Sector Investing

[ReturntoSender]

S&P 500, Nasdaq Composite set new record highs
24-Jul-19 16:25 ET
Dow -79.22 at 27269.97, Nasdaq +70.10 at 8321.51, S&P +14.09 at 3019.56

https://www.briefing.com/investor/markets/stock-market-update/2019/7/24/s-and-p-500-nasdaq-composite-set-new-record-highs.htm

[BRIEFING.COM] The S&P 500 (+0.5%) and Nasdaq Composite (+0.9%) set new record highs on Wednesday, boosted by out-sized gains in the semiconductor stocks and by shares of companies that beat earnings estimates. The Russell 2000 rose 1.6%.

The Dow Jones Industrial Average, however, lost 0.3% amid noticeable losses in Boeing (BA 361.43, -11.54, -3.1%) and Caterpillar (CAT 131.91, -6.19, -4.5%) following disappointing earnings reports.

Today's advance was forged in the afternoon, as the market began to shake off several early concerns and instead rally around the host of companies that did provide good earnings news. Some of those concerns included the Department of Justice announcing a probe into the "market-leading online platforms," the weaker-than-expected eurozone flash manufacturing PMI for July, and Caterpillar lowering its full-year EPS guidance.

Notable earnings-related gainers included Visa (V 183.33, +2.43, +1.3%), UPS (UPS 114.39, +9.12, +8.7%), Texas Instruments (TXN 129.00, +8.93, +7.4%), Northrop Grumman (NOC 342.97, +18.98, +5.9%), Chipotle Mexican Grill (CMG 777.96, +38.36, +5.2%), and Snap (SNAP 17.61, +2.78, +18.8%). The market's ability to find support in these companies was encouraging for investors worried about market leadership being too concentrated among a handful of tech giants.

The S&P 500 communication services (+0.9%) and financials (+0.9%) sectors were the day's best-performing sectors. Semiconductor stocks had a field day, rallying on Texas Instruments' solid results. The Philadelphia Semiconductor Index advanced 3.1%, boosting its year-to-date gain to a staggering 40%.

Conversely, the consumer staples (-0.6%), real estate (-0.1%), and materials (-0.02%) sectors finished lower.

Separately, for most of the day, the DoJ regulatory threat weighed on shares of Facebook (FB 204.66, +2.30, +1.1%), Amazon (AMZN 2000.81, +6.32, +0.3%), Alphabet (GOOG 1137.81, -8.40, -0.7%), and Apple (AAPL 208.67, -0.17, -0.1%). The FTC also confirmed that Facebook will pay a $5 billion fine for its privacy mishaps, but the stock still rallied heading into its earnings report after the close.

Although the probe added to the uncertainty facing these companies, the positive mood in the market helped shares recoup a bulk of their early losses. In addition, the fact that interest rates remain low should remain a positive consideration for risk assets.

U.S. Treasury yields finished lower on Wednesday. The 2-yr yield declined one basis point to 1.82%, and the 10-yr yield declined two basis points to 2.05%. The U.S. Dollar Index was unchanged at 97.72. WTI crude lost 1.4% to $55.93/bbl.

Reviewing Wednesday's economic data, which included New Home Sales for June and the weekly MBA Mortgage Applications Index:

New home sales increased 7.0% m/m to a seasonally adjusted annual rate of 646,000 (Briefing.com consensus 660,000) from a downwardly revised 604,000 (from 626,000) in May. Sales for April and March were also revised lower.
The key takeaway from the report is that overall sales activity remains tepid despite the fundamental supports of low mortgage rates, low unemployment, and a tight supply of existing homes for sale.
The weekly MBA Mortgage Applications Index declined 1.9% following a 1.1% decline in the prior week.

Looking ahead, investors will receive Durable Goods Orders for June, the weekly Initial and Continuing claims report, and the Advance reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories for June on Thursday.

Nasdaq Composite +25.4% YTD
S&P 500 +20.5% YTD
Dow Jones Industrial Average +16.9% YTD
Russell 2000 +17.2% YTD