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Stocks close higher, Nasdaq turns positive for the year
07-May-20 16:20 ET

Dow +211.25 at 23875.89, Nasdaq +125.27 at 8979.68, S&P +32.77 at 2881.19

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

[BRIEFING.COM] Cyclical sectors led the S&P 500 to a 1.2% gain on Thursday, while mega-cap technology stocks carried the Nasdaq Composite to a 1.4% gain and into positive territory for the year. The Dow Jones Industrial Average rose 0.9%, and the Russell 2000 rose 1.6%.

The day started with investors receiving economic data that the market construed as relatively good: weekly initial jobless claims totaled 3.169 million (Briefing.com consensus 2.900 million), but it was encouraging that it reflected another 677,000 decline from the prior week. Likewise, China's imports fell more than expected in April, but an increase in exports was a nice surprise.

Weekly claims are a leading indicator, so the declining trend appeared to endorse the market's reopening/recovery enthusiasm, which was made apparent in the outperformance of the cyclical energy (+2.5%), financials (+2.2%), and materials (+2.1%) sectors.

The S&P 500 peaked at around the 2900 level before gradually paring gains throughout the afternoon. The defensive-oriented consumer staples (-0.4%) and health care (-0.1%) sectors closed in negative territory.

It was still a good day with many stocks receiving earnings-related boosts, including PayPal (PYPL 146.29, +17.98, +14.0%), T-Mobile US (TMUS 95.29, +8.70, +10.1%), Lyft (LYFT 31.78, +5.66, +21.7%), and Twilio (TWLO 170.89, +48.49, +39.6%). Investors were especially pleased to hear PayPal and Lyft noting improved/stabilizing conditions in April.

Moderna (MRNA 53.19, +4.24, +8.7%) was another story stock after announcing it received FDA approval to proceed to a Phase 2 trial for its COVID-19 vaccine candidate.

It wasn't a true risk-on day, though, as U.S. Treasuries padded gains throughout the session and WTI crude futures ($23.65/bbl, -0.30, -1.3%) gave up an intraday gain. The advance in Treasuries drove the 2-yr yield down six basis points to 0.11% and the 10-yr yield down eight basis points to 0.63%. The U.S. Dollar Index declined 0.2% to 99.88.

Reviewing Thursday's economic data:

Initial claims for the week ending May 2 decreased by 677,000 to 3.169 million (Briefing.com consensus 2.900 mln). Continuing claims for the week ending April 25 surged by 4,636,000 to 22.647 million, which is a record high.
The market, in its current frame of mind, is apt to see the decline in initial claims as relatively good news, yet the key takeaway from the report is that the massive influx of initial claims is just bad in an absolute sense for economic activity because those jobs won't be recovered nearly as quickly as they have been lost.
Nonfarm business sector labor productivity decreased 2.5% in the first quarter (Briefing.com consensus -6.0%) following a 1.2% increase in the fourth quarter. Unit labor costs increased 4.8% (Briefing.com consensus +2.9%) after increasing 0.9% in the fourth quarter.
The key takeaway from the report is that productivity was weak, which is a headwind to an increased standard of living. That headwind should be even stronger in the second quarter.
Consumer credit contracted by $12.1 bln in March (Briefing.com consenus $7.5 bln) after increasing a downwardly revised $20.0bln (from $22.3 bln) in February.
The key takeaway from the report is that it shows how banks and finance companies grew more restrictive in extending revolving credit to individuals in March.

Looking ahead, investors will receive the Employment Situation Report for April and Wholesale Inventories for March on Friday.

Nasdaq Composite +0.1% YTD
S&P 500 -10.8% YTD
Dow Jones Industrial Average -16.3% YTD
Russell 2000 -23.1% YTD


Market Snapshot
Dow 23875.89 +211.25 (0.89%)
Nasdaq 8979.68 +125.27 (1.41%)
SP 500 2881.19 +32.77 (1.15%)
10-yr Note +29/32 0.638

NYSE Adv 2090 Dec 767 Vol 955.3 mlnb
Nasdaq Adv 2228 Dec 964 Vol 3.7 bln


Industry Watch
Strong: Energy, Financials, Materials

Weak: Consumer Staples, Health Care


Moving the Market
-- Stocks close higher, Nasdaq turns positive for the year

-- Cyclical sectors outperform, led by financials and energy

-- Weekly jobless claims declined by 677,000 to 3.169 million (Briefing.com consensus 2.900 million)

-- Treasuries advance despite gains in stock market



WTI crude fades gains, settles lower
07-May-20 15:25 ET

Dow +216.44 at 23881.08, Nasdaq +120.54 at 8974.95, S&P +34.28 at 2882.70
[BRIEFING.COM] The S&P 500 is up 1.2%. Given the late-session fades over the past two sessions, the last 30 minutes of action will be interesting to watch.

Earlier, the Consumer Credit report for March showed consumer credit contract by $12.1 bln in March (Briefing.com consensus $7.5 bln) after increasing a downwardly revised $20.0 bln (from $22.3.0 billion) in February.

WTI crude futures settled down $0.30 (-1.3%) to $23.65/bbl.