Closing Market Summary: Mixed Finish to Monday's SessionStocks kicked off the week with a quiet performance on Monday that left the broad-based S&P 500 a tick below its unchanged mark (-0.1%). The Dow Jones Industrial Average took a more substantial hit (-0.6%), while the Nasdaq Composite outperformed (+0.4%), climbing to a new all-time high for the second consecutive session.
Noteworthy news was in short supply on Monday, leading to lighter-than-usual trading volume. Investors continued to digest the February jobs report, which prompted a big rally on Friday, and started looking ahead to this week's batch of influential economic data--beginning with the Tuesday release of the Consumer Price Index for February (consensus +0.2%).
The 11 S&P sectors finished Monday pretty evenly mixed; six declined while five advanced.
Industrials (-1.2%) was the weakest sector by a considerable margin, with more than three quarters of its components finishing in the red. Dow components Boeing (BA 344.19, -10.33), Caterpillar (CAT 154.50, -3.75), and United Tech (UTX 131.50, -2.57) showed particular weakness, losing between 1.9% and 2.9%.
Conversely, technology (+0.3%) was among the top-performing sectors, with chipmakers setting the pace. Broadcom (AVGO 262.84, +9.06) advanced 3.6% following a Wall Street Journal report that Intel (INTC 51.52, -0.67) might look to acquire Broadcom, which is currently in pursuit of an acquisition itself; namely, the company is seeking to acquire Qualcomm (QCOM 62.81, -0.22). A combined Broadcom/Qualcomm would pose a serious competitive threat to Intel, hence Intel's desire to enter the mix.
Meanwhile, fellow chipmaker Micron (MU 59.37, +4.78) spiked 8.8% after its target price was raised to $100 from $55 at Nomura Instinet.
In the bond market, U.S. Treasuries moved modestly higher on Monday, pushing yields down across the curve; the benchmark 10-yr yield slipped two basis points to 2.87%. A $21 billion 10-yr note auction drew a high yield of 2.889% on a bid-to-cover of 2.50--slightly above the average of the prior 12 auctions.
Economic data was limited to the Treasury Budget for February, which showed a deficit of $215.2 billion (consensus -$216.0 billion) versus a deficit of $192.0 billion for February 2017. The Treasury Budget data is not seasonally adjusted, so the February deficit cannot be compared to the $49.2 billion surplus registered in January.
In Washington, reports indicated that longtime CNBC personality Larry Kudlow is the front runner to replace Gary Cohn as President Trump's top economic advisor. Mr. Kudlow is a proponent of free trade and served in the Office of Management and Budget during the Reagan administration.
- Nasdaq Composite: +9.9% YTD
- S&P 500: +4.1% YTD
- Dow Jones Industrial Average: +1.9% YTD
- Russell 2000: +4.3% YTD
