changing hands at the New York Stock Exchange, today's final volume was less than 500 million below the 2.44 billion collective total registered between Monday and Thursday.
The S&P 500 surged out of the gate, notching a fresh intraday record high at 1884.00, but was unable to establish a new closing high above the March 7 settlement of 1878.04. After spiking at the open, the benchmark average spent the rest of the session in a steady retreat.
While the S&P 500 did not slip into the red until just before 14:00 ET, the Nasdaq underperformed from the open, making its first appearance in negative territory around 10:00 ET. Biotechnology pressured the index from the early going with the iShares Nasdaq Biotechnology ETF (IBB 246.01, -12.24) spending the session in a steady slide before settling lower by 4.7% on heaviest volume since October 2005. The ETF ended 9.9% below its February high, trimming its 2014 gain to 8.4%. In addition to pressuring the Nasdaq, biotechnology contributed to considerable weakness in the health care sector (-1.5%), which ended well behind the remaining nine sectors.
Although no other sector posted a loss larger than 0.6%, other top-weighted groups like technology (-0.5%) and consumer discretionary (-0.6%) underperformed while financials (+0.01%) finished a bit ahead of the broader market after being up as much as 1.1% at the start of the session.
Losses in the technology sector were paced by chipmakers with Intel (INTC 25.17, -0.25) falling 1.0% while the broader PHLX Semiconductor Index lost 0.9%. On the software side, shares of Symantec (SYMC 18.20, -2.71) caught a virus, plunging 12.9% after the company unexpectedly terminated Chief Executive Officer Steve Bennett, naming Michael Brown interim president and CEO.
Elsewhere, the discretionary space was pressured by homebuilders and Nike (NKE 75.21, -4.06). Top-weighted homebuilders posted losses across the board with the iShares Dow Jones US Home Construction ETF (ITB 24.17, -0.40) slumping 1.6%. For its part, Nike tumbled 5.1% after its cautious outlook overshadowed above-consensus earnings and revenue.
Even though three of the four largest sectors underperformed notably, the broader market was kept from registering additional losses by the relative strength among the second-tier sectors. Consumer staples (+0.03%), energy (+0.3%), and industrials (+0.1%) all finished ahead of the broader market. Materials (+0.5%), telecom services (-0.03%), and utilities (+0.8%) also ended ahead of the S&P 500, but their impact was limited since three sectors account for just 9.9% of the entire market.
With stocks under pressure, participants displayed demand for volatility protection, sending the CBOE Volatility Index (VIX 15.00, +0.48) higher by 3.3% after the near-term volatility measure tested early March lows at the start of the session.
Treasuries spent the entire day in a steady climb from their morning lows. The benchmark 10-yr yield fell three basis points to 2.74%.
* Russell 2000 +2.8% YTD * Nasdaq Composite +2.4% YTD * S&P 500 +1.0% YTD * Dow Jones Industrial Average -1.7% YTD