Closing Stock Market Summary
Stocks had a volatile session today. The S&P 500 settled 0.2% lower, the Nasdaq Composite ultimately logged a 0.1% decline, and the price-weighted Dow Jones Industrial Average eked out a 0.2% gain thanks to strength in its heaviest component, UnitedHealth (UNH 468.89, +23.26, +5.2%), after reporting earnings.
The S&P 500 and Nasdaq Composite traded close to their prior closing levels in the early going, showing relatively modest gains or losses. Choppiness increased, however, in the afternoon trade as participants reacted to commentary from Fed Chair Powell.
Mr. Powell didn't say anything too surprising and the market interpreted his remarks as corroborating the recent rate cut recalibrations. Chairman Powell said at a panel discussion that restrictive policy needs more time to work since recent data has not shown progress on the inflation front. There was also a Wall Street Journal article from Nick Timiraos indicating that Mr. Powell tempered rate cut expectations.
The Treasury market had a muted response to these developments. Yields were already elevated despite this morning's weaker-than-expected Housing Starts and Building Permits Report for March. The 2-yr note yield rose two basis points to 4.96% and the 10-yr note yield settled three basis points higher at 4.66%.
The jump in market rates contributed to an underlying negative bias in the market through most of the session. Decliners had a nearly 2-to-1 lead over advancers at both the NYSE and at the Nasdaq.
Negative responses to earnings news from Bank of America (BAC 34.68, -1.27, -3.5%) and other names also contributed to the overall downside bias. The SPDR S&P Bank ETF (KBE) declined 1.3%.
- S&P 500:+5.9% YTD
- Nasdaq Composite: +5.7% YTD
- S&P Midcap 400: +2.6% YTD
- Dow Jones Industrial Average: +0.3% YTD
- Russell 2000: -2.9% YTD
Reviewing today's economic data:
-
March Housing Starts 1.321 mln (consensus 1.485 mln); Prior was revised to 1.549 mln from 1.521 mln; March Building Permits 1.458 mln (consensus 1.518 mln); Prior was revised to 1.523 mln from 1.518 mln
- The key takeaway from the report is that it provided no signs of relief for a supply-constrained housing market. Single-unit starts were down by double-digit percentages in every region except the West (+1.3%); meanwhile, building permits -- a leading indicator -- for single-family units were down in every region, highlighted by a 5.3% decline in the South, which is the country's largest housing market.
-
March Industrial Production 0.4% (consensus 0.4%); Prior was revised to 0.4% from 0.1%; March Capacity Utilization 78.4% (consensus 78.6%); Prior was revised to 78.2% from 78.3%
- The key takeaway from the report is that industrial production remained on a growth track in March, driven by gains in manufacturing output that one would expect to see in a growing economy.
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior 0.1%)
- 10:30 ET: Weekly crude oil inventories (prior +5.84 mln)
- 14:00 ET: April Beige Book
- 16:00 ET: February Net Long-Term TIC Flows (prior $36.1 bln)