Closing Stock Market Summary
The stock market closed out the week in rally-mode. A strong showing from mega cap stocks, and semiconductor stocks, which rallied on a pleasing October sales update from Taiwan Semiconductor Manufacturing Co. (TSM 97.44, +5.82, +6.4%), had an outsized influence on index gains. Many other stocks, though, participated in today's upside move. The major indices all closed near their highs of the day, which had the S&P 500 above the 4,400 level.
The Vanguard Mega Cap Growth ETF (MGK) rose 2.0%, which brought its gain this week to 3.4%, and the PHLX Semiconductor Index jumped 4.0%. Apple (AAPL 186.40, +4.23, +2.3%), Microsoft (MSFT 369.67, +8.98, +2.5%), Amazon.com (AMZN 143.56, +2.96, +2.1%), and NVIDIA (NVDA 483.35, +13.85, +3.0%) all jumped more than 2.0% today.
Meanwhile, the market-cap weighted S&P 500 logged a 1.6% gain today and a 1.3% gain on the week. The S&P 500 equal weighted index was up 1.2% today, but declined 0.6% for the week.
Price action in the early going was more muted as Treasury yields climbed off overnight lows in response to this morning's release of the preliminary November University of Michigan Index of Consumer Sentiment.
The report showed a drop in sentiment to 60.4 from 63.8 in October, marking the fourth straight monthly decline, and a bump in year-ahead inflation expectations to 4.4% from 4.2% and five-year inflation expectations to 3.2% from 3.0%.
The 10-yr note yield, at 4.59% just before the 10:00 a.m. ET release, settled at 4.63%, which was unchanged from yesterday. The 2-yr note yield, at 4.98% just before the data, climbed four basis points today to 5.05%.
Despite the move in yields, buying activity picked up in equities around 11:00 a.m. ET with no specific catalyst. Just about everything came along for the afternoon rally. 26 of the 30 Dow components logged a gain and all 11 S&P 500 sectors closed in the green with eight sectors logging a gain of at least 1.1%.
The information technology sector (+2.6%) led the pack thanks to gains in Apple, Microsoft, and NVIDIA. The defensive-oriented utilities (+0.6%) and health care (+0.5%) sectors saw the slimmest gains.
- Nasdaq Composite: +31.8% YTD
- S&P 500: +15.0% YTD
- Dow Jones Industrial Average: +3.4% YTD
- S&P Midcap 400: +0.4% YTD
- Russell 2000: -3.2% YTD
Reviewing today's economic data:
- November Univ. of Michigan Consumer Sentiment - Prelim 60.4 (consensus 63.7); Prior 63.8
- The key takeaway from the report is the jump in inflation expectations, which is not what the Fed wants to see following 525 basis points worth of tightening already. It is the type of indication that will keep the Fed entertaining the thought that further tightening may still be necessary.
Looking ahead, there is no economic data of note on Monday.