Closing Stock Market SummaryThe S&P 500 decreased 0.5% on Monday, as money continued to flow out of the heavily-weighted growth stocks and into value/cyclical stocks. The former group contributed to the 2.4% decline in Nasdaq Composite (-2.4%), while the latter helped lift the Dow Jones Industrial Average (+1.0%) to an intraday record high. The Russell 2000 gained 0.5%.
Seven of the 11 S&P 500 sectors closed in positive territory, but it was hard to overcome the continued growth-stock weakness within the information technology (-2.5%), communication services (-1.5%), and consumer discretionary (-0.2%) sectors. The health care sector (-0.3%) was clipped by its biotechnology components.
The Vanguard Mega Cap Growth ETF (MGK 195.08, -4.45, -2.3) fell 2.3%. The Philadelphia Semiconductor Index fell 5.4%. The iShares Nasdaq Biotechnology ETF (IBB 147.23, -2.92, -1.9%) fell 1.9%. Shares of Tesla (TSLA 563.00, -34.95, -5.8%) gave up an early gain and closed sharply lower to extend its recent correction to 37% from its all-time high.
The S&P 500 was up as much as 1.0% in the afternoon on the back of a pro-cyclical trade that drew support from the Senate passing the $1.9 trillion stimulus bill and news that COVID-19 vaccine shots are running at more than two million per day. The stimulus bill will head back to the House, where it's expected to pass later this week.
The financials (+1.3%), materials (+1.3%), and industrials (+1.1%) represented the cyclical leadership, although the utilities sector (+1.4%) advanced the most as the market lost some of its cyclical luster in the second-half of the session. The S&P 500 slipped below its 50-day moving average (3825) on a closing basis.
Separately, another uptick in long-term interest rates, which have risen sharply this year in part due to growth optimism and inflation angst, was attributed by some as a lingering headwind for the growth stocks.
The 10-yr yield increased four basis points to 1.60%, although interestingly, widely-followed money manager David Tepper told CNBC that the 10-yr yield is likely at, or near, the top of a new range due to the higher yields attracting foreign buyers. Mr. Tepper also said stocks like Amazon (AMZN 2951.95, -48.51, -1.6%) look attractive.
The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index advanced 0.5% to 92.42. WTI crude futures declined 1.6%, or $1.05, to $65.04/bbl.
Monday's economic data was limited to Wholesale Inventories for January, which increased 1.3% m/m (Briefing.com consensus +1.3%) following a revised 0.6% increase in December (from 0.3%). Investors will not receive any notable economic data on Tuesday.
- Russell 2000 +11.6% YTD
- Dow Jones Industrial Average +3.9% YTD
- S&P 500 +1.7% YTD
- Nasdaq Composite -2.2% YTD