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Stock Market Update

Stocks gain on reopening efforts, small-caps outperform
27-Apr-20 16:20 ET
Dow +359.51 at 24134.78, Nasdaq +95.64 at 8730.17, S&P +41.74 at 2878.48

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

[BRIEFING.COM] The S&P 500 gained 1.5% on Monday, as investors showed optimism in reopening efforts indicated by more states and countries. The Dow Jones Industrial Average (+1.5%) and Nasdaq Composite (+1.1%) also advanced more than 1.0%, while the Russell 2000 outperformed with a 4.0% gain.

At least nine U.S. states had their economies partially reopened as of Monday, according to The New York Times, while other states like New York, Texas, and Ohio announced plans to gradually reopen in the coming weeks. The prospective increase in economic activity, even without a confirmed COVID-19 treatment, had investors piling into previously-neglected cyclical sectors.

For instance, all 11 S&P 500 sectors ended the day higher, but strength was found in the S&P 500 financials (+3.6%) and materials (+2.6%) sectors, the Dow Jones Transportation Average (+2.8%), and the SPDR S&P Retail ETF (XRT 36.36, +1.82, +5.3%).

Even the energy sector (+2.1%) outperformed despite the 24% plunge in oil prices ($12.97, -4.05, -23.8%) and news of Diamond Offshore (DO), a small-cap company, filing for Chapter 11 bankruptcy protection. The bullish price action in the face of bad news suggested for investors that the sector may have already seen its bottom.

Likewise, Caterpillar (CAT 115.20, +1.16, +1.0%) overcame an analyst downgrade at Morgan Stanley, and General Motors (GM 22.45, +0.50, +2.3%) overcame a dividend suspension update.

Perhaps most noteworthy about today's action was that the market's most recognizable, and widely-held, mega-cap technology stocks did not participate in the broader advance. Instead, small-caps, as represented by the Russell 2000, welcomed renewed buying interest.

Overseas, Italy, France, Spain initiated steps to reopen their economies, but some attention should also be given to the Bank of Japan. The central bank lifted the cap on its JGB bond purchases, which some attributed to the initial gains in stocks, and said it will be increasing its purchases of corporate bonds and commercial paper.

U.S. Treasuries finally showed some weakness amid the bullish price action in equities. The 2-yr yield increased three basis points to 0.23%, and the 10-yr yield increased six basis points to 0.66%. The U.S. Dollar Index declined 0.3% to 100.07.

Investors did not receive economic data on Monday. Looking ahead to Tuesday, investors will receive the Conference Board's Consumer Confidence Index for April, the S&P Case-Shiller Home Price Index for February, and the Advance March reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories.

Nasdaq Composite -2.7% YTD
S&P 500 -10.9% YTD
Dow Jones Industrial Average -15.4% YTD
Russell 2000 -23.2% YTD

Market Snapshot
Dow 24134.78 +359.51 (1.51%)
Nasdaq 8730.17 +95.64 (1.11%)
SP 500 2878.48 +41.74 (1.47%)
10-yr Note -27/32 0.657
NYSE Adv 2303 Dec 634 Vol 969.6 mln
Nasdaq Adv 2565 Dec 697 Vol 3.6 bln

Industry Watch
Strong: Financials, Industrials
Weak: Consumer Staples

Moving the Market

-- Major indices trade higher, extend gains

-- Sharp drop in oil prices (-27%), but energy stocks trade mostly higher

-- State economies start to reopen

WTI crude plummets 24%
27-Apr-20 15:25 ET
Dow +414.40 at 24189.67, Nasdaq +109.76 at 8744.29, S&P +47.83 at 2884.57

[BRIEFING.COM] The S&P 500 is up at session highs with a 1.6% gain.

One last look at the S&P 500 sectors shows all trading higher, led by financials (+3.7%), industrials (+3.0%), and materials (+2.9%). The consumer staples (+0.5%) and communication services (+0.8%) sectors underperform.

WTI crude settled today's session sharply lower by 23.8%, or $4.06, to $12.97/bbl on no new catalyst.