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Health Care Paces Midweek Bounce
04-Mar-20 16:20 ET
Dow +1173.45 at 27090.86, Nasdaq +334.00 at 9018.09, S&P +126.75 at 3130.12

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

[BRIEFING.COM] The stock market rallied on Wednesday with the Dow (+4.5%), Nasdaq (+3.9%), and S&P 500 (+4.2%) erasing their losses from Tuesday.

Equities benefited from a general improvement in sentiment, which was reflected by a mixed stock session in Asia and gains in European markets. That provided significant encouragement for U.S. equities even though there was no improvement on the coronavirus front. On the contrary, Italy's Prime Minister, Giuseppe Conte, warned that Italy's health care system, which is among the best in the world, is on the verge of being overwhelmed while sporting events will be conducted without fans through April 3.

Once again, the Treasury market did not share the optimism of the stock market, though midday action saw Treasuries back down from their highs as equities rallied to best levels of the day. The long bond recorded a slight loss, lifting its yield by a basis point to 1.64%, while the 10-yr note and shorter tenors finished in the green. The 10-yr yield slipped another two basis points to 0.99% while the 2-yr yield fell nine basis points to 0.63%.

All eleven sectors finished with gains of 2.0% or more while six groups added more than 4.0%. While the rally produced big gains, there was a defensive quality to it. The health care sector (+5.8%) held the lead throughout the day thanks to big gains in insurer stocks after Joe Biden won the bulk of yesterday's primaries, seizing the delegate count lead from Bernie Sanders, who favors nationalizing the health insurance industry.

Health care was followed by higher yielding groups like utilities (+5.7%) and consumer staples (+4.9%) while the top-weighted technology sector (+4.3%) finished just ahead of the broader market. Chipmakers had a particularly strong showing, as the PHLX Semiconductor Index jumped 4.9% with all 30 components ending in the green.

Stocks extended their rally in the afternoon, which helped battered airline shares climb out of the red after American Airlines (AAL 18.52, +0.67, +3.8%), JetBlue Airways (JBLU 15.54, +0.53, +3.5%), and United Airlines (UAL 59.47, +1.18, +2.0%) hit fresh multi-year lows. Falling demand for travel prompted United Airlines to reduce its domestic routes for April by 10% while international service will be reduced by 20%.

The energy sector (+2.2%) was the weakest performer as crude oil slid $0.46, or 1.0%, to $46.77/bbl.

Congress is expected to approve $7.80 bln in emergency spending on efforts to counter the outbreak of the coronavirus.

Reviewing today's economic data:

The ISM Non-Manufacturing Index for February registered a 57.3% reading (Briefing.com consensus 54.8%) versus 55.5% in January. The February reading is the highest reading for the index since February 2019
The key takeaway from the report is that the February number is encouraging in its own right, but with the coronavirus caseload rising in the U.S. and the public's attention to containing it increasing, doubts are festering that the strength can be sustained
The ADP Employment Change report pointed to the addition of 183,000 nonfarm payrolls in February (Briefing.com consensus 165,000) while the January reading was revised down to 209,000 from 291,000
The weekly MBA Mortgage Index spiked 15.1% to follow last week's 1.5% increase. The Refinance Index spiked 26.0% while the Purchase Index fell 2.7%
The Federal Reserve's March Beige Book noted that activity expanded at a modest to moderate pace during the survey period, though St. Louis and Kansas City reported no growth. Consumer spending increased, but in uneven fashion. There was no significant growth in tourism with early indications of reduced activity due to the coronavirus

Weekly Initial Claims (Briefing.com consensus 215,000; prior 219,000), Continuing Claims (prior 1.724 mln), revised Q4 Productivity (Briefing.com consensus 1.3%; prior 1.4%), and revised Q4 Unit Labor Costs (Briefing.com consensus 1.4%; prior 1.4%) will be reported at 8:30 ET tomorrow, followed by January Factor Orders (Briefing.com consensus -0.1%; prior 1.8%) at 10:00 ET.

Nasdaq Composite +0.5% YTD
S&P 500 -3.1% YTD
Dow Jones Industrial Average -5.1% YTD
Russell 2000 -8.2% YTD

Market Snapshot
Dow 27090.86 +1173.45 (4.53%)
Nasdaq 9018.09 +334.00 (3.85%)
SP 500 3130.12 +126.75 (4.22%)
10-yr Note -2/32 0.992
NYSE Adv 2411 Dec 416 Vol 1.23 bln
Nasdaq Adv 2500 Dec 718 Vol 3.55 bln

Industry Watch
Strong: Health Care, Utilities, Real Estate, Consumer Staples, Technology
Weak: Financials, Energy

Moving the Market

Health insurers boosted after Joe Biden wins most of last night's Democratic primaries

Treasuries remain bid despite gains in stocks

Near Highs Into Home Stretch
04-Mar-20 15:25 ET
Dow +948.78 at 26866.19, Nasdaq +258.94 at 8943.03, S&P +100.73 at 3104.10

[BRIEFING.COM] The S&P 500 (+3.4%) just below its best level of the day with 30 minutes to go. Thanks to today's advance, the benchmark index is set to reclaim its entire loss from yesterday.

The health care sector (+4.9%) jumped out to a lead at the start, and it has remained in that spot throughout the day. The energy sector (+1.2%) is the weakest performer of the day after crude oil surrendered $0.46, or 1.0%, to $46.77/bbl.