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Stocks rally, Nasdaq closes at new high
04-Feb-20 16:15 ET
Dow +407.82 at 28807.54, Nasdaq +194.57 at 9467.99, S&P +48.67 at 3297.59

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

[BRIEFING.COM] U.S. stocks rallied on Tuesday in a risk-on trade that lifted the Nasdaq Composite (+2.1%) to a new closing record. The S&P 500 (+1.5%), Dow Jones Industrial Average (+1.4%), and Russell 2000 (+1.5%) followed suit with gains of about 1.5%.

Cyclical sectors did most of the heavy lifting, especially the information technology sector (+2.6%), as the market glanced past a revenue miss from Alphabet (GOOG 1447.07, -38.87, -2.6%). The rate-sensitive utilities sector (-1.0%) was the lone holdout, as the selling in the Treasury market drove yields higher.

The 2-yr yield rose six basis points to 1.41%, and the 10-yr yield rose eight basis points to 1.60%. The U.S. Dollar Index advanced 0.1% to 97.94. Gold futures fell 1.7% to $1555.70/ozt.

China helped instill the bullish bias overnight when it stabilized its markets by injecting more liquidity into the system. The People's Bank of China will also reportedly issue cuts to its key lending rate and reserve requirement ratios for banks to help offset the negative economic impact resulting from the coronavirus.

Easy monetary policy usually bodes well for equities on the presumption that greater economic growth, and earnings growth, will follow. Whether that plays out or not, the bullish price action in the market likely fueled the rally amid a fear of missing out on further gains.

Tesla (TSLA 887.06, +107.06, +13.7%) was undoubtedly the stock of the day, clouding Alphabet and its earnings results. Shares were up more than 24% today in a short squeeze beyond belief that had some fearing out on more gains and others starting to believe in the story. Shares did lose steam into the close but still finished up 13.7%.

In M&A news, eBay (EBAY 37.41, +3.02, +8.8%) shares rose nearly 9% after The Wall Street Journal reported that Intercontinental Exchange (ICE 92.59, -7.45, -7.5%) offered to acquire the company in a deal that would value it at more than $30 billion.

Interestingly, WTI crude gave up a 2.9% intraday gain and fell deeper into bear market territory with a loss of 0.9%, or $0.44, to $49.61/bbl. Prices remained hampered by poor sentiment and lowered expectations for oil demand.

Tuesday's economic data was limited to the Factory Orders report for December:

Factory Orders increased 1.8% m/m in December (Briefing.com consensus +1.1%) following a downwardly revised 1.2% decrease (from -0.7%) in November.
The key takeaway from the report is that it reflects generally weak levels of business spending, evidenced by the 0.8% decline in nondefense capital goods orders excluding aircraft.

Looking ahead, investors will receive the ISM Non-Manufacturing Index for January, the ADP Employment Change report for January, the Trade Balance report for December, and the weekly MBA Mortgage Applications Index on Wednesday.

Nasdaq Composite +5.5% YTD
S&P 500 +2.1% YTD
Dow Jones Industrial Average +0.9% YTD
Russell 2000 -0.7% YTD

Market Snapshot
Dow 28807.54 +407.82 (1.44%)
Nasdaq 9467.99 +194.57 (2.10%)
SP 500 3297.59 +48.67 (1.50%)
10-yr Note -6/32 1.596
NYSE Adv 2058 Dec 822 Vol 933.6 mln
Nasdaq Adv 2230 Dec 956 Vol 2.4 bln

Industry Watch
Strong: Information Technology, Industrials, Consumer Discretionary
Weak: Utilities, Energy

Moving the Market

-- Stocks rally in risk-on trade, Nasdaq closes at new high

-- China injects more liquidity into market, reportedly plans more stimulus measures

-- Alphabet (GOOG) falls on revenue miss

WTI crude gives up gains, closes lower
04-Feb-20 15:25 ET
Dow +472.00 at 28871.72, Nasdaq +207.73 at 9481.15, S&P +55.63 at 3304.55

[BRIEFING.COM] The S&P 500 continues to trade higher by 1.7%. The benchmark index is on pace to close back above the 3300 level.

Looking at the S&P 500 sectors shows information technology (+2.6%), materials (+2.2%), and consumer discretionary (+2.1%) leading the rally. The utilities sector (-0.5%) has traded places with the communication services sector (+0.7%) as today's laggard amid the sharp increase in yields today.

WTI crude settled down $0.44 (-0.9%) to $49.61/bbl, giving up a 2.9% intraday gain. Prices remained hampered by dampened spirits or expectations for oil demand.