Sector Investing

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Easy Come, Easy Go
09-Apr-18 16:30 ET
Dow +46.34 at 23979.10, Nasdaq +35.23 at 6950.34, S&P +8.69 at 2613.16

https://www.briefing.com/investor/markets/stock-market-update/2018/4/9/easy-come-easy-go.htm

[BRIEFING.COM] Stocks rallied through the first half of Monday's session, reclaiming the bulk of Friday's dive, but nearly gave back all of their gains in the afternoon. The S&P 500 finished with a gain of 0.3%, while the Nasdaq Composite and the Dow Jones Industrial Average advanced 0.5% and 0.2%, respectively. The small-cap Russell 2000 added 0.1%.

A de-escalation of trade war fears was the widely-cited catalyst behind a strong start to Monday's session after weekend interviews from several Trump administration officials gave investors the impression that the White House might be trying to dial back its fiery rhetoric against China. Treasury Secretary Steven Mnuchin, for example, reiterated a comment he made on Friday, saying that the U.S. could enter a trade war with China, but then added that he "[doesn't] expect it at all."

The defense of the S&P 500's 200-day moving average (2594) on Friday also helped fuel a bullish tone at the opening bell. Stocks climbed steadily into the afternoon -- with the S&P 500 adding as much as 1.9% -- but sentiment began to turn in the final two hours as investors looked ahead to comments from China's President Xi Jinping, who will be speaking at the Boao Forum on Tuesday.

The possibility that Mr. Xi could take a forceful stance on trade with the U.S. prompted investors to take some money off the table ahead of the close -- especially considering that the market has been responding to headlines in a knee-jerk fashion as of late. In addition, uncertainty regarding President Trump's response to a chemical weapons attack in Syria that killed dozens of people over the weekend also fueled some late selling, as did a New York Times report that the FBI raided the office of Mr. Trump's longtime personal lawyer Michael Cohen.

In the end, the sector standings were pretty evenly mixed with six groups advancing and five finishing in the red. The health care sector (+0.9%) was the top performer, helped by Dow component Merck (MRK 56.16, +2.80), which rallied 6.2% after announcing that its lung cancer treatment Keytruda helped previously untreated patients live longer in a late-stage trial. The top-weighted technology sector also outperformed (+0.8%), but finished a ways off its session high; the tech space was up 2.9% at its best mark of the day.

On the flip side, the lightly-weighted telecom services sector finished at the bottom of the sector standings with a loss of 1.2%. The consumer discretionary (-0.3%) and industrials (-0.3%) sectors were the second-worst performing groups, while no other space lost more than 0.2%.

Investors didn't receive any economic reports on Monday, but will receive several pieces of data on Tuesday; both the Producer Price Index (Briefing.com consensus +0.2%) and the core Producer Price Index (Briefing.com consensus +0.2%) for March will be released at 8:30 AM ET, followed by the release of Wholesale Inventories for February (Briefing.com consensus +1.1%) at 10:00 AM ET.

Nasdaq Composite: +0.7% YTD
Russell 2000: -1.4% YTD
S&P 500: -2.3% YTD
Dow Jones Industrial Average: -3.0% YTD