Closing Stock Market Summary
The stock market saw ongoing rebound action today, which began late Tuesday following the CPI-induced sell-off. Some of the heaviest stocks were left out, though, falling under some profit-taking activity and limiting index level moves for the S&P 500 and Nasdaq Composite. Still, today's upside moves left the S&P 500 higher than Monday's close (5021.84) ahead of the CPI report.
The Russell 2000, which jumped 2.4% today, also recovered all the ground it lost after sliding 4% on Tuesday in response to the CPI report.
Apple (AAPL 183.86, -0.29, -0.2%), Microsoft (MSFT 406.56, -2.93, -0.7%), Alphabet (GOOG 143.94, -3.20, -2.2%), Amazon.com (AMZN 169.79, -1.18, -0.7%), and NVIDIA (NVDA 726.58, -12.42, -1.7%) were among the influential losers today.
Losses in some of the aforementioned names left the S&P 500 information technology sector alone in negative territory at the close with a 0.4% decline. Cisco (CSCO 49.06, -1.22, -2.4%) was another notable loser from the sector after reporting fiscal Q2 results and issuing a disappointing outlook that featured a plan to reduce its workforce by approximately 5%.
Broad based buying activity left the ten remaining S&P 500 sectors higher today, and five of them gained more than 1.0%. The energy sector, which rose alongside WTI crude oil futures ($78.00/bbl, +1.36, +1.8%), and the real estate sector, which benefitted from another pullback in market rates, each jumped more than 2.0%.
A slight moderation in interest rates provided a measure of support to the stock market today, but Treasuries settled off their highs, which were reached following a slate of economic releases. This morning's data showed below-consensus Retail Sales for January (actual -0.8%; consensus -0.2%), an unexpected drop in jobless claims to 212,000 (consensus 221,000), and better than expected readings of manufacturing surveys from New York (actual -2.4; consensus -9.0) and Philadelphia (actual 5.2; Briefing.com consensus -9.0).
The 2-yr note yield fell two basis points to 4.56% after hitting 4.50% after the economic releases. The 10-yr note yield fell three basis points to 4.24% after hitting 4.19% earlier.
- Nasdaq Composite: +6.0% YTD
- S&P 500: +5.5% YTD
- Dow Jones Industrial Average: +2.9% YTD
- S&P Midcap 400: +2.6% YTD
- Russell 2000: +1.7% YTD
Reviewing today's economic data:
- Retail sales declined 0.8% month-over-month in January (consensus -0.2%) following a downwardly revised 0.4% increase (from 0.6%) in December. Excluding autos, retail sales declined 0.6% month-over-month (consensus 0.1%) following an unrevised 0.4% increase in December.
- The key takeaway from the report is that it reflects a slowdown in spending on goods in January. Some brutally cold weather during the month will get some blame for the slowdown, but that excuse falls short as the primary driver knowing that sales at nonstore retailers (the bulk of which are online retailers) declined 0.8% month-over-month.
- Initial jobless claims for the week ending February 10 decreased 8,000 to 212,000 (consensus 221,000). Continuing jobless claims for the week ending February 3 increased 30,000 to 1.895 million.
- The key takeaway from the report is that the low level of initial claims support an economy operating in growth mode; however, the rising level of continuing jobless claims underscores a rising level of challenge in finding a new job after a layoff.
- January import prices increased 0.8% month-over-month. Excluding fuel, import prices were up 0.7%. Export prices also increased 0.8% month-over-month. Excluding agricultural products, export prices were up 0.9%.
- The key takeaway from the report was the deflation seen in year-over-year readings. Import prices were down 1.3% (and down 0.3% excluding fuel) while export prices were down 2.4% (and down 1.6% excluding agricultural products).
- The February New York Empire State Manufacturing Index checked in at -2.4 (consensus -9.0) following a -43.7 reading for January. The dividing line between expansion and contraction for this series is 0.0, so the February reading connotes an ongoing contraction, albeit at a much slower pace than what was seen in January.
- The February Philadelphia Fed Index checked in at 5.2 (Bconsensus -9.0) versus -10.6 in January. The dividing line between expansion and contraction for this series is 0.0, so the February reading reflects an expansion in manufacturing activity in February.
- Total industrial production decreased 0.1% month-over-month in January (consensus 0.4%) after a revised unchanged reading (from 0.1%) in December. The capacity utilization rate was 78.5% ( consensus 78.9%), versus an upwardly revised 78.7% (from 78.6%) for December. Total industrial production was flat yr/yr while the capacity utilization rate was 1.1 percentage points below its long-run average.
- The key takeaway from the report is that the drop in industrial production in January was unduly influenced by weather-related issues, so the decline isn't necessarily as bad as the headline suggests.
- Business inventories increased 0.4% in December (consensus 0.4%) following a revised 0.1% decline in November.
- The NAHB Housing Market Index jumped to 48 in February (consensus 46) from 44 in January.
- Weekly EIA Natural Gas Inventories showed a draw of 49 versus a draw of 75 bcf last week
Looking ahead, Friday's economic calendar features:
- 8:30 ET: January Housing Starts (consensus 1.47 million; prior 1.46 million) and Building Permits (consensus 1.51 million; prior 1.495 million); January PPI (consensus 0.1%; prior -0.2%) and core-PPI (Briefing.com consensus 0.1%; prior 0.0%)
- 10:00 ET: February preliminary University of Michigan Consumer Sentiment Survey (consensus 79.3; prior 79.0)