Closing Stock Market Summary
The stock market opened to broad buying activity that had the major indices building on yesterday's gains. The initial upside moves were driven by ongoing strength in the mega cap space, along with some relief that the February employment report went the market's way in terms of corroborating the soft landing narrative.
Nonfarm payrolls increased by a better-than-expected 217,000 following a downwardly revised 229,000 increase in January, the unemployment rate rose to 3.9% from 3.7%, and average hourly earnings growth was smaller than expected at 0.1% month-over-month.
The major indices quickly rolled over, though, coinciding with some mega cap names gave back their early gains due to profit-taking activity. NVIDIA (NVDA 875.28, -51.41, -5.6%), which had been up as much as 5.1% in the early going, and Meta Platforms (META 505.95, -6.24, -1.2%), which had been up as much as 2.2%, were losing standouts in that respect.
Weakness in the semiconductor space also contributed to the index level rollover. The PHLX Semiconductor Index (SOX) declined 4.0% today, due in part to the loss in NVIDIA, along with a sharp earnings-related decline in shares of Broadcom (AVGO 1308.72, -98.29, -7.0%).
The "rest" of the market held up better than the mega cap and semiconductor spaces, but many stocks finished lower after selling picked up the afternoon. The Invesco S&P 500 Equal Weight ETF (RSP) registered a 0.1% decline.
The increase in selling activity was related to a lingering sense that the market is due for a pullback with major indices and many individual names trading near all-time highs.
Still, selling was relatively modest and the A-D line was positive at the NYSE. Six of the 11 S&P 500 sectors finished lower and four of them logged a gain. The real estate (+1.1%) and energy (+0.4%) sectors saw the largest gains while the information technology sector was the worst performer by a decent margin, falling 1.8%.
The next worst performer was consumer staples, which fell 0.8% due in part to a loss in shares of Costco (COST 725.56, -60.03, -7.6%) after reporting quarterly results.
The 2-yr note yield declined two basis points today, and four basis points this week, to 4.49%. The 10-yr note yield was unchanged today, but declined nine basis points this week to 4.09%.
- S&P 500: +7.4% YTD
- Nasdaq Composite: +7.2% YTD
- S&P Midcap 400: +6.1% YTD
- Dow Jones Industrial Average: +2.7% YTD
- Russell 2000: +2.7% YTD
Reviewing today's economic data:
- February Nonfarm Payrolls 275K (consensus 195K); Prior was revised to 229K from 353K; February Nonfarm Private Payrolls 223K (consensus 150K); Prior was revised to 177K from 317K; February Avg. Hourly Earnings 0.1% (consensus 0.3%); Prior was revised to 0.5% from 0.6%; February Unemployment Rate 3.9% (consensus 3.7%); Prior 3.7%; February Average Workweek 34.3 (consensus 34.3); Prior was revised to 34.2 from 34.1
- The key takeaway from the report, accounting for the fresh data and the revised data, is that it fits the soft landing/no landing narrative that is integral for a positive earnings growth outlook. In that regard, then, it has provided some validation for the stock market's run to record highs.
Looking ahead, there is no US economic data of note on Monday.