Closing Stock Market Summary
The stock market started this short week on a soft note. The Nasdaq Composite logged a 0.2% decline, the S&P 500 fell 0.4%, and the Dow Jones Industrial Average declined 0.6%. Small cap stocks were relative laggards, leading the Russell 2000 to log a 1.2% loss.
A jump in market rates contributed to the selling activity in the stock market today. The 2-yr note yield settled seven basis points higher at 4.22% and the 10-yr note yield jumped 12 basis points to 4.07% after falling to 3.99% earlier.
This price action was partially a reaction to comments from Fed Governor Waller (FOMC voter), who indicated that the Fed could begin cutting rates this year, but reiterated the Fed's estimate for three cuts rather than six cuts that the market expects.
The fed funds futures market is now pricing in a 66.9% probability of a 25 basis points rate cut at the March FOMC meeting versus an 81% probability on Friday, according to the CME FedWatch Tool.
Some hesitation in front of the bulk of Q4 earnings also contributed to the downbeat price action. Goldman Sachs (GS 380.45, +2.70, +0.7%), Morgan Stanley (MS 85.97, -3.73, -4.2%), and PNC (PNC 149.02, +0.10, +0.1%) were the latest names to report quarterly results, garnering mixed responses.
On a related note, the S&P 500 financial sector was among the worst performers, dropping 0.6%. Other laggards included follow economically-sensitive sectors like energy (-2.4%), materials (-1.2%), and industrials (-1.0%).
The lone sector to close with a gain was information technology (+0.4%), which was boosted by gains in Microsoft (MSFT 390.27, +1.80, +0.5%) and NVIDIA (NVDA 563.82, +16.72, +3.1%).
The sector was also boosted by news that ANSYS (ANSS 327.42, -19.06, -5.5%) will be acquired by Synopsys (SNPS 509.68, +15.28, +3.1%) in a transaction that values ANSYS at $35 billion.
Today's economic data was limited to the NY Empire State Manufacturing Index, which doesn't normally move the market that much, but plunged to -43.7 in January from -14.5 in December.
- S&P 500: -0.1%
- Nasdaq Composite: -0.5%
- Dow Jones Industrial Average: -0.9%
- S&P Midcap 400: -2.5%
- Russell 2000: -4.9%
Looking ahead, Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior 9.9%)
- 8:30 ET: December Retail Sales (consensus 0.4%; prior 0.3%), Retail Sales ex-auto (prior 0.2%), December Import Prices (prior -0.4%), Import Prices ex-oil (prior 0.2%), Export Prices (prior -0.9%), and Export Prices ex-agriculture (prior -1.0%)
- 9:15 ET: December Industrial Production (consensus -0.1%; prior 0.2%) and Capacity Utilization (consensus 78.8%; prior 78.8%)
- 10:00 ET: November Business Inventories (prior -0.1%) and January NAHB Housing Market Index (consensus 38; prior 37)