Closing Market Summary: Stocks Register First Win of the WeekThe stock market posted its first win of the week on Wednesday, however, several upcoming macro events held the major averages in check. The S&P 500 and the Dow added 0.2% apiece while the Nasdaq (+0.4%) finished a step above its peers.
Equities have been relatively flat all week ahead of tomorrow's full plate of events, which includes the UK general election, the latest policy decision from the European Central Bank, and the testimony of former FBI Director James Comey. Keeping in line with the week's sideways trend, equities opened Wednesday's session slightly higher, but were hovering at their flat lines by midday.
However, in the afternoon session, equities reclaimed their earlier gains after the prepared remarks that Mr. Comey will deliver before the Senate Intelligence Committee on Thursday were released.
The initial response was positive as market participants were seemingly heartened by the understanding that there wasn't any overt obstruction of justice claim in Mr. Comey's prepared statement. Nevertheless, the response overall was a measured one as participants were cognizant that more information will be forthcoming at the hearing itself.
Back on Wall Street, the energy sector (-1.5%) suffered at the hand of a bearish inventory report from the Energy Information Administration (EIA), which showed that both crude and gasoline inventories increased by 3.3 million barrels for the week ended June 2. Crude oil immediately plunged deep into negative territory following the EIA reading, finishing its day 4.9% lower at $45.49/bbl.
However, the heavily-weighted financial sector (+0.8%) helped to mitigate the energy group's bearish influence by providing solid sector leadership from start to finish. The top-weighted technology (+0.3%) sector also helped keep the bears at bay, thanks in large part to the outperformance of Apple (AAPL 155.37, +0.92) and chipmakers. AAPL added 0.6% while the PHLX Semiconductor Index increased by 0.7%.
The influential health care sector also outperformed, adding 0.3%, while the remaining advancers finished with gains between 0.1% (materials) and 0.5% (real estate). In addition to the energy group, the industrials (-0.1%) and consumer staples (-0.1%) sectors finished in negative territory.
Outside of the equity market, safe-haven assets like the Japanese yen (109.84, -0.4%), gold ($1,289.57/ozt, -0.6%), and U.S. Treasuries gave back some of Tuesday's gains on Wednesday. The benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, finished three basis points higher at 2.18%.
Regarding tomorrow's events in Europe, the latest polling data indicates that Prime Minister Theresa May's Conservative Party has a strong lead against the Labour Party. Meanwhile, the ECB is expected to leave rates unchanged, however, reports suggest that the central bank will lower its inflation outlook due to weaker energy prices.
On the data front, investors received two economic reports--April Consumer Credit and the weekly MBA Mortgage Applications Index--on Wednesday:
- The Consumer Credit report for April showed an increase of $8.1 billion while the Briefing.com consensus expected growth of $15.0 billion. The prior month's credit growth was revised to $19.6 billion from $16.4 billion.
- The weekly MBA Mortgage Applications Index increased 7.1% to follow last week's 3.4% decrease.
