Closing Stock Market Summary
Today's trade had a negative bias. The A-D line favored decliners by a 7-to-3 margin at the NYSE and the equal weighted S&P 500 closed down 0.9%. Mega cap stocks, which benefitted from some safe-haven buying activity, acted as support for the three major indices.
The Nasdaq Composite closed with a 0.3% gain; the S&P 500 registered a 0.1% decline; and the Dow Jones Industrial Average fell 0.2%.
Buyers were presumably drawn to mega caps on renewed concerns about global growth prospects, which also sent Treasury yields lower today. The 2-yr note yield fell nine basis points to 4.56% and the 10-yr note yield declined 10 basis points to 4.18%.
A Moody's downgrade of China's credit outlook to Negative from Stable that was tied in part to concerns about structurally weaker growth prospects and an October JOLTS - Job Openings Report that featured the lowest number of job openings (8.733 million) since March 2021 were the primary factors that stoked worries about an economic slowdown.
The latter news overshadowed a slight uptick in the ISM Non-Manufacturing Index for November to 52.7% from 51.8%.
Just about everything, aside from mega caps, participated in today's retreat. Eight of the 11 S&P 500 sectors registered a decline while the information technology (+0.8%), consumer discretionary (+0.3%), and communication services (+0.2%) sectors, which all house mega cap constituents, closed with gains.
Small cap stocks underperformed their larger peers in another manifestation of growth concerns. The Russell 2000 closed with a 1.4% decline.
- Nasdaq Composite: +36.0%
- S&P 500: +19.0%
- Dow Jones industrial Average: +9.0%
- S&P Midcap 400: +7.4%
- Russell 2000: +5.4%
Reviewing today's economic data:
- November S&P Global US Services PMI - Final 50.8; Prior 50.6
- November ISM Non-Manufacturing PMI 52.7% (consensus 52.4%); Prior 51.8%
- The key takeaway from the report is that the largest sector of the U.S. economy saw a pickup in activity in November that is supportive of the soft landing view.
- October JOLTS -Job Openings 8.773 mln; Prior was revised to 9.350 mln from 9.553 mln
Wednesday's economic calendar features:
- 07:00 ET: MBA Mortgage Applications Index (Prior 0.3%)
- 08:15 ET: November ADP Employment Change (consensus 127K; Prior 113K)
- 08:30 ET: Q3 Productivity - Revised (consensus 4.8%; Prior 4.7%) and Unit Labor Costs (consensus -0.8%; Prior -0.8%)
- 08:30 ET: October Trade Balance (consensus -$64.4B; Prior -$61.5B)