Closing Stock Market SummaryFollowing last week's disappointing finish, the stock market kicked off this week on an upbeat note. The positive bias was partially fueled by some technical catalysts including the S&P 500 closing above its 200-day moving average on Friday, along with the 10-yr note yield staying below 4.00%.
A noticeable pullback in Treasury yields from overnight highs was another support factor for equities. The 2-yr note yield, which hit 4.86% overnight, settled at 4.80%. The 10-yr note yield, which hit 3.96% overnight, settled at 3.93%.
The main indices exhibited some fairly strong upside momentum in the early going, likely driven by some short-covering activity, that had the S&P 500, Dow, and Nasdaq up 1.2%, 1.1%, and 1.5%, respectively, at their morning highs.
That momentum quickly dissipated, though, and the market spent most of the session in a steady grind lower. The main indices ultimately settled off their lows for the day thanks to buyers stepping in when the S&P 500 slipped below its 50-day moving average (3,980). The Nasdaq settled with the biggest gain today, bolstered by outperforming mega cap stocks.
Market breadth skewed positive, but margins were slimmer by the close compared to earlier in the session. Shortly after the open, advancers led decliners by a nearly 5-to-1 margin at the NYSE and a nearly 3-to-1 margin at the Nasdaq. By the close, advancers led decliners by a roughly 4-to-3 margin at both the NYSE and the Nasdaq.
Most of the S&P 500 sectors closed with a gain led by consumer discretionary (+1.2%) and industrials (+0.8%). The former was boosted by Tesla (TSLA 207.63, +10.75, +5.5%), which traded up ahead of its Investor Day on March 1 and following positive remarks by Cathie Wood earlier on CNBC. The latter was supported by a big gain in Union Pacific (UNP 212.17, +19.45, +10.1%), which reacted to news of a CEO succession plan expected to unfold this year and a BofA Securities upgrade to Buy from Neutral.
On the flip side, utilities (-0.8%) and health care (-0.3%) suffered the steepest losses.
- Nasdaq Composite: +9.6% YTD
- Russell 2000: +7.7% YTD
- S&P Midcap 400: +7.2% YTD
- S&P 500: +3.7% YTD
- Dow Jones Industrial Average: -0.8% YTD
Reviewing today's economic data:
- Durable goods orders declined 4.5% month-over-month in January ( consensus -3.9%) following a downwardly revised 5.1% increase (from 5.6%) in December. Excluding transportation, durable goods orders rose 0.7% month-over-month ( consensus +0.1%) following a downwardly revised 0.4% decline (from -0.1%) in December.
- The key takeaway from the report was the strength seen in nondefense capital goods orders, excluding aircraft -- a proxy for business spending. Those orders were up 0.8% month-over-month following a 0.3% decline in December. Shipments of these same goods, which factor into GDP forecasts, were up a healthy 1.1% after declining 0.6% in December.
- Pending home sales rose 8.1% in January ( consensus +1.0%) following a revised 1.1% increase in December (from +2.5%).
Advance Auto (AAP), AutoZone (AZO), Cracker Barrel (CBRL), J.M. Smucker (SJM), Norwegian Cruise Line (NCLH), Sea World Entertainment (SEAS), and Target (TGT) are among the notable companies reporting earnings ahead of tomorrow's open.
Looking ahead to Tuesday, market participants will receive the following economic data:
- 8:30 ET: January advance goods trade deficit (prior -$90.30 bln), advance Retail Inventories (prior 0.5%), and advance Wholesale Inventories (prior 0.1%)
- 9:00 ET: December FHFA Housing Price Index (prior -0.1%) and December S&P Case Shiller Home Price Index ( consensus 5.8%; prior 6.8%)
- 9:45 ET: February Chicago PMI ( consensus 45.0; prior 44.3)
- 10:00 ET: February Consumer Confidence consensus 108.4; prior 107.1)