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Stocks Revisit Highs From Tuesday
08-Apr-20 16:20 ET
Dow +779.71 at 23433.57, Nasdaq +203.64 at 8090.90, S&P +90.57 at 2749.98

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

[BRIEFING.COM] The stock market rallied on Wednesday, though the advance found resistance near Tuesday's opening high. The S&P 500 gained 3.4% while the Russell 2000 (+4.6%) outperformed.

Equities got off to a shaky start that had the S&P 500 trading just six points above yesterday's low during the first hour of action. However, most heavily weighted sectors showed relative strength during the initial downdraft, which allowed for a swift bounce that continued into the afternoon.

The rally took place as participants remained optimistic about the recent slowdown in new coronavirus cases, which led to speculation about parts of the U.S. economy being able to reopen soon. NIAID Director Fauci said death models are improving and that a turnaround in COVID-19 would be likely after this week.

The optimism about the future overshadowed a couple reminders about how dire the recent past has been. The World Trade Organization expects that global GDP will be down between 2.5% and 8.8% this year while the Organization for Economic Cooperation and Development noted today that its leading indicators are pointing to a sharp slowdown in all major economies except for India, where a less drastic slowdown has being observed.

All eleven sectors ended in the green with seven groups finishing ahead of the broader market. Real estate (+7.4%) and energy (+6.7%) outperformed throughout the day while utilities (+5.4%) and materials (+5.0%) ascended the leaderboard in late trade.

The top-weighted technology sector (+2.7%) kept pace with the broader market for the bulk of the session but couldn't keep up during the final stretch. However, chipmakers outperformed, sending the PHLX Semiconductor Index higher by 3.4%.

Zoom Video (ZM 117.81, +4.06, +3.6%) took part in the early rally, but surrendered the bulk of its gain after it was reported that Google banned its employees from using the software due to concerns about potential data leaks. Government officials from Germany and Taiwan have already been told not to use Zoom's video conferencing software.

Elsewhere, McDonald's (MCD 177.49, +1.90, +1.1%) rallied despite revealing that its comparable sales fell 3.4% in Q1 due to a 6.9% plunge in international sales while domestic sales ticked up 0.1%. The company reported strong performance for January and February but comparable sales in March were down 22.2%, led by a 34.7% drop in international sales. The company withdrew its outlook for the longer term and suspended its share buyback program.

Treasuries ended the day in mixed fashion, as shorter tenors climbed while longer tenors retreated, sending the 10-yr yield higher by three basis points to 0.76%.

Crude oil jumped $1.39, or 5.9%, to $25.17/bbl, reclaiming a portion of its loss from yesterday even though the latest weekly inventory report showed another massive build.

Economic data released this morning was limited to the weekly MBA Mortgage Index, which fell 17.9% to follow last week's 15.3% increase. The Purchase Index dropped 12.2% while the Refinance Index slumped 19.4%.

March PPI (Briefing.com consensus -0.4%; prior -0.6%), Core PPI (Briefing.com consensus -0.1%; prior -0.3%), weekly Initial Claims (Briefing.com consensus 5.00 mln; prior 6.65 mln), and Continuing Claims (prior 3.029 mln) will be reported at 8:30 ET while February Wholesale Inventories (Briefing.com consensus -0.4%) and the preliminary reading of the Michigan Consumer Sentiment for April (Briefing.com consensus 79.3; prior 89.1) will be released at 10:00 ET.

Nasdaq Composite -9.8% YTD
S&P 500 -14.8% YTD
Dow Jones Industrial Average -17.9% YTD
Russell 2000 -28.6% YTD

Market Snapshot
Dow 23433.57 +779.71 (3.44%)
Nasdaq 8090.90 +203.64 (2.58%)
SP 500 2749.98 +90.57 (3.41%)
10-yr Note -2/32 0.764
NYSE Adv 2592 Dec 316 Vol 1.21 bln
Nasdaq Adv 2721 Dec 539 Vol 3.44 bln

Industry Watch
Strong: Energy, Technology, Industrials, Consumer Discretionary, Real Estate
Weak: Consumer Staples, Health Care, Communication Services

Moving the Market

Stocks display early strength despite weak showing from other global equity markets

U.S. administration officials reportedly preparing plans for reopening of the economy