Closing Stock Market SummaryToday's trade started on an upbeat note following yesterday's pleasing price action. Initially, the main indices all logged decent gains paced by the Nasdaq thanks to relative strength from chipmakers and mega cap stocks.
Early momentum dissipated, though, and the main indices slowly declined, hitting their session lows around midday. The downturn was attributed to renewed selling pressure in the banking sector, indicating that concerns about additional fallout remain in play for investors. The SPDR Regional Bank ETF (KRE) fell 2.0% and the SPDR Bank ETF (KBE) lost 1.5% today.
Unsurprisingly, the S&P 500 financial sector (-0.3%) was the worst performer today. It was the only sector to close with a loss, partially weighed down by the recently embattled First Republic Bank (FRC 13.69, -0.57, -4.0%). Charles Schwab (SCHW 52.47, -2.74, -5.0%) was another top laggard for the sector after being downgraded to Equal Weight from Overweight at Morgan Stanley.
Following the midday dip, the main indices bounced and closed near their best levels of the day. The S&P 500 was able to extend its position above its 50-day moving average (4,017). Fortunately, buying interest in chipmakers and mega cap stocks remained fairly robust. The PHLX Semiconductor Index rose 1.6% and the Vanguard Mega Cap Growth ETF (MGK) rose 0.8%.
The ten remaining S&P 500 sector, aside from financials, logged gains ranging from 0.2% (industrials) to 1.2% (real estate). The influential information technology (+1.1%) and consumer discretionary (+0.9%) sectors were among the top performers.
The 2-yr note yield rose four basis points to 4.11% and the 10-yr note yield fell two basis points to 3.55%.
The U.S. Dollar Index fell 0.5% to 102.14. On a currency related note, China and Brazil agreed to trade in their own currencies instead of the U.S. dollar.
As a reminder, investors receive the market-moving February Personal Income and Spending report tomorrow at 8:30 a.m. ET, which will include the PCE Price Index (the Fed's preferred inflation gauge).
- Nasdaq Composite: +14.8% YTD
- S&P 500: +5.5% YTD
- S&P Midcap 400: +1.6% YTD
- Russell 2000: +0.4% YTD
- Dow Jones Industrial Average: -0.9% YTD
Reviewing today's economic data:
- Initial jobless claims for the week ending March 25 increased by 7,000 to 198,000 (consensus 196,000) while continuing jobless claims for the week ending March 18 increased by 4,000 to 1.689 million from last week's revised level of 1.685 million (from 1.694 million).
- The key takeaway from the report is that claims remain at a stable level near the 200,000 mark, suggesting little recent stress in the labor market.
- The third estimate for fourth quarter GDP showed a slight downward revision to 2.6% (consensus 2.7%) from 2.7% reported in the second estimate. The lowered estimate was owed to downward revisions to exports and consumer spending. The GDP Price Deflator was left unrevised at 3.9% (consensus 3.9%). The personal consumption expenditures index was left unrevised at 3.7% while the core-PCE Price Index was revised up to 4.4% from 4.3% in the second estimate.
- The key takeaway from the report is that it continues pointing to above-potential growth and inflation that remains above target, which the Fed could use as an argument for additional rate hikes.
- The weekly EIA Natural Gas Inventories showed a draw of 47 bcf versus a draw of 72 bcf last week.
Looking ahead to Friday, market participants will receive the following economic data:
- 8:30 ET: February Personal Income (consensus 0.3%; prior 0.6%), Personal Spending (consensus 0.3%; prior 1.8%), PCE Prices (consensus 0.4%; prior 0.6%), and Core PCE Prices (consensus 0.4%; prior 0.6%)
- 9:45 ET: March Chicago PMI (consensus 42.5; prior 43.6)
- 10:00 ET: Final March University of Michigan Consumer Sentiment (consensus 63.4; prior 63.4)
