Closing Stock Market Summary
Stocks were seemingly poised for a rebound in the early going following sharp losses yesterday and this month. Equities started to fade, however, as oil prices and market rates moved higher. The major indices ultimately settled off their lows thanks to a mega-cap powered climb in the afternoon trade.
Notably, the afternoon improvement happened despite yields and crude oil futures remaining elevated. The 10-yr note yield, which fell to 4.48% on no news shortly before the stock market opened, settled seven basis points higher at 4.63%. The 2-yr note yield hit 5.04% overnight, but settled unchanged from yesterday at 5.14%. The U.S. Dollar Index rose 0.4% to 106.70.
WTI crude oil futures jumped 3.8% to $93.93/bbl, which stoked lingering concerns about inflation expectations, rising gas prices, and a slowdown in consumer spending. That move helped drive a 2.5% gain in the S&P 500 energy sector.
The next best performing sector was industrials (+0.8%) followed by communication services (+0.5%) and information technology (+0.2%). The rate-sensitive utilities sector (-1.9%) saw the steepest decline.
Despite the mixed index level performance, breadth was positive this session. Advancers had a roughly 11-to-10 lead over decliners at the NYSE and the Nasdaq.
Mega caps, semiconductor stocks, and growth stocks outperformed and helped support the broader market. The Vanguard Mega Cap Growth ETF (MGK) rose 0.1% after being down nearly 1.0%, the Russell 3000 Growth Index rose 0.2%, and the PHLX Semiconductor Index rose 1.0%.
Separately, the Russell 2000 paced index level gains (+1.0%) thanks to its energy components.
- Nasdaq Composite: +25.1% YTD
- S&P 500: +11.3% YTD
- S&P Midcap 400: +2.3% YTD
- Dow Jones Industrial Average: +1.2% YTD
- Russell 2000: +1.0% YTD
Reviewing today's economic data:
- The weekly MBA Mortgage Applications Index declined 1.3% with purchase applications falling 1% and refinance applications dropping 2%.
- Total durable goods orders increased 0.2% month-over-month in August ( consensus -0.2%) following a downwardly revised 5.6% decline (from -5.2%) in July. Excluding transportation, durable goods orders were up 0.4% ( consensus 0.3%) following a downwardly revised 0.1% increase (from 0.5%) in July.
- The key takeaway from the report is that orders for nondefense capital goods excluding aircraft -- a proxy for business spending -- were up a robust 0.9% month-over-month, rebounding from a 0.4% decline in July.
Looking ahead to Thursday, market participants will receive the following economic data:
- 8:30 ET: Q2 GDP -- third estimate ( consensus 2.1%; prior 2.1%), Q2 GDP Deflator -- third estimate ( consensus 2.0%; prior 2.0%), weekly Initial Claims ( consensus 215,000; prior 201,000), and Continuing Claims (prior 1.662 mln)
- 10:00 ET: August Pending Home Sales ( consensus -1.0%; prior 0.9%)
- 10:30 ET: Weekly natural gas inventories (prior +64 bcf)