Closing Stock Market SummaryThe S&P 500 advanced 2.3% on Wednesday, recouping some of its weekly decline, as sentiment benefited from a reprieve in the oil futures market and more stimulus action. The Nasdaq Composite outperformed with a 2.8% gain, followed by the Dow Jones Industrial Average (+2.0%) and Russell 2000 (+1.4%).
Specifically, WTI crude futures gained 19.3%, or $2.23, to $13.80/bbl after a two-day collapse, and the Senate passed a $484 billion stimulus bill targeted for small businesses, hospitals, and COVID-19 testing. What's interesting, though, is that stocks were already indicated for a higher start as oil futures initially traded lower, and the market barely reacted to the initial news of a stimulus agreement yesterday.
To be fair, the reprieve in oil prices might have warranted follow-through buying after the open, and the stimulus bill is now one step closer to providing much-needed relief. A general observation that the S&P 500 declined 4.8% over the past two days, thus presenting a suitable entry point for some investors, likely contributed to the gains, too.
The advance was steady and broad-based, with all 11 S&P 500 sectors closing in positive territory. The information technology sector (+3.9%) leaped ahead amid strength in the semiconductor stocks, which rallied around a positive earnings report from Texas Instruments (TXN 111.98, +5.14, +4.8%). The consumer staples sector (+1.1%) underperformed.
Facebook (FB 182.28, +11.48, +6.7%) and Alphabet (GOOG 1263.21, +3.9%) also did some heavy lifting, partially due to the overwhelmingly positive response to Snap's (SNAP 16.95, +4.51, +36.3%) revenue results.
Chipotle Mexican Grill (CMG 882.26, +95.57, +12.2%) was another earnings standout, while shares of Netflix (NFLX 421.42, -12.41, -2.9%) and AT&T (T 29.47, -0.40, -1.3%) declined following their results.
U.S. Treasuries finished on a lower note with longer-dated maturities backtracking from their recent advance. The 2-yr yield increased one basis point to 0.21%, and the 10-yr yield increased five basis points to 0.62%. The U.S. Dollar Index increased 0.1% to 100.40.
Reviewing Wednesday's economic data:
- The FHFA Housing Price Index for April rose 0.7% after increasing an upwardly revised 0.5% in March (from +0.3%).
- The weekly MBA Mortgage Applications Index declined 0.3% following a 7.3% increase in the prior week.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the New Home Sales report for March on Thursday.
- Nasdaq Composite -5.3% YTD
- S&P 500 -13.4% YTD
- Dow Jones Industrial Average -17.7% YTD
- Russell 2000 -28.0% YTD