Closing Stock Market SummaryThe S&P 500 (-0.3%), Nasdaq Composite (-0.4%), and Dow Jones Industrial Average (-0.2%) closed slightly lower on Monday, as the market struggled to find direction without the leadership of the technology stocks. The large-cap indices, however, did close off session lows while the Russell 2000 (+0.1%) closed higher after starting with a 1.2% decline.
The information technology sector (-0.7%), which is the most heavily-weighted sector in the S&P 500, had a tough day on no discernible news catalyst. Some attributed the weakness to pestering concerns that inflation expectations will continue to drive upwards pressure on long-term interest rates, which in turn would further compress growth-stock valuations.
The muted price action in the Treasury market, however, didn't necessarily scream inflation concerns, suggesting that the tech sector was more in a consolidation phase after rebounding 3.5% over the prior two sessions. The 10-yr yield increased just one basis point to 1.64% while the 2-yr yield was flat at 0.15%. The U.S. Dollar Index declined 0.2% to 90.17.
Elsewhere, the communication services sector (-0.9%) was undercut by its media components after AT&T's (T 31.37, -0.87, -2.7%) WarnerMedia and Discovery (DISCA 33.85, -1.80, -5.1%) agreed to combine in a Reverse Morris Trust transaction. The initial reaction was positive, but it turned out to be a head fake as the media space descended lower throughout the day.
Conversely, the energy (+2.3%), materials (+0.9%), and financials (+0.1%) sectors were the only sectors that closed higher today, giving the session another one of those cyclical tilts.
Energy and material stocks were supported by rising commodity prices. WTI crude futures ($66.23/bbl, +0.90, +1.4%), gold futures ($1867.80/ozt, $29.60, +1.6%), and copper futures ($4.712/lb, $0.06, +1.4%) each rose more than 1.0%.
Separately, Amazon (AMZN 3270.39, +47.49, +1.5%) was in the news flow throughout the day. The company announced the availability of Amazon Music HD for subscribers at no extra cost and announced the launch of a wellness program for its employees. In addition, Business Insider reported that Amazon is planning a new "Diagnostic" division to offer at-home medical tests.
Reviewing Monday's economic data:
- The NAHB Housing Market Index for May was unchanged at 83.0 (consensus 83.0).
- The Empire State Manufacturing Survey decreased to 24.3 in May (consensus 25.0) from 26.3 in April.
Looking ahead, investors will receive Housing Starts and Building Permits for April on Tuesday.
- Russell 2000 +12.8% YTD
- Dow Jones Industrial Average +12.2% YTD
- S&P 500 +10.8% YTD
- Nasdaq Composite +3.8% YTD