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Stock market closes little changed, cyclical stocks gain
26-Jun-19 16:25 ET
Dow -11.40 at 26536.82, Nasdaq +25.25 at 7909.96, S&P -3.60 at 2913.78

https://www.briefing.com/investor/markets/stock-market-update/2019/6/26/stock-market-closes-little-changed-cyclical-stocks-gain.htm

[BRIEFING.COM] The S&P 500 declined 0.1% on Wednesday in a mixed session. Cyclical sectors provided the market some support, but weakness in the defensive-oriented sectors dragged on the broader market.

The Dow Jones Industrial Average (-0.04%) finished fractionally lower, and the Russell 2000 declined 0.2%. The Nasdaq Composite increased 0.3%

The stock market's best levels of the day came shortly after the opening bell, as many headlines called attention to Treasury Secretary Steven Mnuchin's optimistic tone in a morning interview with CNBC. It should be noted, though, that Mr. Mnuchin simply reiterated that the U.S. was 90% close to a deal, which he said in April, and that there remains a path to a deal.

It wasn't too surprising to see the market react positively to old trade news in front of the highly-anticipated G-20 summit this weekend. That summit could bring potential market-moving news but given the uncertainty of the outcome, and the market re-calculating the Fed's rate decision next month, the mood in the market felt less enthusiastic.

The broader market finished little changed, but there were some big moves in the S&P 500 sectors. The defensive-oriented utilities (-2.2%), real estate (-2.0%), consumer staples (-1.4%), and health care (-1.3%) sectors declined noticeably. These sectors, except health care, may have gotten overvalued heading into end-of-the-quarter re-balancing.

The cyclical energy (+1.5%), information technology (+1.1%), consumer discretionary (+0.4%), and industrials (+0.2%) sectors were the lone sectors to finish higher on Wednesday.

Higher oil prices ($59.37/bbl, +$1.53, +2.6%) fueled broad-based buying in the energy space after the EIA released some bullish inventory data. The tech sector derived its strength from shares of Apple (AAPL 199.80, +4.23, +2.2%) and many of the semiconductor stocks, which outperformed after Micron (MU 37.04, +4.36, +13.3%) pleased investors with solid quarterly results and better-than-feared guidance. The Philadelphia Semiconductor Index advanced 3.2%.

In other earnings news, investors were able to overlook downside earnings guidance from FedEx (FDX 159.92, +3.94, +2.5%), suggesting that much of the bad news may have already been priced-in to the stock's recent underperformance. FedEx also beat earnings estimates. General Mills (GIS 51.31, -2.39, -4.5%), on the other hand, disappointed investors with a revenue miss.

U.S. Treasuries finished on a lower note, driving yields higher across the curve. The 2-yr yield increased four basis points to 1.78%, and the 10-yr yield increased six basis points to 2.05%. The U.S. Dollar Index increased 0.1% to 96.22.

Reviewing Wednesday's economic data, which included Durable Goods Orders for May, the weekly MBA Mortgage Applications Index, and the Advance reports for International Trade in Goods, Wholesale Inventories, and Retail Inventories for May:

Total durable goods orders declined 1.3% in May (Briefing.com consensus -0.3%) after declining 2.8% in April, yet orders, excluding transportation, increased 0.3% (Briefing.com consensus 0.1%) after dropping 0.1% in April.
The key takeaway from the report is that shipments of nondefense capital goods, excluding aircraft -- which factors into GDP forecasts -- increased 0.7% on the heels of a 0.4% increase in April while new orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- rose 0.4% after declining 1.0% in April.
The weekly MBA Mortgage Applications Index increased 1.3% following a 3.4% decline in the prior week.
The Advance report for International Trade in Goods for May showed a deficit of $74.5 billion following a revised deficit of $70.9 billion (from $72.1 billion). The Advance report for Wholesale Inventories for May increased 0.4%, and the Advance report for Retail Inventories for May increased 0.5%.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report, the third estimate for first quarter GDP, and Pending Home Sales for May on Thursday.

Nasdaq Composite +19.2% YTD
S&P 500 +16.2% YTD
Russell 2000 +12.6% YTD
Dow Jones Industrial Average +13.8% YTD