>>> US Close DOw+0.08% S&P-0.02% NAsdaq+0.38% Russell +0.16%

Closing Market Summary: S&P 500 Ekes Out Third Consecutive Advance

The stock market began the trading week on a quiet note with the major averages spending the Monday session inside narrow ranges. The S&P 500 settled just above its flat line after climbing off its opening low while the Nasdaq Composite (+0.4%) outperformed.

In some ways, the range-bound action was a bit of a surprise considering investors received China's Q3 GDP report over the weekend. The growth report proved to be a mixed bag as GDP beat estimates (+6.9%; consensus 6.8%), but dipped below the official target growth rate of 7.0% year-over-year.

Asian markets took the data in stride with China's Shanghai Composite and Hong Kong's Hang Seng both ending flat; however, the slowdown in the year-over-year growth rate weighed on commodities, sending crude oil lower by 3.0% to $45.90/bbl.

The sell-off in crude oil futures pressured the energy sector (-2.0%) while a major sector component—Halliburton (HAL 37.36, -0.45)—lost 1.2% in reaction to better than expected earnings on below-consensus revenue.

Similar to energy, the materials sector (-0.8%) ended well behind the broader market while the remaining sectors fared better. The top-weighted technology sector (+0.3%) eked out a modest gain while another influential group—financials (unch)—ended just below its flat line despite a 4.8% dive in the shares of Morgan Stanley (MS 32.32, -1.63) brought on by a disappointing earnings report.

Elsewhere among cyclical sectors, the discretionary space (+0.5%) outperformed throughout the day thanks to strength in retail names. Also in the discretionary sector, Weight Watchers (WTW 13.92, +7.13) soared 105.0% after announcing Oprah Winfrey will purchase newly-issued shares representing 10.0% of all shares outstanding.

Moving to the countercyclical side, the health care sector (+0.3%) settled among the leaders after enduring a volatile session that mirrored the price action in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 315.94, +1.62) was up more than 2.0% at the start, but surrendered that gain after presidential candidate Hillary Clinton sent a letter to the Food and Drug Administration and the Federal Trade Commission, requesting an inquiry into drug pricing. The biotech ETF returned into the green by the closing bell, ending higher by 0.5%.

Similar to stocks, Treasuries maintained narrow ranges throughout the day with the 10-yr yield ending flat at 2.03%.

Today's participation was a bit below average as just over 800 million shares changed hands at the NYSE floor.

Economic data was limited to the NAHB Housing Market Index for October, which rose to 64 from a downwardly revised 61 (from 62) while the consensus expected the reading to come in at 62. Tomorrow's economic data will be limited to September Housing Starts (consensus 1.15 million) and Building Permits (consensus 1.17 million) with both data points set to cross at 8:30 ET.

  • Nasdaq Composite +3.6% YTD
  • S&P 500 -1.2% YTD
  • Dow Jones Industrial Average -3.3% YTD
  • Russell 2000 -3.4% YTD

>>> US Gapping down:

Gapping down

In reaction to disappointing earnings/guidance: MS -4.5% (missed on top and bottom lines; said volatility in global markets led to a difficult environment), VRX -2.3% (beats by $0.04, reports revs in-line; slightly raises Q4 guidance).

Other news: GNCA -32.2% (reports top-line results from a Phase 2a clinical trial for GEN-004, neither of the endpoints achieved statistical significance), GLDD -15.6% (initiates a review of potential strategic alternatives, withdraws FY15 EBITDA guidance, announces the retirement of CEO Jonathan W. Berger), SDRL -5.8% (commented on investigation into Sevan Marine/Drilling, prior to SDRL acquisition), PBR -3.7% (announces that its average production of oil and natural gas was 2.72 mln barrels of oil equivalent per day in September vs. 2.88 mln boed produced in August), ZINC -2.8% (general weakness in mining), FCX -2.4% (general weakness in mining), SUNE -2.2% (still checking for anything specific),SHPG -1.1% (receives a Complete Response Letter from the FDA regarding the NDA for lifitegrast for the signs and symptoms of dry eye disease in adults), AGN -0.9% (presents results of its HARMONY study).

Analyst comments: UBNT 3.3% (downgraded to Underperform at JMP Securities), ORCL -1.4% (downgraded to Sector Weight at Pacific Crest), TEF -1.3% (downgraded to Underperform from Neutral at Credit Suisse), STX -1.1% (downgraded to Neutral from Positive at Susquehanna).

>>> US Gapping Up

Gapping Up:

In reaction to strong earnings/guidance: None this morning

M&A news: CCG +19.7% (to be acquired by Harrison Street Real Estate Capital for $7.03/share, or ~$1.9 bln), PMCS +13.3% (MSCC proposes to acquire PMCS for $11.50/share, or ~$2.4 bln; believes its offer constitutes a 'superior proposal' over the Skyworks (SWKS) deal), DBD +3.3% (in talks with Wincor Nixdorf regarding a potential business combination valued at roughly ~$1.8 bln).

Other news: WTW +58.9% (partners with Oprah Winfrey; Winfrey will purchase newly issued shares representing 10% of the shares outstanding, and options to acquire an additional 5% of shares), CPXX +9.6% (announces Positive Recommendation from Data And Safety Monitoring Board for Phase 3 Study Of CPX-351), ZFGN +9.1% (continued volatility), PLX +7.8% (reports positive long term data on PRX-102 for fabry disease; meaningful clinical benefit demonstrated across all key disease parameters reversal in eGFR), OCN +7.5% (to voluntarily pay down $50 mln of its Senior Secured Term Loan Facility, will have ~$476.6 mln outstanding afterwards), PLUG +5.6% (announces that its average production of oil and natural gas was 2.72 mln barrels of oil equivalent per day in September vs. 2.88 mln boed produced in August), TSYS +2.6% (receives delivery order with a $91 mln ceiling contract value from U.S. Army for SNAP deployable satellite systems sustainment), DB +2.5% (reshuffles organizational structure, various upper management roles), NAT +2.5% (favorable commentary on Friday's Mad Money), TKC +1.7% (still checking), ARRS +1.1% (provides update on pending merger with Pace, warns the closing may not occur until late December or 1Q16).

Analyst comments: DRI +0.6% (upgraded to Buy at Maxim Group; tgt $80).

(MS) Morgan Stanley analyst: Recommend long Euro at 1.1350 to target 1.2000 (sto

Morgan Stanley analyst: Recommend long Euro at 1.1350 to target 1.2000 (stop placed at 1.1250) 
- Remain USD bearish
- Draghi may use the this week press statement to keep the door open for further ECB action, but he might have to bring deposit rate cuts back into play to weaken the EUR significantly.
- The ECB extending its QE operation or increasing the amount of its monthly purchases or changing the composition of its security purchases has been mostly priced in by markets