From Briefing.com: 4:30 pm Closing Market Summary: Financials Lead Stock Market Higher on Monday (:WRAPX) :
The financial sector (+1.6%), and the broader market, opened the week with a nice bounce-back performance as participants returned in a buying frame of mind following the extended Easter weekend. The S&P 500 (+0.9%) finished in-line with the Dow (+0.9%) and the Nasdaq (+0.9%) and closed at its high for the session.
While geopolitical uncertainty continues to loom, especially with the French presidential election on the horizon, investors were encouraged by the relatively quiet weekend, which saw no major disruptions on the geopolitical front. The positive sentiment led to gains at the start of Monday's session, but the financial sector's solid performance was what really solidified the day's bullish tone.
Participants had an eye on bank stocks after JPMorgan Chase (JPM 85.86, +1.46) and Citigroup (C 58.99, +0.95) sold off last Thursday despite reporting better than expected earnings and revenues. That selling occurred incidentally amid a good bit of geopolitical headline angst in front of the weekend. JPM and C got back in gear today, though, and reclaimed all of Thursday's losses, which sent a bullish signal to the broader market ahead of earnings reports from Bank of America (BAC 22.81, +0.47) and Goldman Sachs (GS 226.26, +2.94) before Tuesday's open.
The financial space was also aided by the activity in the Treasury market, which produced a modest steepening of the yield curve that is beneficial for banks' net interest margins. The 10-yr yield (2.25%) added two basis points while the 2-yr yield (1.19%) decreased by one basis point. Paired with the decrease in the CBOE Volatility Index (14.65, -1.31, -8.2%), the slip in the 10-yr Treasury note offered further evidence of the risk-on sentiment that prevailed in the cash market on Monday.
Most of the financial sector's cyclical peers outperformed the broader market, including the technology (+1.0%), industrials (+1.0%), consumer discretionary (+1.0%), and real estate (+1.2%) sectors. Chipmakers had a hand in the tech group's solid showing. The PHLX Semiconductor Index finished higher by 1.3%.
Crude oil prices dropped 1.1% to finish the day at $52.63/bbl and contributed to the energy sector's (+0.2%) underperformance. The commodity's slip was attributed to profit-taking efforts in light of its recent three-week rally.
On the countercyclical side, the health care sector (+0.3%) struggled to keep pace as Eli Lilly (LLY 82.38, -3.50) and Incyte (INCY 126.07, -14.77) weighed on the space. The two companies slipped 4.1% and 10.5%, respectively, in reaction to the FDA's decision on Friday to deny the companies' rheumatoid arthritis drug Baricitinib. The iShares Nasdaq Biotechnology ETF (IBB 290.58, -0.01) settled at its flat line.
European markets were closed for Easter Monday, but that didn't stop the euro (1.0641) and the pound (1.2565) from adding 0.3% apiece against the U.S. dollar. As a result, the U.S. Dollar Index (100.23, -0.26) finished Monday's session lower by 0.3%.
On the data front, investors received several economic reports, including April Empire State Manufacturing Survey, April NAHB Housing Market Index, and April Net Long-Term TIC Flows:
The Empire Manufacturing Survey for April declined to 5.2 from the prior month's reading of 16.4. The Briefing.com consensus estimate was pegged at 13.0.
The NAHB Housing Market Index for April declined to 68 (Briefing.com consensus 70) from an unrevised reading of 71 in March.
Net Long-Term TIC Flows for April were $53.4 billion versus a revised $5.9 billion (from $6.3 billion) for March.
On Tuesday, investors will receive the March Housing Starts (Briefing.com consensus 1.256 million) and March Industrial Production (Briefing.com consensus 0.4%) reports. The two reports will cross the wires at 8:30 ET and 9:15 ET, respectively.
Nasdaq Composite +8.8% YTD
S&P 500 +4.9% YTD
Dow Jones Industrial Average +4.4% YTD
Russell 2000 +0.3% YTD
The major averages were strong on Monday, all finishing near highs after a dismal finish to the abbreviated week last week, and the extended Easter holiday. Leading the charge was the Dow Jones Industrial Average which gained 183.67 points (+0.90%) to 20636.92. The Nasdaq Composite was up 51.64 points (+0.89%) to 5856.79, while the S&P 500 added 20.06 points (+0.86%) to 2349.01.
On the data front, the Empire Manufacturing Survey for April declined to 5.2 from the prior month's reading of 16.4, while the NAHB Housing Market Index for April declined to 68 from an unrevised reading of 71 in March.
All 11 S&P sectors finished with gains today, with the Technology (XLK 52.85, +0.48 +0.92%) space finishing about middle of the pack on a strong positive Monday bias. Component NVIDIA (NVDA 99.23, +3.74 +3.92%) was the best performer today on no particular news. The rest of the S&P finished with Financials at the head XLF +1.75% followed by IYZ +1.17%, XLRE +1.15%, XLI +1.09%, XLY +1.03%, XLB +0.72%, XLP +0.71%, XLU +0.45%, XLV +0.36%, XLE +0.22%.
In the S&P 500 Information Technology (897.33, +8.65 +0.97%) space, trading posted some decent gains but still finished below the 900 level. Component Alphabet (GOOG 837.17, +13.61 +1.65%) was one of the better performing names today after it was announced that the company signed a commercial agreement with Yandex (YNDX 24.27, +1.52 +6.68%) and settlement agreement with the Federal Antimonopoly Service of Russia. Other names in the space which finished higher today included CSRA +3.03%, TDC +1.97%, LRCX +1.73%, ADS +1.53%, MU +1.46%, FB +1.46%, GPN +1.34%, AMAT +1.33%, SWKS +1.32%, VRSN +1.32%.
Other notable news items among sector components:
Nintendo (NTDOY 30.46, +1.47 +5.07%) said its Switch console is the 'fastest-selling video game system in Nintendo history'; sold more than 906K US units in March according to the NPD Group.
Hewlett Packard Enterprise (HPE 18.10, +0.11 +0.61%) completed its tender offer for Nimble Storage (NMBL).
Straight Path Comms (STRP 112.49, +20.79 +22.67%) disclosed in regulatory filing the receipt of a letter from a third party stating that it is evaluating a topping bid it believes would be more favorable to STRP's shareholders than the current transaction with AT&T (T 40.30, +0.02 +0.05%). Reuters reported that said third party is Verizon (VZ 48.81, +0.19 +0.39%).
Frontier Communications (FTR 1.97, +0.03 +1.55%) renewed its distribution agreement with EPIX.
Yandex N.V. (YNDX) confirmed the Federal Antimonopoly Service of Russia approved the settlement of the two-year old Android antitrust case in Russia.
Toshiba (TOSBF 1.89, -0.02 -1.46%) shares were volatile after NHK reported that Apple (AAPL 141.80, +0.75 +0.53%) is weighing a bid for the company's chip unit.
Apple (AAPL) has secured a permit for self-driving car technology in CA.
Square's (SQ 17.08, +0.16 +0.95%) Jack Dorsey tweeted image of SQ debit card.
Moneygram (MGI 17.79, +1.28 +7.75%) to be acquired by Alibaba Group'S (BABA 111.76, +1.55 +1.41%) Ant Financial for $18.00 per share. In response, bidder Euronet Worldwide (EEFT 84.73, +0.15 +0.18%) acknowledged it submitted a binding offer to acquire to MGI on April 14; EEFT is 'disappointed' that MoneyGram chose not to pursue a combination of the companies.
Norsat (NSAT 10.85, +0.75 +7.43%) shareholder, Privet Fund Management, affirmed its 17.6% active stake, sent a letter to the board indicating its interest in acquiring 100% of the Common Stock not already owned for $11.00 per share in cash.
MOCON Inc. (MOCO 29.70, +8.05 +37.18%) to be acquired by AMETEK (AME 53.97, +0.77 +1.45%) at $30.00/share in cash in a transaction valued at about $182 million.
Analyst actions:
PANW was downgraded to Sector Perform from Outperform at FBN,
ABIL was downgraded to Mkt Perform from Outperform at FBR,
KLAC was downgraded to Negative from Neutral at Susquehanna;
CSIQ was initiated with a Buy at Axiom Capital,
IDTI was initiated with a Neutral at Goldman,
EVBG was initiated with a Buy at Needham,
HIMX was initiated with an Outperform at Macquarie
