Closing Market Summary: Stocks Climb But Momentum Names Remain Volatile
The major averages finished the Monday session on a modestly higher note, but they ended below their best levels of the day after volatility during the last two hours of action forced the indices to test their flat lines. The S&P 500 rose 0.8%, while the Nasdaq added 0.6% after being up as much as 1.3%.
The stock market began the session on an upbeat note, casting aside renewed concerns about the situation in Ukraine, where the country's army was called in over the weekend to deal with pro-Russian separatists in several cities in the Southeast.
Instead, the market rallied in the morning after Citigroup's (C 47.67, +1.99) above-consensus quarterly results, combined with a better-than-expected March Retail Sales report, invited buyers into the mix. In all likelihood, the early advance was assisted by some short-covering as many areas that displayed weakness in recent sessions, showed relative strength this morning.
Biotechnology was among the early leaders and the iShares Nasdaq Biotechnology ETF (IBB 215.37, -0.08) made a run at its 200-day moving average. The ETF made a brief appearance above that noteworthy level before spending the afternoon in a steady retreat that placed the group back in the red. The health care sector, meanwhile, added 0.5%.
Other momentum names traded in similar fashion to biotech with the likes of Google (GOOG 532.52, +1.92), Facebook (FB 58.89, +0.36), LinkedIn (LNKD 165.78, 0.00), and Yelp (YELP 61.94, +0.22) showing early strength before retreating from their highs during afternoon action. The technology sector (+1.1%), meanwhile, held up relatively well, but it too ended below its session high.
Elsewhere among cyclical groups, energy (+1.3%) outperformed throughout the session with support from Dow components Chevron (CVX 118.70, +1.67) and ExxonMobil (XOM 97.86, +1.14), both of which posted gains close to 1.3% apiece. The sector ended in the lead while crude oil rose 0.4% to $104.05/bbl.
The other commodity-related sector, materials, ended in line with the broader market. Miners and steelmakers displayed strength, with Market Vectors Gold Miners ETF (GDX 24.52, +0.30) and Market Vectors Steel ETF (SLX 47.41, +0.56) both gaining 1.2%. For its part, gold futures advanced 0.7% to $1327.70/ozt.
Treasuries posted slim losses, sending the benchmark 10-yr yield higher by one basis point to 2.64%.
Participation was below average as less than 680 million shares changed hands at the New York Stock Exchange.
Reviewing today's data: Retail sales increased 1.1% in March after increasing an upwardly revised 0.7% (from 0.3%) in February. The consensus expected retail sales to increase 1.0%. As expected from the motor vehicle sales data, auto sales contributed significantly to overall sales growth. Sales at motor vehicle and parts dealers increased 3.1% in March after increasing 2.5% in February. Excluding autos, retail sales still increased a solid 0.7% in March, up from a 0.3% gain in February. The consensus expected these sales to increase 0.5%. Sales were strong all around, but there wasn't much to suggest that the acceleration in spending was the result of pent-up demand from delayed winter spending. The March employment report showed a 0.7% increase in aggregate wages, which exactly matched spending after stripping out autos. Business inventories increased 0.4% for a second consecutive month in February. The consensus expected inventories to increase 0.6%. Total inventories consist of manufacturers, merchant wholesalers, and retailers. Both manufacturers (0.7%) and wholesalers (0.5%) inventories were announced prior to the release. Only retailer inventories, which were flat in February after increasing 0.3% in January, were unknown. Tomorrow, March CPI (consensus 0.1%) and the Empire Manufacturing Survey (consensus 7.5) for April will be released at 8:30 ET, while the February Net Long-Term TIC Flows report will cross the wires at 9:00 ET. The day's data will be topped off with the NAHB Housing Market Index (consensus 50) for April, which will be released at 10:00 ET.
S&P 500 -1.0% YTD Dow Jones Industrial Average -2.4% YTD Nasdaq Composite -3.7% YTD Russell 2000 -4.0% YTD