Closing Market Summary: Major Averages Eke Out Win on ThursdayUp to their eyeballs in earnings reports, investors decided to play it safe on Thursday, not wanting to get ahead of themselves before the next heavy batch arrived. The Nasdaq (+0.4%) outperformed while the S&P 500 (+0.1%) and the Dow (unch) ended little changed.
Nearly 300 companies released their quarterly results between Wednesday's close and Thursday's open. The reports had a minor impact at the macro level, but they did have some sway in the sector standings. For instance, the consumer discretionary space (+0.6%) finished near the top of the day's leaderboard, thanks in part to Comcast's (CMCSA 39.59, +0.80) advance. CMCSA jumped 2.1% after beating top and bottom line estimates. Under Armour (UAA 21.67, +1.96) also contributed to the cause, spiking 9.9%, on better than expected earnings.
The top-weighted technology sector (+0.6%) also outperformed the broader market after PayPal (PYPL 47.15, +2.74) climbed 6.2% in reaction to above-consensus earnings/revenues and upbeat guidance. Chipmakers also had a good showing, evidenced by the 1.4% increase in the PHLX Semiconductor Index.
Meanwhile, in the health care sector (+0.3%), Bristol-Myers Squibb (BMY 55.67, +1.90) added 3.5% on better than expected earnings/revenues and positive guidance. The lightly-weighted utilities (+0.3%) and real estate (+0.1%) sectors also finished in the green.
Outside of earnings, crude oil made for another focal point on Thursday. The commodity settled with a loss of 1.2% following Wednesday's inventory report from the Energy Information Administration, which showed an increase in gasoline inventories for the week ending April 21. In addition, crude oil battled technical forces on Thursday, moving below its 200-day simple moving average ($49.00/bbl). As a result, the energy sector (1.1%) settled near the bottom of the sector standings.
The telecom services (-1.3%) and financials (-0.5%) spaces also showed relative weakness. However, the financial sector's underperformance wasn't all that surprising in light of the sector's big week-to-date gain entering Thursday's session (+3.1%). The remaining groups--industrials (unch), materials (-0.2%), and consumer staples (-0.2%)--also finished in the red, but their losses were modest.
In the Treasury market, U.S. sovereign debt settled slightly higher with the benchmark 10-yr yield (2.30%) losing one basis point. Meanwhile, the U.S. dollar added 0.3% and 0.1%, respectively, against the euro (1.0874) and Japanese yen (111.22) after both the Bank of Japan and the European Central Bank decided to leave their monetary policies unchanged.
In addition to earnings reports, investors received a number of economic reports on Thursday, including March Durable Orders, Initial Claims, Advance International Trade in Goods, and March Pending Home Sales:
- March durable goods orders rose 0.7%, which is below the 1.2% increase expected by the consensus. The prior month's reading was revised to 2.3% (from 1.7%). Excluding transportation, durable orders decreased 0.2% (consensus 0.4%) to follow the prior month's revised uptick of 0.7% (from 0.4%).
- The key takeaway from the report is that business spending is still relatively soft, up 2.1% year-over-year.
- The latest weekly initial jobless claims count totaled 257,000 while the consensus expected a reading of 242,000. Today's tally was above the revised prior week count of 243,000 (from 244,000). As for continuing claims, they rose to 1.988 million from the revised count of 1.978 million (from 1.979 million).
- The key takeaway from the report is that initial claims continue to run at very low levels consistent with a tight labor market.
- The Advance report for International Trade in Goods for March showed a deficit of $64.8 billion (consensus -$65.0 billion), up from a revised deficit of $63.9 billion for February (from -$64.8 billion).
- Pending Home Sales for March declined 0.8%. Today's reading follows a revised 5.6% increase in February (from 5.5%).
On Friday, investors will receive another sizable batch of economic reports, including the advance estimate of first quarter GDP ( consensus 1.1%) at 8:30 ET, April Chicago PMI ( consensus 56.9) at 9:45 ET, and the final reading of the University of Michigan Consumer Sentiment Index for April (consensus 98.0) at 10:00 ET.
- Nasdaq Composite +12.4% YTD
- S&P 500 +6.7% YTD
- Dow Jones Industrial Average +6.2% YTD
- Russell 2000 +4.4% YTD