Closing Stock Market SummaryToday's session started on a mostly positive note. Relative weakness in the mega cap space limited index performance throughout the session, but buying activity was more robust under the surface in the early going. The market-cap weighted S&P 500 was up 0.5% at its high today, but closed with a 0.4% loss. The Invesco S&P 500 Equal Weight ETF (RSP) was up 0.9% at its best level of the day, but closed the session nearly unchanged from yesterday.
Many stocks rolled over in the afternoon trade with no specific catalyst to account for the price action. Still, the market held up okay when considering how far stocks climbed in a relatively short period of time. At its high today, the equal-weighted S&P 500 was up 13% from its October 27 low. The Russell 2000 had been up as much as 1.8% at its high today before closing with a 0.2% decline.
Shortly after the open, advancers had a better than 3-to-1 lead over decliners at the NYSE. By the close, decliners had an 11-to-10 lead over advancers at the NYSE. Only three of the S&P 500 sectors registered a gain -- utilities (+1.4%), industrials (+0.5%), and health care (+0.1%) -- while the energy sector (-1.6%) saw the largest decline by a wide margin.
The energy sector was responding to the sharp drop in oil prices. WTI crude oil futures settled below $70.00/bbl at $69.37/bbl.
The early upside moves were the result of an inclination to buy on weakness after yesterday's losses, which was supported by another drop in the 10-yr yield in response to this morning's economic data. The 10-yr note yield fell five basis points today to 4.12%, but the 2-yr note yield climbed five basis points to 4.61%.
Briefly, the ADP Employment Change Report for November showed 103,000 jobs were added to private-sector payrolls following a downwardly revised 106,000 (from 113,000) in October. The other reports featured an upwardly revised 5.2% increase in Q3 Productivity (from 4.7%), a downwardly revised 1.2% decline (from -0.8%) in unit labor costs, and a widening in the October trade deficit to $64.3 billion from an upwardly revised -$61.2 billion (from -$61.5 billion) in September that was the result of exports being $2.6 billion less than September exports and imports being $0.5 billion more than September imports.
- Nasdaq Composite: +35.2%
- S&P 500: +18.5%
- Dow Jones industrial Average: +8.8%
- S&P Midcap 400: +7.2%
- Russell 2000: +5.2%
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index 2.8%; Prior 0.3%
- November ADP Employment Change 103K (consensus 127K); Prior was revised to 106K from 113K
- Q3 Productivity-Rev. 5.2% (consensus 4.8%); Prior 4.7%; Q3 Unit Labor Costs-Rev. -1.2% (consensus -0.8%); Prior -0.8%
- The key takeaway from the report is the connection between rising productivity and falling unit labor costs. Each is headed in the right direction for the Fed's purposes, which means interest rates should continue to move in the right direction for the market's purposes.
- October Trade Balance -$64.3 bln (consensus -$64.4 bln); Prior was revised to -$61.2 bln from -$61.5 bln
- The key takeaway from the report is the different paths taken by exports and imports, as that fits with a narrative that underscores weaker activity abroad versus what has been seen in the U.S.
Thursday's economic calendar features:
- 8:30 ET: Weekly Initial Claims (Briefing.com consensus 223,000; prior 218,000) and Continuing Claims (prior 1.927 mln)
- 10:00 ET: October Wholesale Inventories (consensus -0.2%; prior 0.2%)
- 10:30 ET: Weekly natural gas inventories (prior +10 bcf)
- 15:00 ET: October Consumer Credit (consensus $9.0 bln; prior $9.0 bln)