Closing Stock Market Summary
The stock market closed with gains, bolstered by lower market rates, lower oil prices, and a weaker dollar. Those factors rose to the forefront in the absence of worst-case scenarios unfolding in the Israel-Hamas conflict.
The major indices spent most of the morning rising steadily, but dipped from their highs around 1:00 p.m. ET. That move coincided with Apple (AAPL 178.39, -0.60, -0.3%) and Microsoft (MSFT 328.39, -1.43, -0.4%) taking a turn lower and a $46 billion 3-yr note auction that was met with some relatively soft demand.
The 2-yr note yield settled seven basis points lower at 4.99% and the 10-yr note yield fell 12 basis points to 4.66%. These moves were partially a safe-haven bid related to the Israel-Hamas conflict, but they were also being fueled by a technical rebound from an oversold position. Gains in the Treasury market were also supported by assumptions that the jump in long-term rates has effectively tightened financial conditions enough to leave the Fed inclined to keep its policy rate on hold at the October 31-November 1 FOMC meeting.
The U.S. Dollar Index fell 0.3% to 105.76 and WTI crude oil futures fell 0.6% to $85.89/bbl.
Many stocks participated in today's rally, as evidenced by a 0.8% gain in the Invesco S&P 500 Equal Weight ETF (RSP). The market-cap weighted S&P 500 closed with a 0.5% gain. Ten of the 11 S&P 500 sectors closed with a gain while the energy sector (flat) closed just below the unchanged mark. The utilities (+1.4%), consumer discretionary (+1.1%), materials (+1.1%), and consumer staples (+1.1%) sector all jumped more than 1.0%.
The consumer staples sector was partially supported by a gain in PepsiCo (PEP 164.40, +3.04, +1.9%) after its better than expected earnings report and outlook.
The Russell 2000 was a relative outperformer, rising 1.1% today, which brings the index back into positive territory for the year (+0.8%).
Today's economic data featured the September NFIB Small Business Optimism survey, which fell to 90.8 from 91.3 in August, and the August Wholesale Inventories report, which reflected a 0.1% decline ( consensus -0.1%) following a revised 0.3% decline in July (from -0.2%).
- Nasdaq Composite: +29.6% YTD
- S&P 500: +13.5% YTD
- S&P Midcap 400: +2.8% YTD
- Dow Jones Industrial Average: +1.8% YTD
- Russell 2000: +0.8% YTD
Looking ahead, Wednesday's economic calendar includes:
- 7:00 a.m. ET: Weekly MBA Mortgage Applications Index (prior -6.0%)
- 8:30 a.m. ET: September PPI ( consensus 0.3%; prior 0.7%) and core PPI ( consensus 0.2%; prior 0.2%)
- 2:00 p.m. ET: September Treasury Budget (prior $89.2 billion) and FOMC Minutes from September 19-20