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S&P 500 Registers Fourth-Consecutive Victory
30-Aug-17 16:25 ET
Dow +27.06 at 21893.73, Nasdaq +66.42 at 6368.29, S&P +11.29 at 2459.04
https://www.briefing.com/investor/markets/stock-market-update/2017/8/30/s-and-p-500-registers-fourthconsecutive-victory.htm

[BRIEFING.COM] The equity market rallied on Wednesday as investors continued to buy the dip that pulled the major U.S. indices from their all-time highs earlier this month. The S&P 500 (+0.5%) registered its fourth-consecutive victory, marking its longest winning streak in three months, and settled above its 50-day simple moving average (2,451.08). The Nasdaq (+1.1%) outperformed while the Dow (+0.1%) lagged.

Wednesday's session began in the wake of a strong batch of economic data, which included both a better than expected ADP National Employment Report (237,000 actual vs 180,000 Briefing.com consensus) and an above-consensus second estimate of second quarter GDP (3.0% actual vs 2.7% Briefing.com consensus).

Stocks opened the session relatively flat as investors took a moment to digest the hotter than expected reports--weighing the thought of economic growth against the thought that said growth might help justify a further tightening of monetary policy. The bulls eventually won out and then led a slow and steady climb into the afternoon.

Biotechnology stocks showed notable strength throughout the session, evidenced by the iShares Nasdaq Biotechnology ETF (IBB 324.32, +6.50), which settled higher by 2.1%. Incyte (INCY 138.27, +13.30) led the biotech rally, jumping 10.6%, following news that the company, and partner Eli Lilly (LLY 80.49, +1.94), will resubmit a new drug application for baricitinib by the end of January 2018.

The influential health care sector (+0.6%), which houses biotech names, finished a step ahead of the broader market, near the top of the leaderboard. The top-weighted technology sector (+0.8%) also outperformed, as did the consumer discretionary (+0.7%) and materials (+0.7%) groups.

Within the tech space, chipmakers exhibited notable strength, sending the PHLX Semiconductor Index higher by 1.7%. Analog Devices (ADI 83.72, +4.17) led the semiconductor rally after beating both top and bottom line estimates and issuing above-consensus guidance. ADI shares climbed 5.2% to a fresh three-month high.

On the flip side, select countercyclical sectors underperformed, including consumer staples (unch), utilities (-0.4%), and telecom services (-0.6%). The energy sector (unch), which is considered to be a cyclical group, also struggled as the price of crude oil dropped for the fourth session in a row.

The commodity held a modest gain in the early afternoon, but moved sharply lower following an EPA announcement approving emergency fuel waivers for Gulf and East Coast states in response to Tropical Storm Harvey. WTI crude futures finished lower by 0.6% at a price of $45.96/bbl.

In the bond market, U.S. Treasuries finished the midweek session on a flattish note with the benchmark 10-yr yield settling unchanged at 2.14%. Meanwhile, the 2-yr yield climbed one basis point to 1.33% after trading as high as 1.35% in the morning session.

Also of note, the U.S. Dollar Index (92.86, +0.59) climbed 0.6% after touching a multi-year low on Tuesday and the CBOE Volatility Index (VIX 11.20, -0.50) dropped 4.3%.

Reviewing Wednesday's economic data, which included the ADP Employment Change Report for August, the second estimate of second quarter GDP, and the weekly MBA Mortgage Applications Index:

The ADP National Employment Report showed an increase of 237,000 in August (Briefing.com consensus 180,000) while the July reading was revised higher to 201,000 from 178,000.
The second estimate of second quarter GDP pointed to an expansion of 3.0%, while the Briefing.com consensus expected a reading of 2.7%. The first estimate came in at 2.6% last month.
The key takeaway from the report is that it was driven by a pickup in both consumer and business spending, which is typically a good mix for accelerating economic growth.
The weekly MBA Mortgage Applications Index dropped 2.3% to follow last week's 0.5% decrease.

On Thursday, investors will receive a slew of economic reports, including July Personal Income (Briefing.com consensus 0.3%), Personal Spending (Briefing.com consensus 0.4%), and core PCE Prices (Briefing.com consensus 0.1%) at 8:30 ET, Initial Claims (Briefing.com consensus 236K) also at 8:30 ET, August Chicago PMI (Briefing.com consensus 58.9) at 9:45 ET, and July Pending Home Sales (Briefing.com consensus 0.5%) at 10:00 ET.

Nasdaq Composite +18.3% YTD
Dow Jones Industrial Average +10.8% YTD
S&P 500 +9.8% YTD
Russell 2000 +2.5% YTD