Closing Stock Market SummaryThe stock market closed the session on a relatively upbeat note, but today's price action was somewhat lackluster on below-average volume. The major indices all closed near their highs of the day, sporting only modest gains.
Relative softness from the mega cap space in the early going limited index performance, yet moves below the surface were still somewhat modest. Some mega caps came back from early losses to close with a gain, offering a boost the major indices. Meta Platforms (META 238.86, +5.05, +2.2%) maintained its outperformance throughout the session after it was upgraded to Buy from Hold at Loop Capital. The Vanguard Mega Cap Growth ETF (MGK) closed with a 0.2% gain.
The continued inclination to buy mega cap stocks reflected the anxiousness in the market related to uncertainty about the debt ceiling. This comes ahead of President Biden's meeting with congressional leaders on Tuesday to further discuss the debt ceiling.
Regional bank stocks had a nice rally today, acting as a source of support for the broader market. The SPDR S&P Regional Banking ETF (KRE) logged a 3.2% gain and the S&P 500 financials sector (+0.8%) closed near the top of the leaderboard.
Strength from regional bank stocks, along with energy shares, led the Russell 2000 to outperform its peers today with a 1.2% gain.
Some M&A activity that featured premium valuations provided added support to the broader market. Namely, Newmont (NEM 47.09, +1.15, +2.5%) plans to acquire Newcrest for approximately $19 billion in a cash-and-stock deal, and Oneok (OKE 57.95, -5.77, -9.1%) plans to acquire Magellan Midstream Partners (MMP 62.61, +7.20, +13.0%) for approximately $18.8 billion, including assumed debt.
There was also some positive action on the regulatory front after EU regulators approved Microsoft's (MSFT 309.46, +0.49, +0.2%) acquisition of Activision (ATVI 78.33, +0.96, +1.2%).
S&P 500 sector performance was mixed, reflecting a lack of conviction from buyers and sellers. Aside from financials, the materials (+0.9%) and information technology (+0.7%) sectors were the top performers today. The utilities sector (-1.2%) was the worst performer by a wide margin. It was the only sector to move more than 1.0% in either direction.
Treasuries settled on a mostly lower note. The 2-yr note yield rose two basis points to 4.00% and the 10-yr note yield rose five basis points to 3.51%.
Today's economic data was limited to the New York Fed Empire State Manufacturing Survey for May, which plunged to -31.8 (consensus -1.8) from 10.8 in April. The dividing line between expansion and contraction for this survey is 0.0. The key takeaway from the survey is that the new orders index sank 53 points to -28.0, underscoring a sharp drop off in demand in May.
- Nasdaq Composite: +18.1% YTD
- S&P 500: +7.7% YTD
- Dow Jones Industrial Average: +0.6% YTD
- S&P Midcap 400: +0.9% YTD
- Russell 2000: UNCH YTD
Ahead of Tuesday's open, Baidu (BIDU), Home Depot (HD), Tencent Music (TME), and Sea Limited (SE) are among the notable companies reporting earnings.
Market participants will receive the following economic data on Tuesday:
- 8:30 ET: April Retail Sales (consensus 0.7%; prior -1.0%) and Retail Sales ex-auto (consensus 0.3%; prior -0.8%)
- 9:15 ET: April Industrial Production (consensus 0.0%; prior 0.4%) and Capacity Utilization (consensus 79.8%; prior 79.8%)
- 10:00 ET: March Business Inventories (consensus 0.0%; prior 0.2%) and May NAHB Housing Market Index (consensus 45; prior 45)
