The stock market began the trading week with a broad-based rally, which unfolded after a range-bound start to the trading day. The S&P 500 gained 1.5% while the Nasdaq Composite (+1.2%) underperformed throughout the session.
Overnight, it was reported that the Japanese economy has re-entered recession for the second time in as many years as Q3 GDP contracted 0.2% quarter-over-quarter (expected -0.1%; last -0.3%), according to the preliminary reading. Naturally, that news was met with hopes for more monetary support from the Bank of Japan, which boosted global equities while the yen retreated, sending the dollar/yen pair higher by 0.5% to 123.20. That being said, Japan's Nikkei could not stay in the green, falling 1.0%.
Once the focus turned to the U.S., stocks began the day with slim losses, but the opening weakness was erased promptly. The S&P 500 spent the first two hours of the day just above its flat line, but the index extended its gain during the afternoon with the energy sector (+3.3%) setting the pace.
The energy space extended its lead during afternoon action, aided by a 2.5% spike in crude oil, which put a sizable dent into last week's 8.2% decline. For its part, the energy sector was able to erase almost half of its 5.5% drop from last week.
Unlike energy, the remaining cyclical groups settled behind the broader market with the top-weighted technology sector (+1.4%) ending just behind the benchmark index. Large cap sector components had a solid showing throughout the day while chipmakers rallied into the close with the PHLX Semiconductor Index ending higher by 1.3%.
Elsewhere, financials (+1.3%) and consumer discretionary (+1.2%) spent the morning below their flat lines, but their early losses were a distant memory by the close. Notably, the discretionary sector advanced with homebuilders and retailers overshadowing losses in travel booking names like Expedia (EXPE 122.53, -2.67) and Priceline (PCLN 1266.87, -30.88). The pair lost 2.1% and 2.4%, respectively, following weekend terrorist attacks in Paris.
Staying in the discretionary sector, Urban Outfitters (URBN 22.67, -1.82) lost 7.4% ahead of its quarterly report with today's decline following eyebrow-raising news that the company acquired The Vetri Family group of restaurants. In other M&A news of note, Starwood Hotels (HOT 72.27, -2.72) agreed to be acquired by Marriott (MAR 73.72, +0.98) for $72.08/share.
Treasuries held gains during overnight action, but they returned to unchanged by the close with the 10-yr yield ending at 2.27%.
Investor participation was essentially in line with average as more than 830 million shares changed hands at the NYSE floor.
Today's economic data was limited to the Empire Manufacturing Survey for November, which registered a reading of -10.7. That was above the prior month's reading of -11.4, but below the consensus estimate, which was pegged at -6.0.
Tomorrow, October CPI (consensus 0.2%) will be reported at 8:30 ET, October Industrial Production (expected 0.1%) will be announced at 9:15 ET, and the November NAHB Housing Market Index (consensus 64.5) will be released at 10:00 ET.
- Nasdaq Composite +5.3% YTD
- S&P 500 -0.3% YTD
- Dow Jones Industrial Average -1.9% YTD
- Russell 2000 -3.8% YTD