Closing Market Summary: Slightly Lower Following Another Range-Bound Day of TradingFor the second straight day, the S&P 500 ended a range-bound session slightly lower, losing 0.1%. However, the S&P 500 remains within striking distance of its January 26 record high, closing Thursday about 0.7% from that mark. As for the other major averages, the Nasdaq eked out a slim victory, and the Dow shed 0.3%.
The S&P sectors finished Thursday evenly mixed, with decliners outnumbering advancers six to five. Financials (-0.6%), industrials (-0.6%), and energy (-0.9%) -- all of which are considered economically-sensitive sectors -- finished at the bottom of the standings, while the lightly-weighted telecoms space (+1.0%) finished at the top.
CenturyLink (CTL 20.97, +2.43) led the telecom space higher, rallying 13.1% after reporting in-line quarterly results.
Meanwhile, in other earnings news, Viacom (VIAB 30.34, +1.72) jumped 6.0% after beating both top and bottom line estimates, and Roku (ROKU 57.32, +10.07) and Yelp (YELP 48.33, +10.17) spiked 21.3% and 26.7%, respectively, after also reporting their quarterly results.
In general, the latest batch of corporate earnings -- one of the last big batches of the Q2 earnings season -- was met with cheers from investors. However, Canada Goose (GOOS 54.00, -1.91) was an outlier, dropping 3.4% despite beating both top and bottom line estimates.
Away from earnings, Tesla (TSLA 352.45, -17.89) declined 4.8% following reports that the SEC is intensifying its probe of the company after CEO Elon Musk tweeted on Tuesday that he is considering taking the company private. Seagate Tech (STX 51.02, -4.02) also tumbled, losing 7.3%, after Goldman downgraded the data storage company to Sell from Neutral, and Deere (DE 139.83, -4.98) lost 3.4% following cautious commentary from Cleveland Research.
Looking at other markets, U.S. Treasuries rallied on Thursday, sending yields lower across the curve; the benchmark 10-yr yield slid four basis points to 2.94%. The U.S. Dollar Index rose 0.5% to 95.44, touching a new one-year high, and WTI crude futures ticked down 0.2% to $66.81/bbl, marking a new seven-week low.
All three major stock indices will enter Friday's session with weekly gains, although some have more gains than others; the S&P 500 is up 0.5% week-to-date, while the Nasdaq and the Dow hold weekly gains of 1.0% and 0.2%, respectively. If the S&P 500 can hold on, it will mark its sixth straight weekly advance.
Reviewing Thursday's economic data, which included the Producer Price Index for July, weekly Initial Claims, and June Wholesale Inventories:
- Producer prices were flat in July (consensus +0.3%), and core producer prices increased 0.1% (consensus +0.2%). Year-over-year, producer prices are up 3.3% (vs +3.4% in June) and core producer prices have risen 2.7% (vs +2.8% in June).
- The key takeaway from the report is that it showed a moderation in producer price pressures, which will help keep the market grounded in the idea that the Fed can maintain its gradual approach to raising interest rates.
- The latest weekly initial jobless claims count totaled 213,000, while the consensus expected a reading of 220,000. Today's tally was below the revised prior week count of 219,000 (from 218,000). As for continuing claims, they rose to 1.755 million from a revised count of 1.726 million (from 1.724 million).
- The key takeaway from this report is the same it has been for some time: the low level of initial claims activity fits the framework of a tight labor market.
- June Wholesale Inventories rose 0.1% (consensus 0.0%). The May reading was revised to +0.3% from +0.6%.
- The key takeaway from the report is that the pace of sales growth year-over-year continues to exceed the pace of inventories growth, which is a positive dynamic that can eventually help wholesalers regain pricing power if it persists.
Looking ahead, investors will receive both the Consumer Price Index for July and the July Treasury Budget on Friday.
- Nasdaq Composite +14.3% YTD
- Russell 2000 +10.1% YTD
- S&P 500 +6.7% YTD
- Dow Jones Industrial Average +3.2% YTD