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Re: ReturntoSender post# 6854

Tuesday, 12/05/2017 5:46:28 PM

Tuesday, December 05, 2017 5:46:28 PM

Post# of 12809

Broad Weakness Overpowers Tech Outperformance
05-Dec-17 16:20 ET
Dow -109.41 at 24180.64, Nasdaq -13.15 at 6762.20, S&P -9.87 at 2629.57

https://www.briefing.com/investor/markets/stock-market-update/2017/12/5/broad-weakness-overpowers-tech-outperformance.htm

[BRIEFING.COM] The S&P 500 (-0.4%) slipped for the third session in a row on Tuesday, with 10 of its 11 sectors finishing in the red.

For a while, it appeared that a bounce-back performance from the top-weighted technology sector, which dropped 1.9% on Monday, might be enough to overpower losses from most other groups. However, the sector weakened as the day wore on, finishing with a modest gain of just 0.2%.

At their best marks of the day, the tech sector held a gain of 1.4%, and the tech-heavy Nasdaq Composite--which ended lower by 0.2%--held a gain of 0.9%.

Meanwhile, the Dow Jones Industrial Average and the small-cap Russell 2000 finished lower by 0.5% and 1.0%, respectively.

As for the other ten sectors, losses ranged from 0.2% to 1.8%. The lightly-weighted telecom services group (-1.8%) finished at the bottom of the sector standings, trimming gains from a largely uninterrupted three-week rally; the group advanced 13.2% from November 14 to December 4.

The utilities sector also showed relative weakness, losing 1.2%, with Edison (EIX 70.00, -10.26) being the group's worst-performing component. The energy provider dropped 12.8% after announcing that more than 260,000 customers in Southern California had lost power due to a fast-moving wildfire in the Ventura County area.

Retailers weighed on the consumer discretionary sector (-0.8%), evidenced by the 1.0% decrease in the SPDR S&P Retail ETF (XRT 44.07, -0.45), while transports led the industrial sector lower by 0.9%; the Dow Jones Transportation Average lost 1.4%, reducing its six-session gain to 6.6%.

Also of note, the heavily-weighted financial sector lost 0.6% amid yet another curve-flattening trade in the bond market.

U.S. Treasuries finished Tuesday's session mixed, cutting the 2yr-10yr spread by five basis points. The yield on the benchmark 10-yr Treasury note slipped three basis points to 2.35%, while the 2-yr yield climbed two basis points to 1.83%. Yields move inversely to prices.

Elsewhere, equities slipped in Asia and Europe, with Hong Kong's Hang Seng (-1.0%) and France's CAC (-0.3%) showing relative weakness in their respective regions.

Reviewing Tuesday's economic data, which included the ISM Services Index for November and the Trade Balance for October:

The ISM Services Index for November declined to 57.4 (Briefing.com consensus 59.3) from an unrevised reading of 60.1 in October.
The key takeaway from the report is that business activity in the non-manufacturing sector is still expanding, but at a somewhat slower rate that is still consistent with 3.0%+ real GDP growth.
The October trade balance showed a deficit of $48.7 billion (Briefing.com consensus -$47.4 billion). The September deficit was revised to $44.9 billion from $43.5 billion.
The key takeaway from the report is that trade will be accounted for as a negative input in fourth quarter GDP models considering that the real trade deficit of $65.3 billion is 5.3% higher than the third quarter average real trade deficit of $62.0 billion.

On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 ET, the ADP Employment Change Report for November (Briefing.com consensus 190K) at 8:15 ET, and the revised readings for third quarter Productivity (Briefing.com consensus +3.3%) and Unit Labor Costs (Briefing.com consensus +0.2%) at 8:30 ET.

Nasdaq Composite +25.6% YTD
Dow Jones Industrial Average +22.4% YTD
S&P 500 +17.5% YTD
Russell 2000 +11.8% YTD

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