Closing Stock Market SummaryThe stock market had a strong showing compared to yesterday, but that's not a big feat. The August PPI report came in better than yesterday's August CPI report, which alleviated some of the selling pressure in the Treasury market and fueled buy-the-dip interest that disproportionately benefitted mega cap stocks. The major indices saw some whipsaw price action, but ultimately closed with modest gains.
Strength from mega caps really drove index level performance today as evidenced by the Vanguard Mega Cap Growth ETF (MGK) closing with a 0.7% gain compared to a 0.3% gain in the S&P 500. The Invesco S&P 500 Equal Weight ETF (RSP) closed flat.
The advance-decline line paints a picture of a mixed market. Advancers led decliners by an 11-to-10 margin at the NYSE while decliners led advancers by the same margin at the Nasdaq.
S&P 500 sector performance also reflects mixed market action with roughly half of the 11 sectors closing in positive territory. Real estate (-1.4%) and materials (-1.2%) were today's top laggards while energy (+2.9%) and consumer discretionary (+1.3%) rose to the top of the leaderboard.
The materials sector was dragged down by an earnings warning from Nucor (NUE 120.71, -15.39, -11.3%) that followed on the heels of an earnings warning yesterday from Eastman Chemical (EMN 82.12, -1.23, -1.5%).
The energy sector outpaced its peers by a decent margin as oil prices rose above $88.00/bbl driven by a belief that the White House is tacitly attempting to put a floor under oil prices by suggesting it might buy oil around $80.00 per barrel to refill the Strategic Petroleum Reserve. WTI crude oil futures settled 1.3% higher to $88.58/bbl.
The 2-yr note yield, at 3.81% before the August PPI release, settled at 3.77% and the 10-yr note yield, at 3.46% before the release, settled at 3.41%. The US Dollar Index was down 0.1% to 109.67.
Looking ahead to Thursday, market participants will receive the following economic data:
- 8:30 ET: August Retail Sales ( consensus 0.0%; prior 0.0%), Retail Sales ex-auto ( consensus 0.0%; prior 0.4%), weekly Initial Claims ( consensus 233,000; prior 222,000), Continuing Claims (prior 1.473 mln), August Import/Export Prices, September Empire State Manufacturing (consensus -13.5; prior -31.3), and September Philadelphia Fed Survey ( consensus 3.0; prior 6.2)
- 9:15 ET: August Industrial Production ( consensus 0.0%; prior 0.6%) and Capacity Utilization ( consensus 80.3%; prior 80.3%)
- 10:00 ET: July Business Inventories ( consensus 0.6%; prior 1.4%)
- 10:30 ET: Weekly natural gas inventories (prior +54 bcf)
Reviewing today's economic data:
- 09/10 MBA Mortgage Applications Index -1.2%; prior was -0.8%
- Aug PPI -0.1% vs Briefing.com consensus of -0.1%; prior was -0.4% revised from -0.5%
- The key takeaway from the report is that producers saw a moderation in price pressures, yet the report also shows that inflation is still far too high and broad based.
- Aug Core PPI 0.4% vs Briefing.com consensus of 0.3%; prior was 0.3% revised from 0.2%
- 09/10 EIA Crude Oil Inventories +2.44M; prior was +8.84M
Dow Jones Industrial Average: -14.3% YTD
S&P 400: -14.6% YTD
S&P 500: -17.2% YTD
Russell 2000: -18.1% YTD
Nasdaq Composite: -25.1% YTD