Closing Stock Market Summary
Today's session started with a positive bias. The A-D line favored advancers at both the NYSE and at the Nasdaq, and the major indices were mostly trading higher. Buying activity was modest, yet broad based.
Some early buyer enthusiasm started to dissipate around mid-day, though, which led the S&P 500 to trade around the 4,700 level in the afternoon. A surge of selling, especially in the mega cap stocks, drove the major indices to their worst levels of the session just before the close.
The S&P 500 ultimately settled below 4,700 today.
The Russell 2000 declined 0.1%; the S&P 500 fell 0.3%; and the Nasdaq Composite registered a 0.6%. Meanwhile, the Dow Jones Industrial Average finished slightly higher than yesterday.
The Vanguard Mega Cap Growth ETF (MGK) logged a 0.4% loss, due in part to weakness in Apple (AAPL 181.91, -2.34, -1.3%) after a downgrade to Neutral from Overweight at Piper Sandler.
Other mega cap stocks had been trading higher in the early going, but rolled over before the close. Microsoft (MSFT 367.94, -2.66, -0.7%), which was up 0.7% at its high, and Tesla (TSLA 237.93, -0.52, -0.3%), which had been up as much as 1.8%, were standouts in that respect.
The S&P 500 sector that house mega cap constituents saw some of the largest declines, along with the energy sector (-1.6%). Meanwhile, the health care (+0.5%) and financials (+0.2%) sectors outperformed.
Market participants were reacting to rising rates today, and recalibrating rate-cut expectations after some strong data from the labor market ahead of the December jobs report tomorrow.
The 2-yr note yield rose five basis points to 4.37% and the 10-yr note yield climbed eight basis points to 3.99% after hitting 4.00% earlier.
- Dow Jones industrial Average: -0.7%
- S&P 500: -1.7%
- S&P Midcap 400: -2.8%
- Nasdaq Composite: -3.3%
- Russell 2000: -3.4%
Reviewing today's economic data:
- December ADP Employment Change 164K ( consensus 114K); Prior was revised to 101K from 103K
- Weekly Initial Claims 202K (consensus 220K); Prior was revised to 220K from 218K; Weekly Continuing Claims 1.855 mln; Prior was revised to 1.886 mln from 1.875 mln
- The key takeaway from the report -- and the ADP number -- is that the labor market is still in good shape, which is good news for the economy if not for the market's aggressive rate-cut outlook.
- December S&P Global US Services PMI - Final 51.4; Prior 50.8
Looking ahead, Friday's economic calendar features:
- 8:30 ET: December Nonfarm Payrolls (consensus 162,000; prior 199,000), Nonfarm Private Payrolls (consensus 132,000; prior 150,000), Unemployment Rate ( consensus 3.8%; prior 3.7%), Average Hourly Earnings (consensus 0.3%; prior 0.4%), and Average Workweek (Briefing.com consensus 34.4; prior 34.4)
- 10:00 ET: November Factory Orders (consensus 1.3%; prior -3.6%) and December ISM Non-Manufacturing Index (consensus 52.5%; prior 52.7%)