Closing Stock Market SummaryThe stock market closed the week on a downbeat note. Ongoing consolidation efforts contributed to some of the weakness, although concerns about global growth prospects were another contributing factor. The major indices hit their best levels in the early afternoon trade as a few mega cap stocks recovered from opening losses, yet selling picked up again to interrupt that rebound effort.
Ultimately, the major indices all closed in negative territory with losses ranging from 0.7% to 1.4%.
The downside moves followed a slate of disappointing preliminary June manufacturing PMIs for Japan, Germany, the UK, the eurozone, and the U.S., all of which came in below 50 (i.e. the dividing line between expansion and contraction). Following yesterday's central bank rate hikes, those reports fueled worries that prior rate hikes may be adversely impacting economic activity, specifically in the manufacturing sector.
Growth concerns manifested themselves in falling commodity prices, the outperformance of the dollar, and sliding Treasury yields. The U.S. Dollar Index rose 0.5% today to 102.91. WTI crude oil futures fell 0.4% to $69.18/bbl and copper futures fell 2.0% to $3.80/lb. The 2-yr note yield fell five basis points to 4.75% and the 10-yr note yield fell six basis points to 3.74%.
Today's retreat in the stock market was broad and orderly. Decliners led advancers by a greater than 2-to-1 margin at both the NYSE and the Nasdaq. 24 of the 30 Dow components logged declines and all 11 S&P 500 sectors closed in the red.
The communication services (-0.3%) sector saw the slimmest loss, boosted by a gain in Meta Platforms (META 288.73, +3.85, +1.4%). Other sectors exhibiting relative strength included the health care (-0.3%) and financials (-0.4%) sectors. Meanwhile, the utilities (-1.5%) and consumer discretionary (-1.1%) sectors fell to the bottom of the pack.
Trading volume was extremely heavy today, reflecting the reconstitution of the Russell Indexes.
- Nasdaq Composite: +28.9% YTD
- S&P 500: +13.3% YTD
- Russell 2000: +3.4% YTD
- S&P Midcap 400: +3.5% YTD
- Dow Jones Industrial Average: +1.8% YTD
Reviewing today's economic data:
- June IHS Markit Manufacturing PMI - Prelim 46.3; Prior 48.4
- June IHS Markit Services PMI - Prelim 54.1; Prior 54.9
There is no U.S. economic data of note on Monday.