Closing Stock Market SummaryThe S&P 500 lost 0.3% on Monday, closing at session lows amid a lack of buying conviction. The Dow Jones Industrial Average declined 0.4%, the Nasdaq Composite declined 0.4%, and the Russell 2000 declined 0.3%.
The lack of conviction was understandable considering that there was no reported progress on the U.S.-China trade front ahead of the Dec. 15 tariffs, which would presumably upset the market if they went into effect without a Phase One deal. There is still some time left this week to strike a deal, but the trade uncertainty helped keep risk sentiment in check.
Losses were made most prevalent in the S&P 500 health care (-0.7%), utilities (-0.5%), and information technology (-0.5%) sectors. The latter was pressured by Apple (AAPL 266.92, -3.79, -1.4%), which pulled back from record territory. Conversely, the consumer staples (+0.2%), real estate (+0.1%), and consumer discretionary (+0.1%) sectors finished higher.
Other key events this week will include policy decisions from both the Fed and ECB, a UK election, and reports on consumer prices and retail sales for November. Strikingly, the CBOE Volatility Index spiked 16.5% to 15.86, as demand for downside protection increased in anticipation for any disappoints.
Corporate news didn't move the needle, but M&A activity and analyst recommendations did contribute to some notable stock reactions.
In the biotech space, ArQule (ARQL 19.71, +10.04, +103.9%) agreed to be acquired by Merck (MRK 88.72, -0.13, -0.2%) for about $2.7 billion in cash. Synthorx (THOR 67.71, +42.68, +170.5%) agreed to be acquired by French company Sanofi (SNY 45.30, -0.73, -1.6%) for about $2.4 billion in cash. Evidently, both deals came at handsome premiums.
Apple suppliers Qorvo (QRVO 108.44, +1.82, +1.7%) and Skyworks Solutions (SWKS 103.23, +1.87, +1.8%) outperformed after Bank of America/Merrill Lynch "double upgraded" the stocks to Buy from Underperform due to their 5G growth potential.
U.S. Treasuries finished the session relatively unchanged. The 2-yr yield declined one basis point to 1.62%, and the 10-yr yield declined one basis point to 1.83%. The U.S. Dollar Index declined 0.1% to 97.64. WTI crude declined 0.4%, or $0.23, to $58.97/bbl.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive the NFIB Small Business Optimism Index for November and the revised Q3 readings for Productivity and Unit Labor Costs on Tuesday.
- Nasdaq Composite +29.9% YTD
- S&P 500 +25.1% YTD
- Russell 2000 +20.9% YTD
- Dow Jones Industrial Average +19.6% YTD