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Daylong Fade Produces Modest Losses
07-Apr-20 16:20 ET
Dow -26.13 at 22653.86, Nasdaq -25.98 at 7887.26, S&P -4.27 at 2659.41

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

[BRIEFING.COM] The major averages ended Tuesday with modest losses after surrendering their opening gains. The S&P 500 (-0.2%) slipped four points after starting the day with a 93-point gain while the Nasdaq (-0.3%) underperformed slightly.

Equities jumped out of the gate after markets across Asia and Europe had another good outing overnight. The sharply higher start was attributed to optimism about a potential plateau in coronavirus cases, but the key indices hit their best levels within the first five minutes of action, followed by a daylong slide that sent the Nasdaq and S&P 500 into negative territory.

Six out of eleven sectors ended the day with gains ranging from 0.1% (real estate) to 2.4% (materials) while the top-weighted technology sector (-1.1%) underperformed from the start.

Apple (AAPL 259.43, -3.04, -1.2%) and many other large tech components struggled in the afternoon. Chipmakers finished a bit ahead of the sector, with the PHLX Semiconductor Index surrendering 0.5%.

On the flip side, materials (+2.4%) and energy (+2.0%) outperformed throughout the day. The energy sector was able to remain in the green, even though crude oil slumped into the pit close, ending lower by 9.3% at $23.78/bbl. Exxon Mobil (XOM 41.24, +0.77, +1.9%) announced a 30% reduction to its capital spending plans for FY20.

As for materials, the group's advance was paced by gains in names like Dow (DOW 32.33, +1.79, +5.9%), Freeport-McMoRan (FCX 7.59, +0.40, +5.6%), and Eastman Chemical (EMN 52.87, +2.69, +5.4%). Martin Marietta Materials (MLM 185.42, +8.46, +4.8%) and Vulcan Materials (VMC 107.92, +4.75, +4.6%) also had a good showing, likely due to expectations that the next fiscal stimulus will include an infrastructure component.

Regarding additional stimulus, House Speaker Nancy Pelosi told Democratic lawmakers that she wants the next spending package to be at least $1 trillion. Meanwhile, Senate Majority Leader, Mitch McConnell, said that he expects the increase to the small business loan program to be approved on Thursday.

Treasuries retreated during the first half of the session but narrowed their losses as the day went on. The 10-yr yield ended higher by six basis points at 0.74%.

The U.S. Dollar Index fell 0.8% to 99.88, returning to levels from Thursday.

Reviewing today's economic data:

The NFIB Small Business Optimism Index fell to 96.4 in March from 104.5 in February
Job openings decreased to 6.882 mln in February from a revised 7.012 mln (from 6.963 mln) in January
Consumer credit expanded by $22.30 bln in February (Briefing.com consensus $14.00 bln) after increasing by a revised $12.10 bln (from $12.00 bln) in January.

Tomorrow's data will be limited to the 7:00 ET release of the weekly MBA Mortgage Index (prior 15.3%).

Nasdaq Composite -12.1% YTD
S&P 500 -17.7% YTD
Dow Jones Industrial Average -20.6% YTD
Russell 2000 -31.7% YTD

Market Snapshot
Dow 22653.86 -26.13 (-0.12%)
Nasdaq 7887.26 -25.98 (-0.33%)
SP 500 2659.41 -4.27 (-0.16%)
10-yr Note -15/32 0.736
NYSE Adv 2090 Dec 813 Vol 1.47 bln
Nasdaq Adv 1815 Dec 1410 Vol 4.03 bln

Industry Watch
Strong: Energy, Financials, Real Estate, Materials, Industrials
Weak: Consumer Staples, Health Care