Closing Stock Market SummaryU.S. stocks advanced for the third straight session on Thursday, boosted by positive earnings reports from Cisco Systems (CSCO 55.93, +3.49, +6.7%) and Wal-Mart (WMT 101.31, +1.43, +1.4%). The 0.9% gain in the S&P 500 helped the benchmark index reclaim its 50-day moving average (2866) on a closing basis.
The Dow Jones Industrial Average increased 0.8%, the Nasdaq Composite increased 1.0%, and the Russell 2000 increased 0.6%.
One can attribute Thursday's broad-based rally to several factors: (1) the earnings beats from Dow components Cisco and Wal-Mart, (2) a steady U.S. economy that was reflected in a pick-up in April housing starts, and (3) reduced trade anxiety despite an executive order signed by President Trump that was viewed as an attempt to stifle China's Huawei Technologies.
Early efforts to buy risk assets presumably prompted some short-covering activity that also gave stocks an added boost out of the gate. All 11 S&P 500 sectors finished higher with gains ranging from 0.4% (energy) to 1.3% (materials).
Boeing (BA 353.81, +8.17, +2.4%) was a notable standout. Shares received a late-session boost after the company said it has "flown the 737 MAX with updated MCAS software for more than 360 hours on 207 flights."
Many stocks within the Philadelphia Semiconductor Index (-1.7%), however, did not participate in today's advance. The semiconductor space was pressured by President Trump signing an executive order on Wednesday to protect U.S. technology from "foreign adversaries" that pose a threat to national security.
Many viewed the order as an attempt to restrict Huawei from conducting business with U.S. companies, which include Qualcomm (QCOM 82.81, -3.45, -4.0%) and Lumentum (LITE 50.20, -6.55, -11.5%) among other semiconductor companies.
U.S. Treasuries retreated on Thursday, driving yields higher, as investors embraced a risk-on mindset. The 2-yr yield increased four basis points to 2.20%, and the 10-yr yield increased three basis points to 2.41%. The U.S. Dollar Index increased 0.3% to 97.82. WTI crude rose 1.5% to $62.99/bbl.
Reviewing Thursday's economic data, which included Housing Starts and Building Permits for April, the weekly Initial and Continuing Claims report, and the Philadelphia Fed Index for May:
- Housing starts increased 5.7% m/m in April to a seasonally adjusted annual rate of 1.235 million (consensus 1.200 mln), led by a 6.2% increase in single-unit starts. Building permits rose 0.6% m/m to 1.296 million ( consensus 1.280 mln), although permits for single-unit dwellings declined 4.2%.
- The key takeaway from the report, however, is that there hasn't been any acceleration in building activity. Total housing starts are down 2.5% yr/yr and single-unit starts are down 4.3% yr/yr.
- Initial claims for the week ending May 11 decreased by 16,000 to 212,000 (consensus 222,000). Continuing claims for the week ending May 4 decreased by 28,000 to 1.66 million.
- The key takeaway from the report is that the initial claims level remains consistent with a tight labor market that is expected to translate into another month of solid nonfarm payrolls growth.
- The Philadelphia Fed Index for May jumped to 16.6 (Briefing.com consensus 7.5) from 8.5 in April. The dividing line between expansion and contraction is 0.0.
- The key takeaway from the report is that firms were more optimistic about hiring plans over the next six months, which suggests they expect end demand to remain solid.
Looking ahead, investors will receive the preliminary University of Michigan Index of Consumer Sentiment for May and the Conference Board's Leading Economic Index for April on Friday.
- Nasdaq Composite +19.0% YTD
- Russell 2000 +15.5% YTD
- S&P 500 +14.7% YTD
- Dow Jones Industrial Average +10.9% YTD
Jeff Koons sculpture sells for $91m in new record
‘Rabbit’ sale knocks David Hockney from the top spot for living artists
A Jeff Koons sculpture, titled “Rabbit”, sold for $91.1m at Christie’s in New York on Wednesday evening, setting a new record for a work sold at auction by a living artist.
The record was previously held by David Hockney for a painting sold in November for $90.2m. Both works sold for the same hammer price at auction, $80m, but the higher premium for the Koons sculpture gave it the record. Koons, who turned 64 this year, held the record previously to Hockney.
The sculpture took 10 minutes and 40 seconds to sell for the record amount. The buyer was the Mnuchin Gallery, owned by Robert Mnuchin, the art dealer and former banker who is the father of US Treasury secretary Steven. He was acting as an agent on behalf of a client.
Produced in 1986, the sculpture stands at 3 feet tall. Its appearance resembles an inflatable balloon, but it is made from stainless steel. The faceless rabbit holds a carrot to its mouth.
“Rabbit” is one of three productions by the artist and is the last edition left in private hands. This version of “Rabbit” has not been displayed in public since 1988. It’s likeness appeared as a Macy’s Thanksgiving Day Parade balloon in 2007.
Other notable sales of the evening included Robert Rauschenberg’s “Buffalo II” which sold for $88.8m and Andy Warhol’s “Double Elvis” which went for $53m with premium. “Spider”, a painting by Louise Bourgeois, sold for $32m, the second-highest amount for a female artist. Georgia O’Keefe holds the record.
“Rabbit” was one of six works sold on Wednesday’s postwar and contemporary art evening auction from the collection of Samuel Irving Newhouse Jr. Among the other of Mr Newhouse’s works at auction were Andy Warhol’s “Little Electric Chair” and Roy Lichtenstein’s “Landscape with Boats”.
Mr Newhouse, who died in 2017, was an heir to the media conglomerate that includes Condé Nast. The Newhouse collection brought in a total of $216m.
In total, the auction house set seven records on Wednesday. Six of the lots had been at auction in the past 20 years. Christie’s brought in $538m for the evening sale.
A record was also set for Jonas Wood, who’s painting “Japanese Garden 3” was donated by the artist with instructions that the proceeds go toward rainforest preservation in Colombia. It sold for $4.9m and will be matched four times over.
U.S. HOUSE SPEAKER NANCY PELOSI SAYS TRUMP ADMINISTRATION MUST RECOGNIZE THAT IT DOES NOT HAVE CONGRESSIONAL AUTHORIZATION FOR WAR ON IRAN
Huawei is a risk so Britain must change course on 5G, ex-MI6 spymaster says -https://reut.rs/2JnkLov
LONDON (Reuters) - China’s Huawei poses such a grave security risk to the United Kingdom that the government must not allow it to have even a limited role in building 5G networks, a former head of Britain’s MI6 foreign spy service said on Thursday.
In what some have compared to the Cold War arms race, the United States is worried that 5G dominance would give any global competitor such as China an advantage Washington is not ready to accept.
The Trump administration, which hit Huawei with severe sanctions on Wednesday, has told allies not to use its technology because of fears it could be a vehicle for Chinese spying. Huawei has repeatedly denied this.
But British ministers have discussed allowing Huawei a restricted role in building parts of its 5G network. The final decision has not yet been published.