Closing Stock Market SummaryThe stock market was in rally mode today, bouncing from oversold conditions. The S&P 500, which set a new low for the year yesterday (3623.29), broke a six-session losing streak and closed above the 3,700 level. The stage was set for a strong rebound effort before the stock market opened as Treasury yields fell in response to a Bank of England (BoE) bond purchase announcement. The major averages were all able to log big gains despite losses in Apple (AAPL 149.84, -1.92, -1.3%) following a Bloomberg report that the company plans to hold back on increasing production of the iPhone 14.
The 10-yr note yield breached the 4.00% level overnight before the BoE said it is going to postpone the sale of gilts slated to begin next week and instead carry out temporary purchases of UK government bonds between September 28 and October 14 in a bid to restore orderly market conditions. The 10-yr note yield dropped 26 basis points on the day to 3.71% and the 2-yr note yield dropped 21 basis points to 3.71%.
The U.S. Dollar Index also fell noticeably after the announcement, down 1.2% to 112.75 with GBP/USD +1.4% to 1.0879.
Buying was broad in nature with many stocks coming along for the ride. Apple, however, logged a decent loss following a Bloomberg report that indicated it's pulling back on a plan to increase production of its iPhone 14 beyond its original target of 90 million units due to weaker-than-expected demand.
Despite losses for Apple, the information technology sector was able to squeeze out a 0.9% gain. Notably, it finished the session in last place for the 11 S&P 500 sectors. Energy (+4.4%) and communication services (+3.2%) rose to the top of the leaderboard.
Communication services had Netflix (NFLX 245.20, +20.84, +9.3%) to thank for its gains after the company received an upgrade to Overweight from Neutral at Atlantic Equities.
Another bright spot in the market was health care (+2.2%), boosted by Biogen (BIIB 276.61, +78.82, +39.9%), which surged after reporting its early Alzheimer's treatment drug, Lecanemab, met its Phase 3 clinical trial primary endpoint.
Energy complex futures settled higher with WTI crude oil futures rising 4.1% to $81.96/bbl and natural gas futures rising 2.0% to $6.93/mmbtu.
Looking ahead to tomorrow, market participants will receive the following economic data:
- 8:30 ET: Weekly Initial Claims (consensus 213,000; prior 213,000), Continuing Claims (prior 1.379 mln), Q2 GDP -- third estimate ( consensus -0.6%; prior -0.6%), and Q2 GDP Deflator -- third estimate (consensus 8.9%; prior 8.9%)
- 10:30 ET: Weekly natural gas inventories (prior +103 bcf)
Reviewing today's economic data:
- Weekly MBA Mortgage Application Index showed a 3.7% drop following last week's 3.8% increase
- August Advance report for International Trade in Goods showed a deficit of $87.3 billion versus the revised deficit of $90.2 billion (from $89.1 billion) in July. The Advance report for Retail Inventories rose 1.4% versus the increase of 1.1% in July. The Advance report for Wholesale Inventories rose 1.3% versus July's revised increase of 0.6% (form 0.8%)
- August Pending Home Sales dropped 2.0% ( consensus -0.5%) following a revised 0.8% decrease (from 1.0%) in July
- Weekly EIA Crude Oil Inventories showed a draw of 0.215 million barrels after last week's 1.14 million barrel build
Dow Jones Industrial Average: -18.3% YTD
S&P Midcap 400: -20.3% YTD
S&P 500: -22.0% YTD
Russell 2000: -23.6% YTD
Nasdaq Composite: -29.4% YTD