Closing Stock Market SummaryThe large-cap indices closed slightly lower on Tuesday in a tame session, as investors adopted a wait-and-see mindset for tomorrow's key events. The S&P 500 (-0.2%), Nasdaq Composite (-0.1%), and Dow Jones Industrial Average (-0.3%) declined between 0.1-0.3%, while the Russell 2000 rose 0.6%.
Those key events will include Q3 earnings results from JPMorgan Chase (JPM 165.36, -1.28, -0.8%), the Consumer Price Index for September, and the FOMC Minutes from the September meeting.
Six of the 11 S&P 500 sectors closed lower, with the laggards being the heavily-weighted communication services (-1.1%), information technology (-0.5%), and health care (-0.5%) sectors. Five sectors closed higher, led by the real estate (+1.3%), consumer discretionary (+0.7%), and utilities (+0.7%) sectors with decent gains.
The financials sector (-0.3%) was pressured by some curve-flattening activity in the Treasury market in which the 2s10s spread narrowed by seven basis points. The 2-yr yield rose four basis points to 0.35%, while the 10-yr yield decreased three basis points to 1.58%. The U.S. Dollar Index increased 0.2% to 94.51.
On a related note, today's $58 bln 3-yr note auction was met with weak demand, but the $38 bln 10-yr note reopening saw stronger demand.
Elsewhere, the Dow Jones Transportation Average (+0.9%) saw relative strength following upside Q3 EPS guidance from Matson (MATX 89.57, +6.90, +8.4%) and upwardly revised Q3 revenue guidance from American Airlines (AAL 20.29, +0.16, +0.8%).
Separately, the NY Fed's September Survey of Consumer Expectations showed that short- and medium-term inflation expectations rose to their highest levels since the inception of the survey in 2013. Fed Vice Chair Clarida (FOMC voter) and Atlanta Fed President Bostic (FOMC voter) also acknowledged the elevated inflation pressures in the economy.
Inflation wasn't so much the story today, though, since longer-dated Treasury yields settled lower and WTI crude futures settled higher by only 0.1%, or $0.09, to $80.62/bbl. That might for tomorrow when investors see how much inflation pressures have seeped into consumer prices.
Reviewing Tuesday's economic data:
- Job openings decreased to 10.439 million in August from a revised 11.098 million (from 10.934 million) in July.
- The NFIB Small Business Optimism Index for September decreased to 99.1 from 100.1 in August.
Looking ahead, investors will receive the Consumer Price Index for September, the FOMC Minutes from the September meeting, and the weekly MBA Mortgage Applications Index on Wednesday.
- S&P 500 +15.8% YTD
- Russell 2000 +13.1% YTD
- Dow Jones Industrial Average +12.3% YTD
- Nasdaq Composite +12.2% YTD