Closing Market Summary: S&P 500 Sets Another Record Close on Light Volume
The major averages posted modest gain on Thursday, but the trading day was very quiet once again. The S&P 500 added 0.2% and settled at a new record high while the Nasdaq Composite (+0.4%) outperformed.
Equity indices spent the initial minutes of the session near their flat lines, but they climbed to highs after the Existing Home Sales report for April (5.04 million; consensus 5.24 million) and the May Philadelphia Fed Survey ( 6.7; consensus 8.0) missed estimates. The ensuing advance was accompanied by a rally in Treasuries, suggesting increased expectations that the Federal Reserve will maintain its current dovish stance. Treasuries continued climbing into the afternoon (10-yr yield -6 bps to 2.19%) while the major averages spent the day near their late-morning highs.
Yesterday's session saw relative strength among countercyclical groups, but the opposite was true today as five of six growth-sensitive sectors registered gains while the financial sector (-0.2%) was the lone decliner on the cyclical side. Despite today's retreat, the sector remains higher by 0.6% for the week versus a 0.4% increase for the S&P 500.
Moving on, the energy sector (+0.9%) finished ahead of other cyclical sectors with help from crude oil, which surged 2.9% to $60.70/bbl. The energy component soared after the Energy Information Administration's storage report revealed the third consecutive weekly draw.
Elsewhere among cyclical groups, the industrial sector (+0.5%) received support from transport stocks. The Dow Jones Transportation Average rebounded from recent underperformance, climbing 0.6%, but the bellwether complex remains down 1.5% for the week.
Also of note, the consumer discretionary space (+0.4%) rallied with help from retailers after Best Buy (BBY 35.11, +1.33) and Williams-Sonoma (WSM 78.62, +0.73) reported better than expected results. The two names gained 3.9% and 0.9%, respectively while SPDR S&P Retail ETF (XRT 99.54, +0.54) gained 0.6%.
Over on the countercyclical side, the telecom services sector (+0.7%) displayed strength throughout the day while consumer staples (+0.2%), health care (unch), and utilities (-0.1%) ended near their flat lines.
Today's participation was in-line with recent totals as fewer than 700 million shares changed hands at the NYSE floor.
Economic data included Initial Claims, Leading Indicators, Existing Home Sales, and Philadelphia Fed Survey:
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The initial claims level increased to 274,000 for the week ending May 16 from an unrevised 264,000 while the consensus expected an increase to 270,000
- Despite this week's increase, the four-week moving average fell to 266,250 from 271,750, which is the lowest level since April 2000
- The continuing claims level declined to 2.211 mln for the week ending May 9 from a downwardly revised 2.223 mln (from 2.229 mln) while the consensus expected an increase to 2.250 mln
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The Leading Indicators report for April was up 0.7% while the Briefing.com consensus expected an increase of 0.3%
- The March reading was revised up to 0.4% from 0.2%
- Existing home sales for April were reported to have decreased 3.3% from March to an annualized rate of 5.04 million units while the consensus expected a reading of 5.24 million
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The Philadelphia Fed's Business Outlook Survey dropped to 6.7 in May from 7.5 in April while the consensus expected an increase to 8.0
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Despite the decrease, the general business production growth outlook actually strengthened
- Shipments exited a contraction as the related index increased to 1.0 in May from -1.8 in April
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Despite the decrease, the general business production growth outlook actually strengthened
- Nasdaq Composite +7.5% YTD
- Russell 2000 +4.3% YTD
- S&P 500 +3.5% YTD
- Dow Jones Industrial Average +2.6% YTD