Closing Stock Market SummaryThe stock market opened decidedly weak, carrying over yesterday's downside momentum, as investors looked to take some money off the table after a big run recently. Concerns about the Fed raising rates higher than expected for longer than expected also contributed to the early weakness.
Those concerns were stoked again today by Fed Governor Michelle Bowman (FOMC voter) saying that rate hikes should continue until there is "a lot more" progress on inflation, according to Reuters.
The general tone started to shift, however, as market rates backed down from overnight highs. The 2-yr note yield, which hit 4.71% overnight, settled the session down two basis points to 4.61%. The 10-yr note yield, which hit 3.92% overnight, also fell two basis points today to 3.83%.
Ultimately, the main indices closed the session near their best levels of the day, which had the Dow Jones Industrial Average and Russell 2000 sporting slim gains. The S&P 500 and Nasdaq had their upside moves limited somewhat by downside pressure from the mega cap space. The Vanguard Mega Cap Growth ETF (MGK) closed down 0.9% versus a 0.2% loss in the Invesco S&P 500 Equal Weight ETF (RSP) and a 0.3% loss in the S&P 500.
Market internals reflected the shift in sentiment today. Shortly after the open, decliners led advancers by a greater than 3-to-1 margin at the NYSE and a greater than 2-to-1 margin at the Nasdaq. By the close, decliners led advancers by a 4-to-3 margin at the NYSE while advancers had a slim lead over decliners at the Nasdaq.
Roughly half of the 11 S&P 500 sectors logged a gain this session led by the defensive-oriented consumer staples (+1.3%), utilities (+1.0%), and health care (+0.9%). Meanwhile, the energy (-3.7%) sector was the worst performer by a wide margin amid falling oil prices ($76.57/bbl, -1.91, -2.4%).
- Nasdaq Composite: +12.6% YTD
- Russell 2000: +10.5% YTD
- S&P Midcap 400: +9.7% YTD
- S&P 500: +6.2% YTD
- Dow Jones Industrial Average: +2.1% YTD
Reviewing today's economic data:
- January Import prices -0.2%; Prior was revised to -0.1% from 0.4%
- January Import Prices ex-oil 0.3%; Prior 0.4%
- January Export Prices 0.8%; Prior was revised to -3.2% from -2.6%
- January Export Prices ex-ag. 0.8%; Prior was revised to -3.3% from -2.7%
- January Leading Indicators -0.3% (consensus -0.3%); Prior was revised to -0.8% from -1.0%
As a reminder, bond and equity markets will be closed on Monday for Presidents Day.
Looking ahead to Tuesday, market participants will receive the following economic data:
- 9:45 a.m. ET: Preliminary February IHS Markit Manufacturing PMI (prior 46.9) and preliminary IHS Markit Services PMI (prior 46.8)
- 10:00 a.m. ET: January Existing Home Sales (prior 4.02 mln)
