Closing Stock Market Summary
The stock market closed out the week with decent losses, plagued by uncertainty surrounding potential developments in the Israel-Hamas conflict and ongoing interest rate volatility. As a result, today's trade had a risk-off vibe ahead of the weekend when participants cannot react in real-time while the markets are closed for trading.
The 10-yr note yield hit 5.00% yesterday for the first time since 2007. It was met with resistance there and the 10-yr yield pulled back to 4.92% in overnight action. It would eventually retest 4.99%, but once again it was met with resistance. The 10-yr note yield ultimately settled at 4.92%, which is six basis points lower than yesterday.
The disappointing action today also stemmed from the ongoing dysfunction in the House of Representatives. Following three failed rounds of voting, Rep. Jim Jordan (R-OH) lost the status of Speaker of the House nominee after a GOP conference vote went against him by a "wide margin," according to Punchbowl News. The House will now head home for the weekend without another vote, according to CNBC.
Weakness in regional bank stocks following some disappointing earnings news was another overhang for the market today. Regions Financial (RF 14.44, -2.04, -8.5%), Comerica (CMA 37.95, -3.54, -8.5%), and Western Alliance Bancorp (WAL 42.22, -3.86, -8.4%) were among the losing standouts in that regard. The SPDR S&P Regional Banking ETF (KRE) declined 4.0%.
Meanwhile, Dow component American Express (AXP 141.57, -8.05, -5.4%) reported better than expected earnings and reaffirmed FY23 guidance, but still sold off amid concerns about the potential for a future deterioration in credit quality.
The major indices settled near their worst levels of the day, which left the S&P 500 below its 200-day moving average (4,233). Many stocks participated in the downside move that was led by the mega cap stocks. The Vanguard Mega Cap Growth ETF (MGK) fell 1.5% while the market-cap weighted S&P 500 declined 1.3%. The Invesco S&P 500 Equal Weight ETF (RSP) dropped 1.3%.
Eight of the 11 S&P 500 sectors closed down by at least 1.0%. The defensive-oriented consumer staples (-0.4%) and health care (-0.4%) sectors saw the slimmest declines. On the flip side, the energy (-1.7%) and information technology (-1.7%) sectors logged the steepest losses.
There was no U.S. economic data of note today and there is no data of note on Monday.
Nasdaq Composite: +24.1% YTD
S&P 500: +10.0% YTD
Dow Jones Industrial Average: -0.1% YTD
S&P Midcap 400: -1.5% YTD
Russell 2000: -4.6% YTD