Closing Stock Market Summary
The stock market had a weak showing. The S&P 500 (-0.7%), Dow Jones Industrial Average (-1.0%), and Russell 2000 (-1.8%) extended this week's losses while the Nasdaq Composite gave back yesterday's modest gain and then some, sliding 1.0%. The major indices closed off their session lows thanks to some afternoon improvement with no specific catalyst.
Today's selling was driven by normal consolidation activity following a strong start to the year for many stocks. Another jump in market rates as participants continue to rethink rate cuts amid solid economic data and sticky inflation figures also played an integral role in today's trade. The 10-yr note yield rose another four basis points today to 4.37%.
Outsized losses in health insurers also contributed to the negative bias after the CMS left its originally proposed payment rate increase for Medicare Advantage plans for 2024-2025 unchanged at 3.70% against expectations for an increase. Humana (HUM 304.33, -47.12, -13.4%), CVS Health (CVS 73.82, -5.74, -7.2%), and UnitedHealth (UNH 458.14, -31.56, -6.4%) were the worst performing stocks in the S&P 500.
Retailers were another weak area in the market following after disappointing quarterly results and outlook from PVH Corp (PVH 108.68, -31.05, -22.2%) that stirred some uncertainty about consumer spending activity. PVH is not an S&P 500 component, but many retailers pulled back in sympathy and the SPDR S&P Retailer ETF (XRT) settled 2.8% lower.
The S&P 500 health care (-1.6%) and consumer discretionary (-1.3%) sectors were the worst performers today while the energy sector outperformed, jumping 1.3%. This action was related to commodity prices. WTI crude oil futures climbed 1.7% to $85.18/bbl amid geopolitical tension in the Middle East.
- S&P 500:+9.1% YTD
- Nasdaq Composite: +8.2% YTD
- S&P Midcap 400: +7.4% YTD
- Dow Jones Industrial Average: +3.9% YTD
- Russell 2000: +1.9% YTD
Reviewing today's economic data:
- February Factory Orders 1.4% (consensus 1.0%); Prior was revised to -3.8% from -3.6%
- The key takeaway from the report is that there was a pickup in new orders in February for durable and nondurable goods, demonstrating that there has not been a lingering drop-off in demand.
- February JOLT - Job Openings 8.756 mln; Prior was revised to 8.748 mln from 8.863 mln
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior -0.7%)
- 8:15 ET: March ADP Employment Change (consensus 150,000; prior 140,000)
- 10:30 ET: Weekly crude oil inventories (prior +3.17 mln)