Closing Stock Market Summary
The major indices closed near their best levels of the day with gains ranging from 0.7% to 1.6%. Stocks experienced somewhat choppy action early on, but the rebound built up steam in the afternoon trade after Friday's close brought the the S&P 500 into correction territory (i.e., down 10%+ from a prior closing high).
Gains were fairly broad based, paced by outperforming mega caps. The Vanguard Mega Cap Growth ETF (MGK) jumped 1.5% versus a 1.2% gain in the market-cap weighted S&P 500. Apple (AAPL 170.29, +2.07, +1.2%) for its part logged a 1.0% gain ahead of its earnings report on Thursday.
The equal weighted S&P 500 climbed 0.8% and all 11 sectors registered a gain. The communication services (+2.1%) and financials (+1.7%) sectors led the pack while an additional five sectors climbed more than 1.0%. The energy sector (+0.3%) saw the slimmest gain.
The positive bias was partially tied to a buy-the-dip mentality after Friday's disappointing finish, aided by some corporate news and relief that the Israel-Hamas War is still a two-party war.
McDonald's (MCD 260.15, +4.39, +1.7%) reported impressive quarterly results; Stellantis (STLA 18.00, -0.04, -0.2%) and General Motors (GM 27.36, +0.14, +0.5%) reached tentative deals with the UAW; and Healthpeak (PEAK 15.98, -0.44, -2.7%) and Physicians Realty Trust (DOC 11.01, -0.06, -0.5%) announced an all-stock merger of equals valued at approximately $21 billion.
Participants were also gearing up for a busy week that includes the Bank of Japan policy decision overnight that might feature a tweak to the yield curve control policy, the ISM Manufacturing PMI on Tuesday, the FOMC decision on Wednesday, the Bank of England policy decision on Thursday, and the October Employment Situation Report and ISM Services PMI on Friday.
Semiconductor stocks were a notable pocket of weakness, sliding alongside ON Semiconductor (ON 65.34, -18.18, -21.8%), which reported better-than-expected Q3 results, but issued disappointing Q4 guidance. The PHLX Semiconductor Index fell 1.3%.
The U.S. Treasury quarterly refunding statement showed plans to borrow $776 billion in Q4, which is $76 billion below the estimate from three months ago. The 2-yr note yield rose two basis points to 5.05% and the 10-yr note yield climbed three basis points to 4.88%.
There was no U.S. economic data of note today.
- Nasdaq Composite: +22.2% YTD
- S&P 500: +8.5% YTD
- Dow Jones Industrial Average: -0.7% YTD
- S&P Midcap 400: -3.5% YTD
- Russell 2000: -6.5% YTD
Looking ahead, Tuesday's economic calendar features:
- 8:30 ET: October Chicago PMI (consensus 45.0; prior 44.1) and Q3 Employment Cost Index (consensus 1.0%; prior 1.0%)
- 9:00 ET: August FHFA Housing Price Index (prior 0.8%) and August S&P Case-Shiller Home Price Index (consensus 0.3%; prior 0.1%)
- 10:00 ET: October Consumer Confidence (consensus 100.0; prior 103.0)