From Briefing.com: 4:24 pm Closing Market Summary: Dow Posts 12th Straight Record Close on Monday (:WRAPX) :
Investors cautiously nudged the major averages higher on Monday in another afternoon rally that has become almost expected as of late. The Dow (+0.1%) closed at a fresh record high for the 12th consecutive time, while the S&P 500 (+0.1%) posted a fresh record high of its own. The Nasdaq finished with a gain of 0.3%.
Equity indices opened the morning session mildly lower following a relatively disappointing durable goods, excluding transportation, reading. However, President Trump got things rolling with some comments shortly after the opening bell.
Bulls turned their attention to aerospace & defense names like Boeing (BA 179.43, +1.99) and Lockheed Martin (LMT 269.36, +5.18) after Mr. Trump proposed a $54 billion boost to defense spending, making good on his promise from last Friday to implement one of the "greatest military buildups in American history." Additionally, the president's comments helped send shares of Caterpillar (CAT 97.44, +1.96) higher after the promise to touch on his infrastructure plan during his first address to Congress, which will take place tomorrow evening.
The industrial space (+0.3%) led the stock market back to its flat line, where it hovered until its afternoon advance.
Energy (+0.9%) finished Monday at the top of the leaderboard. The space did receive some help from crude oil, although not as much as early indications may have predicted. WTI crude finished just above its flat line, higher by 0.1% at $54.04/bbl, despite trading as high as $54.60/bbl in the overnight session.
Financials (+0.5%), health care (+0.4%), and real estate (+0.5%) also outperformed with health care receiving a boost from the biotechnology industry. The iShares Nasdaq Biotechnology ETF (IBB 298.27, +8.37) jumped 2.9% higher, closing near its five-month high.
On the flip side, telecom services finished Monday at the bottom of the leaderboard after AT&T (T 41.82, -0.54) announced that it will be lowering the price of its unlimited data plan, pointing to increased competition within the wireless space.
Consumer staples (-0.6%) fared only slightly better, suffering in light of the dissolved Kraft-Heinz (KHC 90.51, -2.54)-Unilever (UL 47.69, +0.58) merger after Warren Buffett said that KHC is not planning a hostile takeover of UL and that there is no backup deal in the works. Given that Mr. Buffett is the chairman of Berkshire Hathaway (BRK.b 170.63, +0.41), which invested in the Kraft-Heinz merger back in 2015, his comments on the situation hold some weight.
Mr. Buffett also revealed that he more than doubled his holdings in Apple (AAPL 136.93, +0.27) between January 1 and the company's earnings report on January 31. AAPL added 0.2% on the news, but it wasn't enough to keep technology (-0.1%) out of the red.
U.S. Treasuries finished the day with large losses as investors revised up their probabilities for a rate hike at the March 14-15 FOMC meeting; the fed funds futures market now shows an implied probability of 35.4% from 26.6% on Friday. The benchmark 10-yr yield closed Monday five basis points higher at 2.37%. In addition, bond traders have started looking at the possibility of another debt ceiling showdown and a possible government shutdown if there is no agreement on how to deal with the debt limit by March 15.
Today's economic data included January Durable Orders and January Pending Home Sales:
January durable goods orders rose 1.8%, which is in line with the Briefing.com consensus. The prior month's reading was revised to -0.8% (from -0.4%). Excluding transportation, durable orders declined 0.2% (Briefing.com consensus +0.5%) to follow the prior month's revised gain of 0.9% (from 0.5%).
The key takeaway from the report is that the "hard" data indicates business spending declined at the start of the year, which is contradictory of the spending optimism reported in the "soft" survey data.
Pending Home Sales for January declined 2.8% while the Briefing.com consensus expected an increase of 0.9%. Today's reading follows a revised 0.8% uptick in December (from 1.6%).
Tuesday's economic data will include the second estimate of fourth quarter GDP (Briefing.com consensus 2.1%) and January International Trade in Goods at 8:30 ET, February Chicago PMI (Briefing.com consensus 53.0%) at 9:45 ET, and February Consumer Confidence (Briefing.com consensus 111.5) at 10:00 ET.
Nasdaq Composite +8.9% YTD
S&P 500 +5.9% YTD
Dow Jones Industrial Average +5.4% YTD
Russell 2000 +3.7% YTD
The major averages ended positive today, despite morning weakness ahead of President Trump's first address to Congress, which will take place on Tuesday evening. Ultimately, the Nasdaq Composite edged out the others, adding 16.59 points (+0.28%) to 5861.90. The S&P 500 was up 2.39 points (+0.10%) to 2369.73, and the Dow Jones Industrial Average gained about 15.68 points (+0.08%) to 20837.44 as the bell rang.
Equity indices came out of the gate with modest losses, but Mr. Trump increased investors' optimism with some comments earlier this morning. The president touched on a wide-array of subjects, but the market moving material came from a preview of his first proposed budget. Most notably, President Trump proposed a $54 billion boost to defense spending.
Today's market data included the January durable goods orders reading, which rose 1.8%, and the prior month's reading was revised to -0.8% (from -0.4%). Excluding transportation, durable orders declined 0.2% to follow the prior month's revised gain of 0.9% (from 0.5%). Furthermore, Pending Home Sales for January declined 2.8%, following a revised 0.8% uptick in December (from 1.6%).
Technology (XLK 52.60, -0.03 -0.06%) was pressured for the entirety of the day, ending the session near highs, though. Component Hewlett Packard Enterprise (HPE 22.31, -0.65 -2.83%) was the worst performer today despite announcing a deal with AT&T (T 41.82, -0.54 -1.27%) to provide cloud -based data management. Additionally, shares of bellwether Apple (AAPL 136.93, +0.27 +0.20%) were strong today following Warren Buffet's morning appearance on CNBC, on which Mr. Buffet discussed the addition to his stake in the tech giant, more than doubling his position to about 115 million shares. Energy XLE +0.86% was the best performing S&P sector today, followed by -- IYZ +0.59%, XLF +0.53%, XLRE +0.50%, XLV +0.48%, XLI +0.36%, XLY +0.12%, XLB -0.25%, XLP -0.47%, XLU -0.56%.
In the S&P 500 Information Technology (887.66, -0.61 -0.07%) action was decidedly negative, but only just, as the space lost less than a point. Component NVIDIA (NVDA 104.41, +2.95 +2.91%) was strong today, after a defense at Goldman, which suggested investors buy the weakness. Other names in the space which closed lower with the sector today included INTU -1.69%, FIS -1.44%, XRX -1.33%, RHT -1.27%, MSI -1.23%, ORCL -1.09%, IBM -1.08%, APH -1.01%, PYPL -1.00%, VRSN -0.92%, FISV -0.62%, MSFT -0.60%.
Other notable news items among sector components:
On CNBC before the open, Warren Buffet discussed that he bought more Apple (AAPL) shares since his the December 31 13-F filing cut-off, and before the January 31 quarterly report. Clarified that he more than doubled his position to about 115 million shares.
Hewlett Packard Enterprise (HPE) announced it was selected by AT&T (T) to provide cloud-based subscriber data management solutions.
Comcast (CMCSA 37.53, -0.36 -0.95%) and Alphabet's (GOOG 829.28, +0.64 +0.08%) Google announced a deal that will launch the YouTube app on Xfinity X1 across the country later this year.
Square (SQ 17.93, +0.50 +2.87%) entered into a Warrant Cancellation and Payment Agreement relating to that certain warrant to purchase up to 9,456,955 shares of the Company's Class A common stock issued to Starbucks (SBUX 56.78, +0.70 +1.22%).
ServiceNow (NOW 87.75, -4.07 -4.43%) appointed former CEO of eBay (EBAY 34.28, +0.22 +0.65%) John Donahoe as President and CEO.
Samsung (SSNLF 1500.00, flat) announced it expanded its strategic partnership with Microsoft (MSFT 64.23, -0.39 -0.60%).
Santander (SAN 5.36, +0.05 +0.94%) and IBM (IBM 179.40, -1.95 -1.08%) announced a collaboration to design and develop a suite of IBM MobileFirst for iOS apps to support the banking group's digital transformation and give employees the tools to create deeper engagements with their customers.
Mastercard (MA 110.57, -0.43 -0.39%) announced a global partnership with Oracle (ORCL 42.70, -0.47 -1.09%) to streamline digital payment solutions in the retail and hospitality industries.
Ericsson (ERIC 6.44, -0.01 -0.16%) and Qualcomm Technologies, a subsidiary of Qualcomm (QCOM 56.73, +0.04 +0.07%), are working with Vodafone (VOD 25.41, -0.32 -1.24%) to test 5G interoperability and conduct an over-the-air field trial based on 5G New Radio (NR) specifications being developed in 3GPP.
Qualcomm (QCOM) through its Qualcomm Technologies subsidiary announced it is working with TomTom (TMOAY 4.15, flat) for the use of the Qualcomm Drive Data Platform for high-definition (HD) map crowdsourcing.
Ericsson (ERIC) and Batelco have partnered in a major network deal to transform the Bahrain mobile network.
Cisco (CSCO 34.26, -0.06 -0.17%) and Altice Group (ALLVF 20.85, flat) continue to strengthen their alliance to transform Altice's business operations with new network architectures to help grow revenue, lower costs and improve customer retention.
Cisco (CSCO) and Verizon (VZ 49.94, -0.66 -1.30%) collaborate on 5G network solutions.
In reaction to quarterly results:
Gogo (GOGO 10.49, +1.37 +15.02%) reported a better than expected Q4 loss per share of $0.34 on better than expected revenues of $160 million. For FY17, the company sees revenues ahead of expectations at $670-695 million.
JinkoSolar Holding (JKS 17.95, +0.80 +4.66%) reported better than expected Q4 EPS and revenues of $1.04 and $737.65 million, respectively.
Companies scheduled to report quarterly results tonight/tomorrow morning: FTR KTOS NTRI PCLN RP SBAC WDAY/EXLS I ORBC PRFT SPNS
Analyst actions:
NVMI was downgraded to Hold from Buy at Stifel,
USM and TDS were downgraded to Mkt Perform at Raymond James,
LITE was downgraded to Neutral from Buy at MKM Partners;
ESIO was initiated with a Buy at Lake Street
