Closing Stock Market Summary
The market exhibited mixed action again. The major indices traded in tight ranges through the morning trade before selling picked up in the afternoon. The Nasdaq Composite registered a 0.2% decline, the S&P 500 logged a 0.3% loss, and the Dow Jones Industrial Average closed 0.5% lower.
This morning's muted price action had a similar feel to other sessions this week. That is to say, a wait-and-see mindset in front of NVIDIA's (NVDA 949.50, -4.36, -0.5%) earnings after Wednesday's close kept the broader market in check.
Selling picked up, however, in response to the Minutes for the April 30-May 1 FOMC meeting. The minutes did not contain anything too surprising and largely echoed Fed commentary since the meeting. The minutes drew attention to asset valuations, which likely fueled some profit taking activity.
Downside moves were relatively modest in many stocks. Target (TGT 143.27, -12.51, -8.0%) was an exception, sliding 8.0% after disappointing earnings and outlook.
Analog Devices (ADI 240.16, +23.52, +10.9%) and First Solar (FSLR 251.75, +39.64, +18.7%) were winning standouts today. The former reported earnings and the latter traded up on a Bloomberg report that China's solar industry body wants an end to the price war.
Only three S&P 500 sectors closed with gains while three sectors declined more than 1.0%.
The 10-yr note yield settled two basis points higher at 4.43% and the 2-yr note yield rose five basis points to 4.88%. This price action was in response to the minutes, but also a hotter-than-expected April CPI report from the U.K., a weaker-than-expected Existing Home Sales report for April.
- Nasdaq Composite: +11.9% YTD
- S&P 500:+11.3% YTD
- S&P Midcap 400: +7.5% YTD
- Dow Jones Industrial Average: +5.3% YTD
- Russell 2000: +2.7% YTD
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index 1.9%; Prior 0.5%
- April Existing Home Sales 4.14 mln (consensus 4.20 mln); Prior was revised to 4.22 mln from 4.19 mln
- The key takeaway from the report is that sales activity was much stronger in the upper-end of the market (homes priced $1 million or more), with inventory up 34% year-over-year and sales up 40% year-over-year, underscoring the idea that there is pent-up demand that can be unleashed when more inventory for lower-priced homes becomes available.
- Weekly EIA Crude Oil Inventories +1.83M; prior -2.51M
Thursday's economic calendar features:
- 8:30 ET: Weekly Initial Claims (consensus 219,000; prior 222,000) and Continuing Claims (prior 1.794 mln)
- 9:45 ET: Flash May S&P Global U.S. Manufacturing PMI (prior 50.0) and flash May S&P Global U.S. Services PMI (prior 51.3)
- 10:00 ET: April New Home Sales (consensus 680,000; prior 693,000)
- 10:30 ET: Weekly natural gas inventories (prior +70 bcf)