Closing Stock Market Summary
Today's trade featured a strong positive bias. The S&P 500 (+1.0%) and Nasdaq Composite (+1.5%) were pushed to all-time highs in a broad advance. The former is now 0.4% higher this week and the latter is unchanged after a soft start to the week for stocks.
Upside moves were partially driven by carryover momentum from yesterday's rally, garnering added support from outperforming mega cap and semiconductor-related names. The Vanguard Mega Cap Growth ETF (MGK) logged a 1.4% gain and the PHLX Semiconductor Index (SOX) jumped 3.4% in front of earnings news this afternoon from some names in the space.
NVIDIA (NVDA 926.69, +39.69, +4.5%), which reached a new all-time today, Meta Platforms (META 512.29, +16.20, +3.3%), and Alphabet (GOOG 135.24, +2.68, +2.0%) were among the most influential winners in the market.
Advancing issues led declining issues by a 5-to-2 margin at the NYSE and by a 3-to-2 margin at the Nasdaq.
Strength in the mega cap and semiconductor spaces drove the outperformance of the S&P 500 information technology sector (+1.9%) and the communication services sector (+1.8%). Nine of the 11 sectors registered gains today while the financials (-0.2%) and real estate (-0.1%) sectors saw slim declines.
Today's positive bias was also stemming from some relief that Fed Chair Powell's remarks before the Senate Banking Committee did not produce any surprise headlines. Mr. Powell echoed prior comments, indicating that it will likely be appropriate to cut rates later this year if the economy evolves as expected. There's also some positive buzz around the potential for the ECB to cut rates later this year like the Fed is expected to.
This morning's economic data largely supported a soft landing scenario for the economy, which also contributed to today's upside bias. The 10-yr note yield hit 4.06% after the release of the weekly initial jobless claims, Q4 Productivity, and January Trade Balance Report, but it settled at 4.09%.
- S&P 500: +8.1% YTD
- Nasdaq Composite: +8.4% YTD
- S&P Midcap 400: +6.7% YTD
- Dow Jones Industrial Average: +2.9% YTD
- Russell 2000: +2.8% YTD
Reviewing today's economic data:
- Initial jobless claims for the week ending March 2 were unchanged at 217,000 (consensus 217,000). Continuing jobless claims for the week ending February 24 increased by 8,000 to 1.906 million.
- The key takeaway from the report is the low glide path initial claims (a leading indicator) continues to follow, which is indicative of a labor market that remains on a relatively encouraging glide path.
- Q4 Productivity growth was left unchanged at 3.2% (Briefing.com consensus 3.1%) while unit labor costs were revised down to 0.4% (consensus 0.6%) from 0.5%.
- The key takeaway from the report was the same as the one for the advance estimate: unit labor costs were tame in the fourth quarter thanks to the solid increase in productivity.
- The January trade deficit widened to $67.4 billion (consensus -$63.3 billion) from a downwardly revised $64.2 billion (from -$62.2 billion) for December. The widening was the result of imports being $3.6 billion more than December imports and exports being only $0.3 billion more than December exports.
- The key takeaway from the report is that the increase in imports and exports, most of which was concentrated in autos and capital goods, is indicative of a pickup in global trade that would be associated with a pickup in economic activity.
- Weekly EIA Natural Gas Inventories showed a draw of 40 bcf versus last week's draw of 96 bcf
Friday's economic calendar features:
- 8:30 ET: February Nonfarm Payrolls (consensus 195,000; prior 353,000), Nonfarm Private Payrolls (consensus 150,000; prior 317,000), Average Hourly Earnings (consensus 0.3%; prior 0.6%), Unemployment Rate ( consensus 3.7%; prior 3.7%), and Average Workweek (consensus 34.3; prior 34.1)