Closing Stock Market SummaryThe session started on a more upbeat note, but the three major indices all closed in negative territory. The S&P 500 and Nasdaq settled near their worst levels of the day while the Dow Jones Industrial Average closed just below its flat line.
Weak mega stocks, which were trading down due to ongoing consolidation efforts, were integral to index level performance. The Vanguard Mega Cap Growth ETF (MGK) closed with a 1.3% loss while the market-cap weighted S&P 500 fell 0.5%.
Tesla (TSLA 241.05, -15.55, -6.1%), which was downgraded to Neutral from Buy at Goldman Sachs, and Alphabet (GOOG 119.09, -3.93, -3.2%), which was downgraded to Neutral from Buy at UBS, were some of the worst performers from the space.
There was some underlying strength, though, as evidenced by the 0.6% gain in the Invesco S&P 500 Equal Weight ETF (RSP). Also, small and mid cap stocks were relative outperformers. The Russell 2000 closed with a modest 0.1% gain and the S&P Mid Cap 400 rose 0.8%.
Roughly half of the 11 S&P 500 sectors closed with gains. Real estate (+2.2%) led the pack by a wide margin followed by energy (+1.7%) and materials (+1.0%). Meanwhile, the communication services (-1.9%), consumer discretionary (-1.3%), and information technology (-1.0%) sectors fell to the bottom of the pack, dragged down by their respective mega cap components.
The consumer discretionary sector was also weighed down by a sizable loss in Carnival Corp. (CCL 14.60, -1.20, -7.6%). CCL had risen 80% since late April, but lost ground today after an earnings report that was better than expected.
In other corporate news, Dow component IBM (IBM 131.34, +1.91, +1.5%) agreed to buy Apptio for $4.6 billion cash.
Other factors driving the mixed price action, aside from weak mega caps and consolidation efforts, included some possible quarter-end rebalancing in favor of bonds, along with some geopolitical angst.
That geopolitical angst was part of the market narrative due to reports over the weekend indicating that Yevgeny Prigozhin, leader of the mercenary Wagner Group, led an incursion into Russia that has been described as a coup attempt. It ended quickly, though, after Prigozhin accepted asylum in Belarus.
Treasuries settled with gains. The 2-yr note yield fell one basis point to 4.74% and the 10-yr note yield fell two basis points to 3.72%.
- Nasdaq Composite: +27.4% YTD
- S&P 500: +12.7% YTD
- Russell 2000: +3.5% YTD
- S&P Midcap 400: +4.3% YTD
- Dow Jones Industrial Average: +1.7% YTD
There was no U.S. economic data of note today, but it's a busy week of data that will culminate with the release of the Personal Income and Spending report at 8:30 a.m. ET on Friday that will feature the Fed's preferred inflation gauge (the PCE and core-PCE Price Indices).
Looking ahead to Tuesday, market participants will receive the following economic data:
- 8:30 ET: May Durable Orders (consensus -1.0%; prior 1.1%) and Durable Orders -ex transportation ( consensus 0.0%; prior -0.2%)
- 9:00 ET: April FHFA Housing Price Index (prior 0.6%) and April S&P Case-Shiller Home Price Index (Briefing.com consensus -2.5%; prior -1.1%)
- 10:00 ET: June Consumer Confidence ( consensus 103.8; prior 102.3) and May New Home Sales ( consensus 665,000; prior 683,000)