Closing Market Summary: Energy Sector Leads Stocks Higher
The stock market ended Thursday on a modestly higher note after enduring a volatile session. The S&P 500 added 0.5% after finding support at its 50-day moving average (2,076) while small caps struggled with the Russell 2000 sliding 0.4%.
Equity indices rallied out of the gate after index futures erased their overnight losses. However, the cash market did not escape without making its own appearance in the red, but the morning pullback was limited in scope. The S&P 500 briefly dipped below its 50-day moving average and returned into the green in short order. The bulk of the afternoon saw the index range near its unchanged level, but the final hour of action featured a surge to a fresh high for the day.
Eight of ten sectors registered gains with all six cyclical groups ending higher. The growth-sensitive bunch was led by energy (+1.6%), which held the lead throughout the day. The sector held its own while crude oil slumped from its intraday high, but still rose 0.7% to $50.81/bbl.
Meanwhile, the remaining cyclical sectors posted slimmer gains with materials (+0.4%) ending ahead of the broader market. Relative strength among steelmakers and chemical-related names overshadowed Alcoa's (AA 13.22, -0.45) 3.3% decline after the company reported a two-cent beat on below-consensus revenue. In addition, Alcoa said it expects aluminum demand to grow by 6.5% in 2015 after revising its 2014 global demand growth to 9.0% from 7.0%.
Elsewhere among cyclical sectors, technology (+0.3%) lagged in the early going, but narrowed the gap by the close. Intel (INTC 31.24, -0.07) shed 0.2% after it was reported the company is no longer looking to acquire Altera (ALTR 43.33, +1.33) after the two could not agree on a purchase price. Strikingly, Altera was down more than 7.0% in the early going, but managed to end the day higher by 3.2%.
Also of note, the discretionary sector (+0.1%) struggled to keep pace amid weakness in retail names in reaction to disappointing same store sales in March. The SPDR S&P Retail ETF (XRT 101.11, -0.40) lost 0.4%.
Over on the countercyclical side, the health care sector (+0.8%) outperformed throughout the session while biotechnology could not overtake its early high. Still, the iShares Nasdaq Biotechnology ETF (IBB 353.06, +1.05) added 0.3%.
Treasuries retreated throughout the day with the 10-yr yield climbing six basis points to 1.96%.
Today's participation was comparable to recent sessions with more than 675 million shares changing hands at the NYSE floor.
Economic data was limited to initial claims and wholesale inventories:
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The initial claims level increased to 281,000 for the week ending April 4 from a downwardly revised 267,000 (from 268,000) for the week ending March 28
- The consensus expected an increase to 285,000
- The four-week moving average has dropped to 282,250 from 285,250, representing the lowest level since June 2000
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Wholesale inventories increased 0.3% in February after increasing an upwardly revised 0.4% (from 0.3%) in January
- The consensus expected an increase of 0.2%
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Wholesale durable goods inventories increased 0.3% in February, down from a 0.7% increase in January
- Automotive inventories, up 2.4%, offset declines in most other sectors