Closing Stock Market SummaryThe S&P 500 rose 1.4% on Thursday, bouncing back from two days of sharp losses. The Dow Jones Industrial Average (+1.8%) and Russell 2000 (+2.7%) outperformed the benchmark index, while the Nasdaq Composite underperformed on a relative basis with a 0.8% gain.
Supportive factors included 1) a bargain-hunting mindset amid an increasing number of stocks trading near 52-week lows, 2) a view that the Omicron variant might not be as bad as feared after the second reported case in the U.S. produced mild symptoms in a vaccinated person like the first case, and 3) a recognition that the S&P 500 reclaimed its 50-day moving average (4543).
All 11 S&P 500 sectors closed higher, featuring leadership positions from the cyclical industrials (+2.9%), energy (+2.9%), financials (+2.8%), and materials (+2.0%) sectors. The information technology (+0.8%), consumer staples (+0.8%), and health care (+0.4%) sectors trailed with more modest gains.
The relative underperformance of the Nasdaq was due to softness in Apple (AAPL 163.76, -1.01, -0.6%), Microsoft (MSFT 329.49, -0.59, -0.2%), Amazon.com (AMZN 3437.36, -6.36, -0.2%), Tesla (TSLA 1084.60, -10.40, -1.0%), and Facebook (FB 310.39, -0.21, -0.1%).
Apple was pressured by a report from Bloomberg indicating that the company told suppliers that demand for the iPhone 13 has weakened. AAPL shares declined 0.6%, but they were down as much as 4.2% shortly after the open.
Boeing (BA 202.38, +14.19, +7.5%) stood out with a 7.5% gain on news that China may soon allow the 737 MAX to return to flight. Snowflake (SNOW 360.38, +49.28, +15.9%) and Kroger (KR 44.65, +4.44, +11.0%) rallied noticeably following their earnings reports.
Elsewhere, the Treasury yield curve experienced some flattening activity amid a rise in shorter-dated rates. The 2-yr yield increased five basis points to 0.61%, and the 10-yr yield increased one basis point to 1.45%. The U.S. Dollar Index increased 0.1% to 96.14. WTI crude futures settled higher by 1.6%, or $1.03, to $66.64/bbl.
Strikingly, WTI crude futures were down more than 4.0% immediately after it was reported that OPEC+ agreed to stick to its planned production schedule for January. There was some speculation that the ministers would adjust production because of the Omicron variant and the U.S.-led effort for nations to tap into their oil reserves.
Reviewing Thursday's economic data:
- For the week ending November 27, initial jobless claims increased by 28,000 to 222,000 (consensus 255,000). Continuing claims for the week ending November 20 decreased by 107,000 to 1.956 million.
- The key takeaway from the report is that initial jobless claims are firming up at lower levels seen before the start of the pandemic.
Looking ahead to Friday, investors will receive the Employment Situation Report for November, the ISM Non-Manufacturing Index for November, Factory Orders for October, and the final IHS Markit Services PMI for November.
- S&P 500 +21.9% YTD
- Nasdaq Composite +19.3% YTD
- Dow Jones Industrial Average +13.2% YTD
- Russell 2000 +11.7% YTD