Closing Stock Market Summary
Today's price action was somewhat mixed. The Dow Jones Industrial Average was a relative outperformer, climbing 1.5%, due in part to a big gain in Salesforce (CRM 251.90, +21.55, +9.4%) after impressing with its earnings results and outlook after yesterday's close.
The S&P 500 and Nasdaq Composite, meanwhile, spent most of the session pinned in negative territory due to lagging mega cap constituents. The Vanguard Mega Cap Growth ETF (MGK) closed with a 0.1% loss and the Nasdaq Composite fell 0.2%.
An uptick in buying activity in the last half hour of trading left the S&P 500 near its high of the day with a 0.4% gain. The equal-weighted S&P 500, which outperformed the market-cap weighed index throughout the session, rose 0.9% today.
The S&P 500 sectors also reflected the underperformance of mega cap stocks. Communication services (-1.0%), consumer discretionary (-0.2%), and information technology (-0.1%) were the only sectors to register a decline today. The health care (+1.3%), industrials (+1.1%), financials (+1.0%), and materials (+1.0%) sectors all climbed at least 1.0%.
The outperformance of the broader market comes in the wake some economic data today that featured a moderation in income and spending, and disinflation in the PCE Price Indexes in October, a much stronger-than-expected Chicago PMI for November, and a relatively low level of initial jobless claims.
Treasury yields backed up some in response to the data, which kept some buyer enthusiasm in check in the stock market. The 2-yr note yield, at 4.61% before 8:30 a.m. ET, settled four basis points higher at 4.70%. The 10-yr note yield, at 4.27% before the data, settled eight basis points higher at 4.35%. Still, yields have come down a lot since the start of November. The 2-yr note and 10-yr note declined 38 basis points and 53 basis points, respectively, this month.
In other news, WTI crude oil futures fell 2.4% today to $75.96/bbl after briefly climbing past their 200-day moving average (78.15). On a related note, several OPEC+ countries confirmed additional voluntary cuts to the total of 2.2 million barrels per day, beginning January 1 through the end of March 2024.
- Nasdaq Composite: +35.9%
- S&P 500: +19.0%
- Dow Jones industrial Average: +8.5%
- S&P Midcap 400: +5.5%
- Russell 2000: +2.7%
Reviewing today's economic data:
- October Personal Income 0.2% (consensus 0.2%); Prior was revised to 0.4% from 0.3%; October Personal Spending 0.2% (consensus 0.2%); Prior 0.7%; October PCE Prices 0.0% (consensus 0.1%); Prior 0.4%; October PCE Price - Core 0.2% (consensus 0.2%); Prior 0.3%
- The key takeaway from this report is the disinflation seen in the PCE Price Indexes, which is good; however, the 3.5% increase in core PCE, which is what the Fed focuses on, remains well above the 2.0% target. It's moving in the right direction fortunately, but that isn't the type of reading that will move the Fed to think about cutting rates soon.
- Weekly Initial Claims 218K (consensus 215K); Prior was revised to 211K from 209K; Weekly Continuing Claims 1.927 mln; Prior was revised to 1.841 mln from 1.840 mln
- The key takeaway from the report is that layoff activity remains relatively subdued, which is a good thing. The bad thing, and what fits with a softening labor market, is that it is becoming more difficult to find a job after a layoff.
- November Chicago PMI 55.8 (consensus 45.0); Prior 44.0
- October Pending Home Sales -1.5% (consensus -2.3%); Prior was revised to 1.0% from 1.1%
Friday's economic calendar features:
- 9:45 ET: Final November S&P Global U.S. Manufacturing PMI (prior 49.4)
- 10:00 ET: November ISM Manufacturing Index (consensus 47.5%; prior 46.7%) and October Construction Spending (consensus 0.3%; prior 0.4%)