Closing Market Summary: S&P 500 Logs Third Consecutive Advance
The major averages ended Thursday on a modestly higher note with the S&P 500 (+0.2%) posting its third consecutive advance.
Equity indices rallied out of the gate, hitting their highs during the opening hour of action; however, the market was knocked back into the middle of its range after it was reported that International Monetary Fund representatives left Brussels for Washington due to insufficient progress between Greece and the creditors. Furthermore, IMF spokesman Gerry Rice stressed the continued presence of major differences, saying, "We are well away from an agreement."
The reports from Europe short-circuited the market's advance, but the S&P 500 remained above its 50-day moving average (2,102), which is a level the index reclaimed yesterday when Bloomberg reported that a staggered deal may be in the cards for Greece.
Seven of ten sectors registered gains while consumer staples (-0.1%) and energy (-0.4%) spent the day in the red. In addition, technology (-0.1%) turned negative during the afternoon.
The energy sector struggled as crude oil fell 1.0% to $60.74/bbl with dollar strength exerting pressure on the energy component. The Dollar Index (94.88, +0.24) climbed 0.3% with the greenback adding 0.4% against the euro (1.1274).
On the upside, countercyclical groups fared better than their growth-sensitive counterparts with health care (+0.5%), telecom services (+0.6%), and utilities (+0.7%) finishing ahead of the broader market. Large cap health care components outperformed from the start while biotechnology gathered strength as the day wore on. The iShares Nasdaq Biotechnology ETF (IBB 368.07, +2.24) gained 0.6%.
Over on the cyclical side, the industrial sector (+0.4%) ended ahead of its peers thanks to strength among transport stocks. The Dow Jones Transportation Average climbed 1.1% to extend its June advance to 1.8%. The broad-based advance was paced by railroad names with CSX (CSX 34.97, +1.00) rising 2.9%.
Elsewhere, the top-weighted technology sector (-0.1%) lagged throughout the day, which prevented the market from revisiting its early high. In general, large sector members fared relatively well, but Apple (APPL 128.59, -0.29), Google (GOOGL 550.04, -2.56), and Microsoft (MSFT 46.44, -0.17) posted losses while high-beta chipmakers also lagged with the PHLX Semiconductor Index shedding 0.1%.
Although the tech sector kept a lid on the market in the afternoon, a modest gain in the financial sector (+0.3%) prevented the S&P 500 from turning negative. Thanks to today's gain, the financial sector is now up 2.2% since the end of May.
Interestingly, financials outperformed today even as Treasuries spiked, dropping the benchmark 10-yr yield ten basis points to 2.39%.
Today's participation was in-line with yesterday's session as roughly 770 million shares changed hands at the NYSE floor.
Economic data included Initial Claims, Retail Sales, Import/Export Prices, and Business Inventories:
Weekly initial claims increased to 279,000 from an upwardly revised 277,000 (from 276,000) while the consensus expected an increase to 278,000
The four-week moving average inched up to 278,500 from 275,000
The continuing claims level increased to 2.265 million from an upwardly revised 2.204 million (from 2.196 mln) while the consensus expected a reading of 2.200 million
Retail sales increased 1.2% in May after increasing an upwardly revised 0.2% (from 0.0%) in April while the consensus expected an increase of 1.1%
As expected from the auto manufacturer reports, auto sales were strong in May, increasing 2.0%
Excluding autos, retail sales increased 1.0% in May after increasing an unrevised 0.1% in April while the consensus expected an increase of 0.7%
Export prices, excluding agriculture, increased 0.7% in May after decreasing 0.7% in the prior reading
Excluding oil, import prices were unchanged, which followed last month's 0.4% decline
Business inventories increased 0.4% in April after increasing an unrevised 0.1% increase in March while the Consensus expected an increase of 0.2%
The inventory changes from manufacturers (0.1%) and merchant wholesalers (0.4%) were known prior to the release. The only new information was that retailer inventories increased by 0.8% in April after increasing 0.3% in March
Tomorrow, May PPI (consensus 0.4%) will be released at 8:30 ET while the preliminary reading of the Michigan Sentiment Index for June will cross the wires at 10:00 ET (expected 91.5)
Nasdaq Composite +7.3% YTD
Russell 2000 +5.5% YTD
S&P 500 +2.4% YTD
Dow Jones Industrial Average +1.2% YTD