Closing Stock Market SummaryThe major indices had a somewhat mixed showing today. The session started with a wait-and-see vibe ahead of the 2:00 p.m. ET release of April Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS).
In brief, the SLOOS confirmed what the market had already been expecting following the regional banking crisis that began in mid-March. Lending standards have tightened and banks expect to tighten standards across all loan categories over the remainder of 2023. Furthermore, they expect credit quality to deteriorate. There was a bout of volatility initially following the SLOOS release, but the market soon steadied itself and traded back to where it was just before the release.
Ultimately, the major indices closed the session near their flat lines, sporting only modest gains or losses. Index performance was supported by gains in some mega cap stocks, driving a 0.3% gain in the Vanguard Mega Cap Growth ETF (MGK). The Invesco S&P 500 Equal Weight ETF (RSP), meanwhile, fell 0.2%.
Many of the regional bank stocks started the session in rally mode before rolling over, giving back a lot of their gains. The SPDR S&P Regional Bank ETF (KRE) had been up 2.7% this morning, but closed with a 2.0% loss. Notably, PacWest (PACW 5.97, +0.21, +3.7%) closed with a gain, albeit well off its session high, despite cutting its dividend to $0.01 per share from $0.25. PACW had been up as much as 30.2% earlier.
Most of the S&P 500 sectors closed in the red with real estate (-0.7%) and industrials (-0.4%) showing the biggest losses. The communication services sector (+1.3%) was the only sector to move more than 1.0%, leading the outperformers thanks to gains in Meta Platforms (META 233.27, +0.49, +0.2%) and Alphabet (GOOG 108.24, +2.02, +1.9%).
Some individual companies with specific catalysts made outsized moves today. Catalent (CTLT 35.46, -12.29, -25.7%) plunged after delaying its third quarter results and conference call, saying it expects to significantly reduce both its fiscal 2023 net revenue and Adjusted EBITDA guidance by more than $400 million each. Tyson Foods (TSN 50.73, -9.96, -16.4%) was another top laggard after missing on earnings and revenue estimates.
On the flip side, American Airlines (AAL 14.36, +0.49, +3.5%) outperformed after being upgraded to Overweight from Neutral at JPMorgan and Zscaler (ZS 107.92, +18.46, +20.6%) registered a big gain after raising its fiscal Q3 revenue outlook.
Concerns over the debt ceiling were a distracting factor for the stock market today. Over the weekend, Treasury Secretary Yellen warned of "economic chaos" if the debt ceiling is not raised, according to CNBC. Also, President Biden will meet with House Speaker McCarthy and other Congressional leaders Tuesday at 4:00 p.m. ET.
Separately, the NY Fed's Survey of Consumer Expectations for April reflected a 0.3 percentage point decline in the one-year ahead horizon to 4.4%, yet three-year and five-year ahead inflation expectations increased by 0.1 percentage point to 2.9% and 2.6%, respectively. This comes ahead of the latest inflation data in the form of the April Consumer Price Index (CPI) Wednesday at 8:30 a.m. ET.
Treasuries built on their losses today. The 2-yr note yield rose eight basis points to 3.99% and the 10-yr note yield rose eight basis points to 3.52%.
- Nasdaq Composite: +17.1% YTD
- S&P 500: +7.8% YTD
- Dow Jones Industrial Average: +1.4% YTD
- S&P Midcap 400: +1.0% YTD
- Russell 2000: -0.4% YTD
Economic data today is limited to the Wholesale Inventories report for March (consensus 0.1%; prior 0.1%) at 10:00 a.m. ET.
There is no notable U.S. economic data on Tuesday.
Duke Energy (DUK), Aramark (ARMK), Fox Corporation (FOXA), Jacobs Engineering (J), GlobalFoundries (GFS), Warner Music Group (WMG), Under Armour (UAA), Perrigo (PRGO), WeWork (WE), AMC Networks (AMCX), and Olaplex (OLPX) are among the notable companies reporting earnings ahead of tomorrow's open.