Closing Market Summary: Equities Post Sixth-Consecutive WinThe stock market posted its sixth-consecutive win in style on Thursday with the S&P 500 (+0.4%) settling at a record high for the second day in a row. The Nasdaq (+0.7%) also finished at an all-time high while the Dow (+0.3%) missed its record close by around 30 points. The major averages closed at the upper end of the day's trading range.
As expected, OPEC and non-OPEC nations agreed to "extend their production adjustments, which originally started 1 January 2017, for a further period of nine months, beginning 1 July 2017." However, the OPEC/non-OPEC nations will not be increasing the size of the supply cut. The latter headline was somewhat disappointing for investors since the Kuwaiti Oil Minister said just yesterday that "all options are still open", including deeper output cuts.
WTI crude tumbled 4.8% to $48.87/bbl. However, it's important to note that crude oil went on a two-week rally ahead of today's announcement. Therefore, even with today's tumble, the commodity settled $2.99/bbl, or 6.5%, above its closing level on May 9.
Like crude oil, the energy sector (-1.8%) suffered a sizable loss. The lightly-weighted materials space (-0.2%) also closed in negative territory, but the nine remaining groups finished in the green with gains between 0.2% and 0.9%. The consumer discretionary (+0.9%) and technology (+0.8%) sectors were the top-performers while the financial space (+0.2%) lagged.
Retailers helped the consumer discretionary sector finish ahead of the broader market, evidenced by the 1.0% increase in the SPDR S&P Retail ETF (XRT 40.81, +0.41). Best Buy (BBY 61.25, +10.83) led the charge, spiking 21.5%, after beating top and bottom line estimates. Large-cap names like Amazon (AMZN 993.38, +13.03) and Starbucks (SBUX 62.90, +1.01) also underpinned the consumer discretionary space, adding 1.3% and 1.6%, respectively.
For technology, top-performers included Microsoft (MSFT 69.62, +0.85), Facebook (FB 151.96, +1.92), and Alphabet (GOOGL 991.86, +14.25). The three names added between 1.2% and 1.5%. Today's performance extended the tech sector's year-to-date gain to 19.7%. For comparison, the S&P 500 currently holds a year-to-date gain of 7.9%.
The Dow Jones Transportation Average also had a solid performance, adding 1.6%. However, small-caps lagged with the Russell 2000 (+0.1%) finishing just at tick above its unchanged mark.
U.S. Treasuries finished Thursday's session flat, giving little to no additional insight into investor sentiment; the benchmark 10-yr yield settled at its unchanged mark (2.25%). However, the CBOE Volatility Index (VIX 10.00, -0.02, -0.2%) settled around the historically-low 10.00 mark for the second day in a row, signaling that the market believes near-term risks are minor.
On the data front, investors received Initial Claims, April Advance International Trade in Goods, and April Advance Wholesale Inventories on Thursday:
- The latest weekly initial jobless claims count totaled 234,000 while the consensus expected a reading of 238,000. Today's tally was above the revised prior week count of 233,000 (from 232,000). As for continuing claims, they rose to 1.923 million from the revised count of 1.899 million (from 1.898 million).
- The key takeaway from the report is that the low level of initial claims continues to support the notion that employers are generally reluctant to cut staff, which is typically the case in the face of a tight labor market.
- The Advance report for International Trade in Goods for April showed a deficit of $67.6 billion, up from a revised deficit of $65.1 billion for March (from -$64.8 billion).
- April Advance Wholesale Inventories showed a 0.3% decline, down from a revised 0.1% uptick in March (from 0.2%).
Tomorrow, investors will receive several economic reports, including April Durable Orders (consensus -1.8%) at 8:30 ET, the second estimate of first quarter GDP (consensus 0.8%) also at 8:30 ET, and the final reading of the University of Michigan Consumer Sentiment Survey for May (consensus 97.5) at 10:00 ET.
- Nasdaq Composite +15.3% YTD
- S&P 500 +7.9% YTD
- Dow Jones Industrial Average +6.7% YTD
- Russell 2000 +1.9% YTD