Closing Stock Market Summary
Today's trade featured mostly positive price action after a soft start to the day. Buying activity picked up at 10:00 ET after the release of a softer than expected ISM Services PMI for March. The major indices closed off session highs, though, after some heavily-weighted names retreated in front of the close.
Microsoft (MSFT 420.45, -0.99, -0.2%), which had been up as much as 0.4%, and NVIDIA (NVDA 889.64, -4.88, -0.6%), which had been up as much as 1.0%, were influential names that turned lower in the final hour of trading.
Today's positive bias was also supported by a buy-the-dip mentality following a weak start to the week. The recent negative price action was in response to the jump in market rates as participants recalibrated rate cut expectations amid ongoing strength in economic data and sticky inflation numbers. Treasuries also reacted favorably to this morning's soft data, though, which also contributed to the upside bias.
The 10-yr note yield reached 4.42% before the data, but settled at 4.36%, which is one basis point lower than yesterday. The 2-yr note yield hit 4.73% earlier, but settled at 4.68% now, which is down two basis points from yesterday.
Some relative strength in the semiconductor space also contributed to today's bias. The PHLX Semiconductor Index (SOX) climbed 0.3%. Intel (INTC 40.33, -3.61, -8.2%) was a notable exception after outlining a new financial reporting structure to reflect the transition to a foundry operating model, which showed operating losses are expected to peak in 2024.
Four of the S&P 500 sectors closed with declines while seven settled higher. The energy sector was among the outperformers, rising alongside oil prices. WTI crude oil futures extended recent gains ($85.44/bbl, +0.26, +0.3%) that have been predicated on increased geopolitical tensions in the Middle East.
- S&P 500:+9.3% YTD
- Nasdaq Composite: +8.4% YTD
- S&P Midcap 400: +7.7% YTD
- Dow Jones Industrial Average: +3.8% YTD
- Russell 2000: +2.4% YTD
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index -0.6%; Prior -0.7%
- March ADP Employment Change 184K (consensus 150K); Prior was revised to 155K from 140K
- March S&P Global US Services PMI - Final 51.7; Prior 52.3
- March ISM Non-Manufacturing PMI 51.4% (consensus 52.6%); Prior 52.6%
- The key takeaway from the report is the recognition that the expansion in the services sector -- the largest swath of the U.S. economy -- slowed in March, substantiated by a slowdown in the pace of increase in prices and new orders.
Thursday's economic calendar features:
- 8:30 ET: Weekly Initial Claims (consensus 214,000; prior 210,000), Continuing Claims (prior 1.819 mln), and February Trade Balance (consensus -$66.0 bln; prior -$67.4 bln)
- 10:30 ET: Weekly natural gas inventories (prior -36 bcf)