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Stocks rebound to start the week
03-Feb-20 16:10 ET
Dow +143.78 at 28399.72, Nasdaq +122.47 at 9273.42, S&P +23.40 at 3248.92

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 advanced 0.7% on Monday, as investors presumably viewed last week's drop as a good opportunity to buy the dip. The Nasdaq Composite (+1.3%) and Russell 2000 (+1.1%) outperformed, while the Dow Jones Industrial Average (+0.5%) trailed its peers.

Eight of the 11 S&P 500 sectors posted gains, including the materials (+2.1%), information technology (+1.3%), and communication services (+1.3%) sectors. The latter was aided by shares of Alphabet (GOOG 1485.94, +51.71), which rose 3.6% in front of the company's earnings report after the close.

The energy sector (-1.3%) remained hampered by falling oil prices ($50.05, -1.53, -3.0%) amid pestering concerns that the coronavirus outbreak will undercut demand for oil. Prices barely reacted to reports that Saudi Arabia will try to convince OPEC+ to agree to large production cuts.

Good news included the ISM Manufacturing Index returning into expansion mode in January, although market reaction was muted. The index checked in at 50.9% (Briefing.com consensus 48.1%) after five straight months of below-50% readings. In addition, news that Gilead Sciences (GILD 66.36, +3.16, +5.0%) will be testing a treatment for the coronavirus was encouraging to hear.

Despite the positive bias in the market, coronavirus concerns didn't just go away. Negative news related to the outbreak included more cases being reported in other countries, including the U.S.; China's Shanghai Composite dropping 7.7% in its first trading session since Jan. 23; and Apple (AAPL 308.66, -0.85, -0.3%) closing its China stores through Feb. 9.

Separately, today's session included some bullish analyst recommendations. Nike (NKE 99.27, +2.97, +3.1%) was upgraded to Buy from Neutral at UBS and added to JPMorgan's Analyst Focus List. Tesla (TSLA 780.00, +129.43, +19.9%) had its price target raised to $808 from $556 at Argus. Uber (UBER 37.59, +1.30, +3.6%) was added to Wedbush's Best Ideas List.

U.S. Treasuries started the day on a lower note but spent a bulk of intraday action rebounding from session lows. The 2-yr yield increased three basis points to 1.35%, and the 10-yr yield was unchanged at 1.52%. The U.S. Dollar Index rose 0.5% to 97.84.

Reviewing Monday's economic data, which included the ISM Manufacturing Index for January and the Construction Spending report for December:

The ISM Manufacturing Index for January jumped to 50.9% (Briefing.com consensus 48.1%) from an upwardly revised 47.8% (from 47.2%) in December. January marked the first reading above 50% in six months.
The key takeaway from the report is that the manufacturing sector went back into an expansion mode in January, aided by a jump in new orders, production, and new export orders.
Total construction spending decreased 0.2% m/m in December (Briefing.com consensus +0.5%) on the heels of an upwardly revised 0.7% increase (from +0.6%) in November. Residential spending was up 1.4% m/m and nonresidential spending was down 1.2% m/m.
The key takeaway from the report is that there was continued strength in new single-family construction (+2.7%), which was the main driver of the pickup in residential spending.

Looking ahead, investors will receive Factory Orders for December on Tuesday.

Nasdaq Composite +3.4% YTD
S&P 500 +0.6% YTD
Dow Jones Industrial Average -0.5% YTD
Russell 2000 -2.2% YTD

Market Snapshot
Dow 28399.72 +143.78 (0.51%)
Nasdaq 9273.42 +122.47 (1.34%)
SP 500 3248.92 +23.40 (0.73%)
10-yr Note -2/32 1.526
NYSE Adv 1877 Dec 996 Vol 793.8 mln
Nasdaq Adv 2070 Dec 1116 Vol 2.4 bln

Industry Watch
Strong: Materials, Information Technology, Communication Services
Weak: Energy, Industrials, Consumer Staples

Moving the Market

-- Stocks rebound in buy-the-dip trade

-- ISM Manufacturing Index for January returns to expansionary territory

-- Continued weakness in the energy stocks and oil prices

WTI crude loses 3% in continued downtrend
03-Feb-20 15:25 ET
Dow +207.22 at 28463.16, Nasdaq +128.46 at 9279.41, S&P +28.67 at 3254.19

[BRIEFING.COM] The S&P 500 is up 0.9%, and the Russell 2000 is up 0.9%.

One last look inside the benchmark index shows the materials sector (+2.4%) comfortably in the lead, followed by the information technology (+1.3%), communication services (+1.1%), and consumer discretionary (+1.1%) sectors. The energy sector (-1.3%) is down more than 1.0%, coinciding with another sharp decline in oil.

WTI crude dropped $1.53 (-3.0%) to $50.05/bbl amid growing expectations that oil demand will be weaker due to the coronavirus outbreak. Prices received little support from news that Saudi Arabia plans to pitch to OPEC+ to agree to large production cuts.