Closing Stock Market SummaryThe S&P 500 gained 0.5% on Tuesday, although it started the day up as much as 1.1% in a relatively broad-based continuation of the prior day's rebound. The mega-caps and growth stocks generally outperformed their value-oriented peers.
The Nasdaq Composite advanced 1.2%, reflecting the tech-oriented leadership, while the Russell 2000 (+0.1%) and Dow Jones Industrial Average (unch) finished little changed.
Apple (AAPL 115.54, +0.19, +0.2%) was the exception to the mega-cap excellence despite the company revealing a new watch with added fitness and health capabilities, a new iPad, and new subscription plans. Shares opened higher by 3.0% but briefly turned negative after the conclusion of its product event in the afternoon, weighing on the major indices.
Most components in the top-weighted S&P 500 information technology sector (+1.0%) still showed relative strength, though, and gains in the communication services (+1.7%), real estate (+1.4%), and consumer discretionary (+1.0%) sectors supported the market. Conversely, the financials (-1.4%), energy (-0.8%), and consumer staples (-0.1%) sectors closed lower.
Losses were broad in the financials sector, but JPMorgan Chase (JPM 99.28, -3.19, -3.1%) particularly weighed on sentiment after lowering its FY20 net interest income guidance to $55 bln from prior guidance of $56 bln. Citigroup (C 44.81, -3.34, -6.9%) fell another 7% after falling 5% yesterday on news of a potential penalty from federal regulators.
Other notable laggards included Caterpillar (CAT 148.60, -4.91, -3.2%) after providing disappointing sales figures for August, Lennar (LEN 75.90, -3.10, -3.9%) despite reporting better-than-expected earnings results, and Carnival (CCL 15.93, -1.92, -10.8%) after disclosing a $1 billion stock offering.
Shares of NextEra Energy (NEE 295.70, +13.78, +4.9%) rose 5% after the utilities company increased its EPS guidance for 2021 and announced a 4:1 stock split.
U.S. Treasuries finished mixed and little changed. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield increased one basis point to 0.68%. The U.S. Dollar Index was flat at 93.08. WTI crude futures rose 2.9%, or $1.08, to $37.22/bbl.
Reviewing Tuesday's economic data:
- Industrial production increased 0.4% m/m in August (consensus +1.0%) after increasing an upwardly revised 3.5% (from 3.0%) in July. The capacity utilization rate increased to 71.4% (consensus 71.7%) from an upwardly revised 71.1% (from 70.6%).
- The key takeaway from the report is the understanding that gains for most manufacturing industries have gradually slowed since June.
- The Empire State Manufacturing Survey for September was better than expected, checking in at 17.0 (consensus 5.9) versus 3.7 in August.
- Import prices increased 0.9% in August; and prices, excluding oil, increased 0.7%. Export prices increased 0.5% in August; and prices, excluding agriculture, increased 0.8%.
Looking ahead to Wednesday, investors will receive Retail Sales for August, the FOMC Rate Decision, the NAHB Housing Market Index for September, Business Inventories for August, Net Lon-Term TIC Flows for July, and the weekly MBA Mortgage Applications Index.
- Nasdaq Composite +24.7% YTD
- S&P 500 +5.3% YTD
- Dow Jones Industrial Average -1.9% YTD
- Russell 2000 -7.8% YTD