Closing Stock Market Summary
Today's trade looked a lot different in the early going compared to where things ended up. The Russell 2000 was up 0.9% at its early session high; the S&P 500 was up 0.2% at its high of the day; and the Nasdaq Composite was up 0.4% at its intraday high.
The market saw an abrupt reversal in afternoon trading that happened without a news catalyst. There was some talk that trading activity in zero-day options hastened the retreat, but in any case, the major indices were all overdue for a pullback after their huge run from late October and also likely fell prone to general profit-taking activity.
The afternoon slide left the major indices near their worst levels of the session with losses ranging from 1.3% to 1.9%. The S&P 500 closed just below the 4,700 level, which leaves the index up 14.1% from its low close on October 27 (4,117).
Just about everything came along for the retreat. The equal-weighted S&P 500 declined 1.7%, and the A-D line favored decliners by greater than 3-to-1 margin at the NYSE and a greater than 2-to-1 margin at the Nasdaq.
The only S&P 500 sector that declined less than 1.0% was communication services (-0.1%). A gain in Alphabet (GOOG 139.66, +1.56, +1.1%) related to a report from The Information that it is aiming to reorganize its advertising sales unit provided support to the sector.
The consumer staples (-2.0%) and utilities (-2.0%) sectors saw the steepest declines. The industrial sector fell 1.6%, due in part to a big loss in FedEx (FDX 246.25, -33.75, -12.1%) following its disappointing FY24 revenue guidance.
Geopolitical angst was a part of the market narrative today, which didn't move stocks that much, but contributed to buying interest in Treasuries. Bloomberg report that the U.S. and its allies are considering strikes against Houthi rebels in Yemen following their disruption of Red Sea shipping activity.
The 2-yr note yield fell ten basis points to 4.35% and the 10-yr note yield declined four basis points to 3.88%.
- Nasdaq Composite: +41.2%
- S&P 500: +22.4%
- Russell 2000: +12.6%
- S&P Midcap 400: +12.8%
- Dow Jones industrial Average: +11.9%
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index -1.5%; Prior 7.4%
- Q3 Current Account Balance -$200.3 bln ( consensus -$201.0 bln); Prior was revised to -$216.8 bln from -$212.1 bln
- December Consumer Confidence 110.7 ( consensus 104.0); Prior was revised to 101.0 from 102.0
- The key takeaway from the report is the recognition that there was renewed optimism across all ages and household income levels with attention being paid to improved inflation trends, business conditions, and job availability.
- November Existing Home Sales 3.82 mln (consensus 3.80 mln); Prior 3.79 mln
- The key takeaway from the report is that sales of existing homes continue to be crimped by high mortgage rates, high selling prices, and limited inventory; however, the recent drop in mortgage rates is expected to be a driver of stronger sales activity in December. Existing home sales are counted when closed. New home sales are counted when contracts are signed.
Thursday's economic calendar features:
- 08:30 ET: Weekly Initial Jobless Claims ( consensus 218K; Prior 220K) and Continuing Jobless Claims (Prior 1876K)
- 08:30 ET: Q3 GDP - Third Estimate ( consensus 5.2%; Prior 5.2%) and Q3 GDP Deflator - Third Estimate (Briefing.com consensus 3.6%; Prior 3.6%)
- 08:30 ET: December Philadelphia Fed Index ( consensus -3.0; Prior -5.9)
- 10:00 ET: November Leading Indicators ( consensus -0.4%; Prior -0.8%)
- 10:30 ET: EIA Natural Gas Inventories (Prior -55 bcf)