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Wall Street Down for Second Straight Day as Energy Stocks Fall
02-May-19 16:15 ET
Dow -122.35 at 26307.79, Nasdaq -12.87 at 8036.76, S&P -6.21 at 2917.52

https://www.briefing.com/investor/markets/stock-market-update/2019/5/2/wall-street-down-for-second-straight-day-as-energy-stocks-fall.htm

[BRIEFING.COM] The S&P 500 declined 0.2% on Thursday, although it had been down as much as 0.8% in the session. Energy stocks weighed on the broader market for the second straight day, as oil prices ($61.77/bbl, -$1.82, -2.9%) fell to a one-month low.

The Dow Jones Industrial Average lost 0.5%, and the Nasdaq Composite lost 0.2%. The Russell 2000, however, increased 0.4%.

There was a lack of buying conviction following the Fed's decision Wednesday to remain firmly on hold. With few market catalysts to support a move back to all-time highs, investors continued to embrace a profit-taking mindset that sent the S&P 500 back to the 2900 level.

Buying support at this level, coupled with a stabilization in Treasury yields, helped abate selling pressure, though. Still, an awareness that the market was overextended and due for a pullback contributed to tepid buying interest in front of Friday's release of the April employment report.

The S&P 500 energy sector (-1.7%) was the day's worst-performing group amid a drop in the price of oil. Prices were pressured by rising U.S. inventory and by reports that Asian refiners asked Saudi Arabia for additional supply amid global disruptions.

Conversely, the broader market found support from the S&P 500 health care (+0.5%), financials (+0.2%), and real estate (+0.2%) sectors. Many stocks within the Dow Jones Transportation Average (+1.2%) and the Philadelphia Semiconductor Index (+1.1%) provided additional support.

In corporate news, Dow Inc (DOW 72.50, -3.43, -6.1%), Square (SQ 67.74, -5.88, -8.0%), Kellogg (K 57.38, -2.01, -3.4%), and Cigna (CI 158.22, -3.78, -2.3%) were some of the more notable companies that fell after disappointing investors with their earnings results/guidance. Tesla (TSLA 244.10, +10.09) rose 4.3% after the company announced plans to raise $2.0 billion through new equity and convertible notes.

U.S. Treasuries continued their post-FOMC retreat, sending yields higher across the curve. The 2-yr yield and the 10-yr yield increased four basis points each to 2.34% and 2.55%, respectively. The U.S. Dollar Index increased 0.2% to 97.83.

Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report, preliminary first quarter readings for Nonfarm Productivity and Unit Labor Costs, and Factory Orders for March:

Initial claims for the week ending April 27 were unchanged from the prior week at 230,000 (Briefing.com consensus 212,000). Continuing claims for the week ending April 20 increased by 17,000 to 1.671 million.
Initial claims might have been higher than expected, yet the key takeaway is that they still remain relatively low, evidenced by a four-week moving average of 212,500 that isn't far off a 50-year low.
Nonfarm business sector productivity increased 3.6% in the first quarter (Briefing.com consensus 2.3%) following a downwardly revised 1.3% increase (from 1.9%) for the fourth quarter. The first quarter increase was the strongest pace since the third quarter of 2014. Unit labor costs decreased 0.9% in the first quarter (Briefing.com consensus +1.6%) following an upwardly revised 2.5% increase (from 2.0%) in the fourth quarter.
The key takeaway from the backward-looking report is that it fit quite well with the understanding that U.S. economic activity is solid while inflation pressures are muted.
Factory orders increased 1.9% in March (Briefing.com consensus +1.6%) on the heels of an upwardly revised 0.3% decline (from -0.5%) in February.
The key takeaway from the report is that business investment picked up in March, evidenced by the 1.4% increase in orders for nondefense capital goods excluding aircraft, which are a proxy for business spending.

Looking ahead, investors will receive the following reports on Friday: the Employment Situation Report for April; the ISM Non-Manufacturing Index for April; and the Advance figures for International Trade in Goods, Wholesale Inventories, and Retail Inventories for March.

Nasdaq Composite +21.1% YTD
Russell 2000 +17.4% YTD
S&P 500 +16.4% YTD
Dow Jones Industrial Average +12.8% YTD