Closing Stock Market Summary
Today's trade was mixed, capping off a winning week. The S&P 500 closed 0.2% higher than yesterday and 1.9% higher than last Friday. The Nasdaq Composite settled fractionally lower than yesterday and 1.1% higher than last Friday.
The major indices were initially trading higher today, but early buyer enthusiasm dissipated after the release of the preliminary University of Michigan Index of Consumer Sentiment for May at 10:00 ET. That report dropped to 67.4 in May (expected 76.5; prior 77.2) and showed a jump in year-ahead inflation expectations to 3.5% from 3.2%.
Treasuries extended starting losses in response to the report. The 10-yr note yield settled six basis points higher today, and unchanged this week, at 4.50%. The 2-yr note yield settled six basis points higher today, and six basis points this week, to 4.87%.
Some mega caps rolled over around the same time, giving back early gains. Apple (AAPL 183.05, -1.52, -0.8%) was a standout in that respect, trading up as much as 0.3% at its high before settling lower.
Many stocks still closed with gains despite the index-level pullback from session highs and negative breadth. Decliners led advancers by an 11-to-10 margin at the NYSE and a 3-to-2 margin at the Nasdaq. The equal-weighted S&P 500 still settled 0.2% higher and six of the 11 S&P 500 sectors registered gains.
The consumer staples (+0.6%), information technology (+0.5%), financials (+0.5%), and health care (+0.2%) sectors were the top performers today. The consumer discretionary sector logged the biggest decline, down 0.6%.
Strength in the semiconductor space after TSMC (TSM 149.26, +6.47, +4.5%) reported a big jump in revenue in April provided a measure support to the broader market. The PHLX Semiconductor Index (SOX) gained 1.0%.
- S&P 500:+9.5% YTD
- Nasdaq Composite: +8.9% YTD
- S&P Midcap 400: +7.6% YTD
- Dow Jones Industrial Average: +4.8% YTD
- Russell 2000: +1.6% YTD
Reviewing today's economic data:
- The preliminary Index of Consumer Sentiment for May sunk to 67.4 (consensus 76.5) from the final reading of 77.2 for April. In the same period a year ago, the index stood at 59.0. The May reading is the lowest in six months.
- The key takeaway is that the downturn in sentiment was driven by decreases across age, income, and education groups, and revolved around worries pertaining to inflation, unemployment, and interest rates.
- The Treasury Budget for April showed a surplus of $209.5 billion compared to a surplus of $176.2 billion in the same period a year ago. The April surplus resulted from receipts ($776.2 billion) exceeding outlays ($566.7 billion). The Treasury Budget data is not seasonally adjusted so the April surplus cannot be compared to the March deficit of $236.5 billion.
- The key takeaway from the report is that individual tax receipts were higher than the prior year, which is a reflection of the stronger economy in 2023. Separately, higher rates accompanied the stronger economy, which in turn drove higher outlays for net interest costs.
Looking ahead, there is no US economic data of note on Monday. Tuesday's calendar features the April Producer Price Index and the April Consumer Price Index will be released on Wednesday.