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Closing Market Summary: Wall Street Locks In Big Weekly Gains

Equities ticked higher on Friday, locking in big gains for the week, as a positive performance from the health care sector narrowly outweighed a modest pullback from the information technology group. The S&P 500 and the Dow added 0.2% and 0.4%, respectively, while the tech-heavy Nasdaq underperformed, closing a tick below its flat line. All three indices finished with weekly gains of more than 2.0%.

The market drifted flat to slightly higher for the bulk of Friday's session, but volatility picked up briefly in the afternoon when President Trump unveiled a blueprint for lowering drug prices. The president plans to increase competition within the drug space and to change rules that have allowed some drugmakers to game the system. The blueprint lacked many details, however, prompting a sigh of relief from investors, who were worried about the possibility of imminent regulation. Health-related names rallied into the close, leaving the S&P 500's health care sector with a gain of 1.5%.

Telecom services was the only group to outperform health care on Friday, largely thanks to Verizon (VZ 48.62, +1.42), which rallied after JPMorgan upgraded shares to 'Overweight' from 'Neutral'; the telecom services group finished with a gain of 2.1%, while Verizon shares ended higher by 3.0%.

The only other sectors to finish in the green were industrials, consumer discretionary, and utilities, but their gains were modest at 0.2% apiece. On the downside, six sectors finished in the red, but no group lost more than 0.5%. The technology group was among the worst performers, closing lower by 0.3%, which posed a problem for the broader market given the group's huge influence; technology is the top-weighted S&P 500 sector, representing around a quarter of the broader market alone.

Shares of chipmaker NVIDIA (NVDA 254.53, -5.60) declined 2.2%, retreating from an all-time high, amid a "sell the news" response to the company's first quarter results, which came in better-than-expected. Separately, Apple (AAPL 188.59, -0.72) shares broke their nine-session winning streak, slipping 0.4%, and shares of Symantec (SYMC 19.52, -9.66) plunged 33.1% after the company announced that it has relayed concerns from an ex-employee to the SEC.

Outside of equities, U.S. Treasuries finished Friday on a flattish note, with the benchmark 10-yr yield holding steady at 2.97%. Meanwhile, WTI crude futures declined 0.9% to $70.70 per barrel, slipping from a three-and-a-half year high, and the U.S. Dollar Index dropped for the third day in a row, slipping 0.2% to 92.41.

Reviewing Friday's economic data, which was limited to April Import/Export Prices and the preliminary reading of the University of Michigan Consumer Sentiment Index for May:

• Import prices excluding oil rose 0.2% in April after rising a revised 0.1% in March (from +0.2%). Export prices excluding agriculture increased 0.7% after holding flat last month (revised from -0.1%).
  • The key takeaway from the report is that overall import price pressures moderated on a year-over-year basis while nonfuel import prices remain at palatable levels on a year-over-year basis.
• The preliminary reading of the University of Michigan Consumer Sentiment Index for May held steady at 98.8 (consensus 98.0).
  • The key takeaway from the report is that there was some slippage in income expectations and a small uptick in the one-year inflation expectation to 2.8% from 2.7%.

Investors will not receive any economic data on Monday.

• Nasdaq Composite: +7.2% YTD
• Russell 2000: +4.6% YTD
• S&P 500: +2.0% YTD
• Dow Jones Industrial Average: +0.5% YTD

This week's biggest % gainers/losers

 The following are this week's top 20 percentage gainers and top 20 percentage losers, categorized by sectors (over $300 mln market cap and 100K average daily volume).

This week's top 20 % gainers

• Healthcare: OPK (4.52 +43.49%), DEPO (7.54 +27.15%), NVTA (6.92 +25.82%), OMER (19.89 +24.47%), SUPN (57.05 +24.43%), MYGN (34.86 +24.37%)
• Materials: FRTA (8.83 +27.6%)
• Industrials: ARCB (47.3 +39.94%), CECE (5.87 +25.32%)
• Consumer Discretionary: LTRPA (12.35 +35.71%), SUP (16.85 +29.62%), NCMI (7.23 +29.57%), FOSL (18.57 +27.98%), TRIP (48.99 +27.15%)
• Information Technology: PI (17.08 +31.28%), BCOR (33.45 +29.9%), VDSI (20.4 +27.5%)
• Financials: LC (3.32 +25.28%)
• Energy: EPE (2.88 +44%)
• Consumer Staples: DF (10.47 +24.64%)

This week's top 20 % losers

• Healthcare: AMPH (14.91 -20.56%), NVRO (76.7 -17.08%)
• Industrials: HDSN (2.63 -33.71%), CSTE (12.85 -31.47%), KELYA (24.5 -19.11%), HTZ (17.68 -17.27%)
• Consumer Discretionary: MDCA (4.35 -40%), ETM (7.5 -27.88%), FTD (4.77 -24.88%), CWH (21.85 -17.2%)
• Information Technology: GOGO (5.46 -34.45%), SNCR (7.03 -32.85%), SYMC (19.52 -29.89%), EXTR (8.35 -23.67%), MXL (18.89 -19.38%), MGI (6.87 -18.89%)
• Telecommunication Services: TEO (22.2 -20.74%), FTR (9.03 -20.37%)

Four-on the-floor is an idiom for a manual transmission that helps make a car go. With that in mind, we present four key catalysts today that are driving the stock market in the early going:

• Resilience to selling pressure
  • Entering today, the S&P 500 was up 5% from its intraday low on May 3.  Some selling interest from a short-term overbought position was probably expected, yet the lack of selling pressure has continued to feed buying efforts.
  • A "fear of missing out" on further gains has acted as an underpinning factor in the early going
• Relative strength in the S&P 500 health care sector (+0.7%)
  • President Trump will present a plan 2:00 p.m. ET today that will be aimed at lowering drug costs for consumers.  Reports suggesting that plan won't be as penalizing as feared for drug companies and pharmacy benefit managers has fostered a bit of a relief bid in the sector.
  • Biotech stocks are also bouncing back following sharp losses of late: Regeneron Pharma (REGN 301.83, +12.93, +4.5%), Gilead Sciences (GILD 65.92, +0.55, +0.8%), Celgene (CELG 83.31, +0.93, +1.1%) and Biogen (BIIB 280.36, +6.36, +2.3%) are among today's upside leaders helping to contribute to the outperformance of the iShares Nadaq Biotechnology ETF (IBB 105.41, +1.70, +1.6%)
• Transportation stocks are on the move
  • Trucker Arkansas Best (ARCB 45.70, +8.75, +23.7%) gave the industry a boost with a better than expected earnings report, replete with signs of an improved pricing environment.
  • Dow Jones Transportation Average, which is looked upon as a leading indicator, is up 1.3% today
• The S&P 500 information technology sector (-0.02%) is underperforming, but not undercutting the market
  • The sector is up 3.8% this week and up 7.7% this month, which leaves it ripe for some profit-taking activity
  • Encouraging to see, however, that broader market is holding up without the tech sector's support as money rotates within the market and not out of the market because of the tech sector's underperformance

The Dow Jones Industrial Average is up 0.5%; The S&P 500 is up 0.3%; the Russell 2000 is up 0.3%; and the Nasdaq Composite is up 0.1%.

Gapping down
In reaction to disappointing earnings/guidance:

• SYMC -27%, SGYP -10.4%, HALO -8.4%, FLS -7.9%, TLND -7.7%, XON -7.2%, RDFN -6.9%, FATE -5.6%, YELP -4.8%, CASA -2.9%, TIVO -2.8%, DBX -2.5%, SENS -2.5%, NVDA -2.4%, NWSA -1.4%, WBAI -1.4%, CIVI -1.1%, NKTR -1%

Other news:

• JRVR -4.6% (shareholders intend to offer in an underwritten public offering an aggregate of 3,297,238 of the Company's common shares)
• WAGE -2.3% (files to delay 10-Q; is continuing its review of financial statements/ internal controls )
• MDXG -2% (files to delay 10-Q )
• PUMP -1.7% (prices underwritten public offering of 12 mln shares of its common stock by certain selling securityholders at a price of $19.10 per share)
• WPM -1.7% (confirms new precious metals purchase agreement with First Majestic Silver Corp)
• MGM -1.2% (Board authorized a new $2.0 billion share repurchase program)
• VIRT -0.8% (prices secondary offering of 15 mln shares of common stock $28.00 per share)

Analyst comments:

• KSS -1.5% (downgraded to Neutral from Outperform at Credit Suisse)
• COTY -2.1% (downgraded to Hold from Buy at Deutsche Bank)

Gapping up
In reaction to strong earnings/guidance:

• TTD +24.9%, IMMR +14.4%, OMER +11.6%, GLOB +7.8%, MCFT +6.8%, VRAY +5.9%, NDLS +5.8%, FSCT +5.6%, UEPS +5.6%, ARCB +5.5%, PPC +4.5%, ASYS +4.1%, KTOS +3.7%, TRI +3.3%, MT +2.2%, RICK +1.5%, AVID +1.2%, SSRM +0.7%, HUBS +0.7%

Other news:

• AKCA +16.2% (Akcea Therapeutics confirms FDA Advisory Committee votes in favor of WAYLIVRA for treatment of familial chylomicronemia syndrome)
• IONS +4.1% (confirms FDA Advisory Committee votes in favor of WAYLIVRA for treatment of familial chylomicronemia syndrome)
• XRX +2.3% (attributed to CNBC mention on Fast Money)
• MOS +1.5% (appoints Gregory Ebel to succeed Robert Lumpkins as Chairman; names Clint Freeland as CFO effective June 4; upgraded to Outperform from Sector Perform at RBC Capital Mkts)
• CHRW +0.6% (increases share repurchase authorization by $15 mln shares of common stock)

Analyst comments:

• SRPT +2.1% (upgraded to Overweight from Equal Weight at Barclays)
• VZ +1.6% (upgraded to Overweight from Neutral at JP Morgan)