From Briefing.com: 4:29 pm Closing Market Summary: S&P 500 Slips Below 50-Day Simple Moving Average (:WRAPX) :
Stocks moved into negative territory for the week on Thursday as the S&P 500 (-0.9%) tumbled below its 50-day simple moving average (2,414) for the first time in seven weeks. The Nasdaq (-1.0%) and the Dow (-0.7%) also registered sizable declines, but none as great as the small-cap Russell 2000, which settled lower by 1.4%.
The major averages were bearish from the jump on Thursday, quickly turning their opening losses into sizable declines within the first few minutes of action. The S&P 500 found some support at its 50-day simple moving average (2,414) in the morning, bouncing off the key technical level to climb back to its opening mark. However, the bears reclaimed control in the afternoon, sending the benchmark index, and its peers, to a fresh session low.
There wasn't a specific catalyst to credit for the equity market's poor performance, but the market did express concerns about less accommodative central bankers, evidenced by rising interest rates around the globe. U.S. Treasuries moved lower in a curve-steepening trade that left the 10-yr yield five basis points higher at 2.37% and the 2-yr yield unchanged at 1.40%.
The heavily-weighted financial sector (-0.7%) benefited from the steepening of the yield curve and exhibited relative strength throughout the session. However, late-afternoon selling did trim the financial sector's advantage over the broader market a bit, leaving the group at its worst mark of the day. The consumer staples (-0.5%), materials (-0.4%), and utilities (-0.1%) sectors also outperformed.
Out of the remaining seven sectors, the lightly-weighted telecom services (-2.3%), real estate (-1.9%), and energy (-1.8%) groups finished with the widest declines. The energy sector struggled for the majority of the session despite an upbeat EIA crude inventory report, which showed that oil inventories declined by 6.3 million barrels last week (consensus -2.0 million).
Crude oil immediately shot to a new session high following the EIA release, trading as high as +3.0%, but eventually retraced a good portion of that gain to settle at a price of $45.52/bbl (+0.9%).
The influential technology (-0.9%) and health care (-1.3%) sectors struggled early on, but the tech group was able to move back in line with the broader market, thanks in large part to the positive performance of chipmakers; the PHLX Semiconductor Index settled with a modest loss of 0.5%.
Meanwhile, the health care group was never able to recover. All health care components finished in the red, but biotechnology companies showed particular weakness, sending the iShares Nasdaq Biotechnology ETF (IBB 310.45, -4.84) lower by 1.5%.
It's also worth pointing out that retailers struggled today, dragging the SPDR S&P Retail ETF (XRT 39.46, -0.87) lower by 2.2%. L Brands (LB 46.49, -7.62) led the retreat, plunging 14.1%, after reporting a 9.0% decline in June comparable sales vs +6.0% a year ago and -7.0% last month.
Reviewing today's large batch of economic data, which included June ADP Employment Change, the weekly Initial Claims Report, June ISM Services, May Trade Balance, the weekly MBA Mortgage Applications Index, and June Challenger Job Cuts:
The ADP National Employment Report showed an increase of 158,000 in June (Briefing.com consensus 185,000) while the May reading was revised lower to 230,000 from 253,000.
The ADP reading precedes Friday's more influential Employment Situation Report for June, which the Briefing.com consensus expects will show the addition of 173,000 nonfarm payrolls.
The latest weekly initial jobless claims count totaled 248,000 while the Briefing.com consensus expected a reading of 244,000. Today's tally was above the unrevised prior week count of 244,000. As for continuing claims, they rose to 1.956 million from the revised count of 1.945 million (from 1.948 million).
The key takeaway from the report is that jobless claims continue to remain at low levels that are consistent with a tight labor market.
The ISM Services Index for June rose to 57.4 from an unrevised reading of 56.9 in May. The Briefing.com consensus expected a reading of 56.6.
The key takeaway from the report is that the services side of the economy continues to perform well, evidenced by every index component registering a reading above 50.0 in June.
The May trade balance showed a deficit of $46.5 billion while the Briefing.com consensus expected the deficit to hit $46.1 billion. The previous month's deficit was left unrevised at $47.6 billion.
The key takeaway from the report is that the average real trade balance for the second quarter is higher than the average for the first quarter, which implies net exports will have a negative contribution on Q2 GDP growth.
The weekly MBA Mortgage Applications Index rose 1.4% to follow last week's 6.2% decrease.
June Challenger Job Cuts showed a year-over-year decrease of 19.3% to follow last month's year-over-year increase of 9.7%.
On Friday, investors will receive the Employment Situation Report for June, which the Briefing.com consensus expects will show the addition of 173,000 nonfarm payrolls. The report will be released at 8:30 ET.
Nasdaq Composite +13.1% YTD
S&P 500 +7.6% YTD
Dow Jones Industrial Average +7.9% YTD
Russell 2000 +3.2% YTD
Tech Stocks from Briefing.com
TThe broader market turned in a tough Thursday as the Nasdaq Composite fell a clean 1% (6089.46, -61.39). The S&P 500 was barely better, losing 22.79 points (-0.94%) to 2409.75. The Dow Jones Industrial Average shed 158.13 points (-0.74%) to 21320.04.
Thursday housed a plethora or market data points, including the ADP National Employment Report which showed an increase of 158,000 in June while the May reading was revised lower to 230,000 from 253,000. The latest weekly initial jobless claims count totaled 248,000 while last week's reading was unrevised at 244,000. As for continuing claims, they rose to 1.956 million from the revised count of 1.945 million (from 1.948 million). The ISM Services Index for June rose to 57.4 from an unrevised reading of 56.9 in May. The May trade balance showed a deficit of $46.5 billion compared to the previous month's deficit which was left unrevised at $47.6 billion. The weekly MBA Mortgage Applications Index rose 1.4% to follow last week's 6.2% decrease. Lastly, June Challenger Job Cuts showed a year-over-year decrease of 19.3% to follow last month's year-over-year increase of 9.7%.
The Technology (XLK 54.38, -0.50 -0.91%) space wasn't the worst performing S&P sector today but it certainly wasn't the best. Component Amphenol (APH 72.48, -1.29 -1.75%) was weak today following a premarket downgrade of the stock to a Neutral rating at Goldman. All 11 S&P sectors finished in the red; aside from tech, the remaining sectors finished Thursday XLRE -1.81%, IYZ -1.43%, XLV -1.26%, XLE -1.13%, XLY -1.01%, XLI -0.82%, XLF -0.76%, XLP -0.57%, XLB -0.43%, XLU -0.06%.
In the S&P 500 Information Technology (933.87, -8.10 -0.86%) space, trading fell at the open and never looked back, ultimately finishing just above lows. Bellwethers like AAPL -0.94%, MSFT -0.74%, FB -1.01%, GOOG -0.55%, GOOGL -0.49%, V -0.81%, ORCL -1.23%, INTC -2.07%, CSCO -1.24% all finished lower today.
Other notable news items among sector components:
Symantec (SYMC 27.72, -0.07 -0.25%) to acquire Israel-based Fireglass; terms not disclosed.
Kulicke & Soffa (KLIC 19.06, -0.14 -0.73%) acquired Liteq BV; terms not disclosed.
First Data (FDC 17.93, -0.47 -2.55%) completed its acquisition of CardConnect (CCN 15.05).
CNBC's David Faber said, citing sources, that Time Warner's (TWX 101.53, +0.36 +0.36%) deal with
AT&T (T 37.18, -0.45 -1.20%) is likely to close as soon as within the next 60 days despite ongoing speculation the deal could be delayed.
Cisco Systems (CSCO 30.72, -0.39 -1.24%) responded to latest development in ITC case vs. Arista Networks (ANET 145.43, -3.19 -2.15%).
Brooks Automation (BRKS 22.35, -0.02 -0.09%) acquired Pacific Bio-Material Management for $33 million in cash.
Cypress Semi (CY 13.37, -0.22 -1.62%) reached cooperation and settlement agreement with former CEO (largest individual stockholder) T.J. Rodgers.
Tesla's Model (TSLA 308.89, -18.20 -5.56%) S was among select vehicles that did not receive any safety awards from Insurance Institute for Highway Safety.
Analyst actions:
MSCC was upgraded to Buy from Neutral at Goldman;
APH was downgraded to Neutral from Buy at Goldman;
AABA was initiated with an Outperform at Oppenheimer,
SWKS was initiated with a Buy at Argus,
LOGI was initiated with a Buy at Citigroup,
MKSI was initiated with a Buy at Deutsche Bank,
ENTG was initiated with a Hold at Deutsche Bank,
ELVT was initiated with a Buy at BTIG Research
