Closing Stock Market SummaryThe S&P 500 gained 0.8% on Wednesday, guided by renewed leadership in the mega-cap/growth stocks at the expense of the cyclical stocks that had outperformed recently. The Nasdaq Composite, powered by its mega-cap components, rose 2.1%, while the Dow Jones Industrial Average (-0.1%) and Russell 2000 (-0.01%) closed fractionally lower.
The market's outlook in having improved economic and earnings growth in 2021 remained intact, but the current circumstances appeared to temper enthusiasm amid an absence of positive catalysts. Namely, the record number of daily coronavirus cases/hospitalizations in the U.S. and the sizable monthly gains in the cyclical sectors despite this.
In turn, the materials (-1.4%), industrials (-0.9%), energy (-0.8%), and financials (-0.5%) sectors succumbed to minor profit-taking interest. Fortunately, the market was able to withstand the profit taking in cyclical stocks since cash appeared to flow back into the influential technology stocks and other defensive-oriented sectors.
Specifically, the information technology (+2.4%) and consumer discretionary (+1.5%) sectors meaningfully outperformed the broader market, followed by respectable gains in the consumer staples (+0.9%) and real estate (+0.8%) sectors.
The S&P 500 had a good shot at closing at a new high today, briefly surpassing its Sept. 2 closing high (3580.84), but the inability to stay above the prior closing high was a technical factor that worked against trading sentiment.
Separately, Goldman Sachs remained bullish on equities, forecasting the S&P 500 to hit 4300 by the end of 2021. The call was based on expectations that a COVID-19 vaccine would reopen the economy and a divided government would provide stability and no increase in taxes.
The U.S. Treasury market was closed for Veterans Day, leaving the 10-yr yield at 0.98% following yesterday's settlement price. The U.S. Dollar Index increased 0.3% to 92.99. WTI crude futures increased 0.3%, or $0.12, to $41.49/bbl.
Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which decreased 0.5% following a 3.8% increase in the prior week. Looking ahead, investors will receive the Consumer Price Index for October, the weekly Initial and Continuing Claims report, and the Treasury Budget for October on Thursday.
- Nasdaq Composite +31.4% YTD
- S&P 500 +3.9% YTD
- Dow Jones Industrial Average +3.0% YTD
- Russell 2000 +4.1% YTD