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Slim Victory Ends Two-Session Slide
13-Nov-17 16:30 ET
Dow +17.49 at 23439.70, Nasdaq +6.66 at 6757.60, S&P +2.54 at 2584.84
https://www.briefing.com/investor/markets/stock-market-update/2017/11/13/slim-victory-ends-twosession-slide.htm

[BRIEFING.COM] Stocks crept toward record highs on Monday, ending a two-session losing streak. The S&P 500, the Nasdaq, and the Dow added 0.1% apiece.

With the third quarter earnings season nearly in the books, investors continued to chew on the prospect of tax reform. The House is expected to vote on its version of a tax reform bill this Thursday, but, even if the bill passes, the lower chamber still has some work to do in order to reconcile its version with the version that the Senate unveiled last week.

The two versions must match and be approved by both chambers in order to put the bill on President Trump's desk.

The S&P 500's utilities sector was the best-performing group on Monday, finishing with a gain of 1.2%, followed from a distance by the consumer staples (+0.6%), materials (+0.5%), and consumer discretionary (+0.3%) groups. In total, seven of the eleven sectors settled in positive territory, but General Electric (GE 19.02, -1.47) kept the upbeat sentiment in check.

GE shares dropped 7.2%, hitting a fresh five-year low, after the company cut its divided by half and dialed back its profit forecast for 2018. The dividend cut was expected by many and was deemed necessary by new CEO John Flannery in order to restructure the 125-year-old industrial giant. Following Monday's decline, GE shares are down 39.8% year to date.

In other corporate news, toymaker Mattel (MAT 17.64, +3.02) spiked 20.7% following weekend reports that rival Hasbro (HAS 96.83, +5.38) has made a bid to acquire the company; Hasbro shares also moved higher, adding 5.9%. The reported bid comes two weeks after a disappointing third quarter earnings report for Mattel and at a time when MAT shares are challenging their lowest level since 2009.

Meanwhile, pharmacy retailers like CVS Health (CVS 71.48, +0.49) breathed a sigh of relief after Amazon (AMZN 1129.17, +3.82) announced that it plans to use recently obtained state pharmacy licenses to sell medical devices and supplies, not prescriptions--as was previously rumored. CVS shares climbed 0.7%.

In the bond market, U.S. Treasuries kicked off the week on a mostly flat note, with the yield on the benchmark 10-yr Treasury note finishing unchanged at 2.40%. Shorter-dated issues showed relative weakness, however, leaving the 2-yr yield higher by three basis points at 1.69%.

Elsewhere, the Euro Stoxx 50 (-0.4%) moved lower for the sixth session in a row, while equities in the Asia-Pacific region ended Monday mixed with Japan's Nikkei (-1.3%) showing relative weakness. In the UK, 40 Conservative members of parliament have reportedly agreed to sign a letter of no confidence against Prime Minister Theresa May--just eight members shy of forcing a leadership vote.

Reviewing Monday's economic data, which was limited to the October Treasury Budget:

The Treasury Budget for October showed a deficit of $63.2 billion versus a deficit of $45.8 billion for October 2016.
The Treasury Budget data is not seasonally adjusted, so the October deficit cannot be compared to the $8.0 billion surplus registered in September.

On Tuesday, investors will receive just one notable economic report--the Producer Price Index for October (Briefing.com consensus +0.1%)--which will be released at 8:30 ET. The NFIB Small Business Optimism Index for October will cross the wires at 7:00 ET, but is not expected to have much impact on the financial markets.

Nasdaq Composite +25.5% YTD
Dow Jones Industrial Average +18.6% YTD
S&P 500 +15.5% YTD
Russell 2000 +8.7% YTD