Closing Stock Market Summary
The major indices traded in relatively narrow ranges in the early going as investors looked ahead to this afternoon's market moving events. Index-level action was mixed and the A-D line favored advancers slightly at both the NYSE and at the Nasdaq.
The stock market was little changed after the FOMC voted unanimously to leave the fed funds rate range at 5.25-5.50%, as expected, noting that there has been a lack of further progress toward reaching the inflation target in recent months.
Stocks rallied, however, as Fed Chair Powell gave his subsequent press conference where he stated that it was "unlikely that the next policy rate move will be a hike." Market rates dropped in response and the major indices all traded more than 1.0% higher.
The 2-yr note yield, which is most sensitive to changes in the fed funds rate, declined 11 basis points today to 4.94% and the 10-yr note yield fell nine basis points to 4.60%.
The rally lost momentum in front of the close, though, due to ongoing uncertainty around the Fed leaving rates higher for longer. The major indices settled near where they traded in front of the market-moving events. The Dow Jones Industrial Average (+0.2%) logged a gain while the S&P 500 (-0.3%) and Nasdaq Composite (-0.3%) closed with losses.
An earnings-related gain in shares of Amazon.com (AMZN 179.00, +4.00, +2.3%) provided a measure of support to the broader market while sharp losses in some names that reported earnings acted as limiting factors. CVS Health (CVS 56.31, -11.40, -16.8%), Starbucks (SBUX 74.44, -14.05, -15.9%), and Skyworks Solutions (SWKS 90.30, -16.29, -15.3%) were standouts in that respect.
- S&P 500:+5.2% YTD
- Nasdaq Composite: +4.0% YTD
- S&P Midcap 400: +3.0% YTD
- Dow Jones Industrial Average: +0.6% YTD
- Russell 2000: -2.3% YTD
Reviewing today's economic data:
- Weekly MBA Mortgage Applications Index -2.3%; Prior -2.7%
- April ADP Employment Change 192K (consensus 175K); Prior was revised to 208K from 184K
- April S&P Global US Manufacturing PMI - Final 50.0; Prior 51.9
- April ISM Manufacturing Index 49.2% (consensus 50.0%); Prior 50.3%
- The key takeaway from the report is that it painted a mixed picture the market doesn't like to see: weakening manufacturing activity and a faster increase in prices.
- March JOLTS - Job Openings 8.488 mln; Prior was revised to 8.813 mln from 8.756 mln
- March Construction Spending -0.2% (consensus 0.4%); Prior was revised to 0.0% from -0.3%
- The key takeaway from the report is that residential spending was weak, perhaps reflecting the effects of higher financing costs and tighter lending standards for new construction projects.
Looking ahead, Thursday's economic data include:
- 8:30 ET: Weekly Initial Claims (consensus 213,000; prior 207,000), Continuing Claims (prior 1.781 mln), March Trade Balance (consensus -$69.0 bln; prior -$68.9 bln), preliminary Q1 Productivity (consensus 0.8%; prior 3.2%) and Unit Labor Costs (consensus 2.5%; prior 0.4%)
- 10:00 ET: March Factory Orders (consensus 1.6%; prior 1.4%)
- 10:30 ET: Weekly natural gas inventories (prior +92 bcf)