Closing Stock Market SummaryIt was a decidedly strong day for the stock market. The major indices all closed near their best levels of the session with gains ranging from 0.6% to 1.7%. The upside moves were in response to a slate of stronger-than-expected economic data this morning that helped to ease some concerns about a hard landing for the economy.
Namely, the May Durable Goods Orders, May New Home Sales, and June Consumer Confidence reports all went the market's way. As a result, today's trade had a risk-on and pro-cyclical vibe.
In the early going, buying interest was more pronounced in parts of the market that have been trailing index level gains this year. Mega caps, meanwhile, were relative underperformers, but were still trading up for the most part. By the afternoon, mega caps had caught up with the broader market, accelerating index gains.
Even Alphabet (GOOG 119.01, -0.08, -0.1%), which had been down as much as 1.8% after being downgraded to Market Perform from Outperform at Bernstein, briefly tipped into positive territory before closing with a modest loss.
The Vanguard Mega Cap Growth ETF (MGK) rose 1.5%; the Invesco S&P 500 Equal Weight ETF (RSP) rose 1.2%; and the market-cap weighted S&P 500 rose 1.2%.
Gains in their respective mega cap components propelled the information technology (+2.0%) and consumer discretionary (+2.1%) sectors to first place on the leaderboard.
The consumer discretionary sector was also boosted by outperforming homebuilder components in response to the jump in new homes sales in May. The information technology sector, meanwhile, was boosted by outperforming semiconductor components. The SPDR S&P Homebuilder ETF (XHB) rose 2.9%. The PHLX Semiconductor Index rose 3.6%.
Other top performers included the economically-sensitive materials (+1.4%) and industrials (+1.3%) sectors.
The countercyclical health care (-0.2%), utilities (+0.3%), and consumer staples (+0.3%) sectors all underperformed, closing near the bottom of the pack. The consumer staples sector was partially weighed down by a sizable loss in Dow component Walgreens Boots Alliance (WBA 28.64, -2.95, -9.3%) after its disappointing fiscal Q3 earnings report and outlook.
This morning's data fueled selling in the Treasury market. The 2-yr note yield rose two basis points to 4.76% and the 10-yr note yield rose five basis points to 3.77%.
- Nasdaq Composite: +29.5% YTD
- S&P 500: +14.0% YTD
- Russell 2000: +5.0% YTD
- S&P Midcap 400: +6.0% YTD
- Dow Jones Industrial Average: +2.4% YTD
Reviewing today's economic data:
- Total durable goods orders were up 1.7% month-over-month in May (consensus -1.0%) following an upwardly revised 1.2% increase (from 1.1%) in April. Excluding transportation, durable goods orders increased 0.6% month-over-month (consensus 0.0%) following a downwardly revised 0.6% decline (from -0.2%) in April.
- The key takeaway from the report is that nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- jumped 0.7% following a 0.6% increase in April.
- The FHFA Housing Price Index rose 0.7% in April following a revised 0.5% increase in March (from 0.6%).
- The S&P Case-Shiller Home Price Index fell 1.7% in April (consensus -2.5%) following a 1.1% decrease in March.
- The Conference Board's Consumer Confidence Index jumped to 109.7 in June (consensus 103.8) from an upwardly revised 102.5 (from 102.3) in May. In the same period a year ago, the index stood at 98.4.
- The key takeaway from the report is that the uptick in consumer confidence was driven both by a pickup in views about current conditions and the outlook, the latter of which included a brighter outlook for consumers' family finances.
- New home sales surged 12.2% month-over-month in May to a seasonally adjusted annual rate of 763,000 units (consensus 665,000) from a downwardly revised 680,000 (from 683,000) in April. On a year-over-year basis, new home sales were up 20.0%.
- The key takeaway from the report is that lower sales prices helped drive new home sales, which are counted when contracts are signed, to their highest level since February 2022.
Looking ahead to Wednesday, market participants will receive the following economic data:
- 7:00 a.m. ET: Weekly MBA Mortgage Applications Index (prior +0.5%)
- 8:30 a.m. ET: May Adv. Intl. Trade in Goods (prior -$96.8 billion), Adv. Retail Inventories (prior +0.2%), and Adv. Wholesale Inventories (prior -0.2%)
- 10:30 a.m. ET: Weekly EIA Crude Oil Inventories (prior -3.83 million barrels)
