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Stock Market Update

Large-cap indices lose reopening momentum
28-Apr-20 16:20 ET
Dow -32.23 at 24101.55, Nasdaq -122.43 at 8607.74, S&P -15.09 at 2863.39

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

[BRIEFING.COM] The S&P 500 declined 0.5% on Tuesday in a mixed session. Large-cap technology and health care stocks lagged, while reopening enthusiasm continued to flow into the small-cap Russell 2000 (+1.3%) and S&P MidCap 400 (+1.0%). The Dow Jones Industrial Average shed 0.1%, while the Nasdaq Composite fell 1.4%.

The day started with broad gains that lifted the S&P 500 as much as 1.5% shortly after the open, as part of the reopening momentum from Monday. That broad momentum quickly dissipated, presumably due to valuation concerns, but lingered in areas of the market that had underperformed when the shutdown angst was rampant.

Some of those included the small-cap and mid-cap stocks, as previously noted, but also the cyclical S&P 500 energy (+2.2%), materials (+2.0%), industrials (+1.8%), and financials (+0.9%) sectors.

Conversely, the large-cap stocks that were deemed as relatively safe, and thus outperformed over the past few months, lost some of their appeal today and heavily dragged on the broader market. Those were found in the health care (-2.1%), communication services (-1.9%), and information technology (-1.4%) sectors.

The health care space also had some negative catalysts despite the reported progress on the coronavirus front. For instance, Johnson & Johnson (JNJ 151.39, -2.90, -1.9%) was downgraded to Neutral from Buy at UBS, while Pfizer (PFE 37.91, -0.42, -1.1%) and Merck (MRK 81.18, -2.80, -3.3%) declined after reporting earnings.

In other earnings news, shares of Caterpillar (CAT 115.46, +0.26, +0.2%), 3M (MMM 157.61, +3.96, +2.6%), and PepsiCo (PEP 136.32, +1.4%) finished higher, even after the companies withdrew full-year guidance, while shares of UPS (UPS 96.43, -6.12, -6.0%) faltered after the company missed profit estimates.

U.S. Treasuries reclaimed most of yesterday's losses, driving yields lower across the curve. The 2-yr yield declined three basis points to 0.20%, and the 10-yr yield declined five basis points to 0.61%. The U.S. Dollar Index declined 0.2% to 99.88. WTI crude declined 4.6%, or $0.60, to $12.37/bbl, although it was down as much as 22% at one point during the session.

Reviewing Tuesday's economic data:

The Conference Board's Consumer Confidence Index for April plunged to 86.9 (Briefing.com consensus 86.5) from a downwardly revised 118.8 (from 120.0) for March. The April reading is the lowest since June 2014.
The key takeaway from the report is that consumers, while thinking positively about things reopening again, are still less optimistic about their financial prospects, which could be a headwind for spending activity during the recovery phase.
The advance goods trade deficit totaled $64.2 bln in March after a $59.9 bln deficit in February. Advance retail inventories declined 1.3% in March after decreasing 0.3% in February. Advance wholesale inventories decreased 1.0% in March after decreasing 0.7% in February.
The S&P Case-Shiller Home Price Index for February increased 3.5% (Briefing.com consensus 3.7%).

Looking ahead, investors will receive the advance estimate for Q1 GDP, Pending Home Sales for March, and the weekly MBA Mortgage Applications Index on Wednesday.

Nasdaq Composite -4.1% YTD
S&P 500 -11.4% YTD
Dow Jones Industrial Average -15.6% YTD
Russell 2000 -22.0% YTD

Market Snapshot
Dow 24101.55 -32.23 (-0.13%)
Nasdaq 8607.74 -122.43 (-1.40%)
SP 500 2863.39 -15.09 (-0.52%)
10-yr Note +27/32 0.616
NYSE Adv 2080 Dec 816 Vol 1.0 bln
Nasdaq Adv 1878 Dec 1343 Vol 3.6 bln

Industry Watch
Strong: Energy, Financials, Industrials, Materials
Weak: Health Care, Information Technology, Communication Services

Moving the Market

-- Large-cap indices lose reopening momentum

-- Relative weakness in technology and health care companies

-- Small-caps, mid-caps, and most cyclical sectors outperform amid lingering reopening enthusiasm

WTI crude settles down well off session lows
28-Apr-20 15:25 ET
Dow +79.38 at 24213.16, Nasdaq -66.10 at 8664.07, S&P +2.35 at 2880.83

[BRIEFING.COM] The S&P 500 continues to trade flat amid weakness in the mega-cap technology/value stocks.

One last look at the S&P 500 sectors shows eight of the 11 sectors trading in positive territory, including 2%+ gains in energy (+2.3%), industrials (+2.2%), and materials (+2.0%). The health care (-1.6%) and communication services (-1.4%) sectors are down more than 1.0%.

WTI crude settled lower by $0.60 (-4.6%) to $12.37/bbl, which was a relatively good finish considering futures were down more than 20% at one point during the session.