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Value stocks lead market higher
27-May-20 16:25 ET
Dow +553.16 at 25548.27, Nasdaq +72.14 at 9412.38, S&P +44.36 at 3036.00

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

[BRIEFING.COM] The S&P 500 advanced 1.5% on Wednesday in a broad-based advance led by many of the value-oriented stocks. The Dow Jones Industrial Average (+2.2%) and Russell 2000 (+3.1%) outperformed the benchmark index, while the Nasdaq Composite increased 0.8%.

From a sector perspective, the S&P 500 financials (+4.3%) and industrials (+3.3%) sectors benefited the most from this value trade, which was based the speculation that these beaten-down cyclical groups will outperform in an economic recovery that is being priced in the stock market. The information technology sector (+0.5%) was today's sector laggard.

Today's price action was notable in the sense that investors continued to buy the intraday dip (S&P 500 was down 0.7% in the morning), which then progressed into a steady advance throughout the day. A strong finish helped the S&P 500 close firmly above its 200 day-moving average (3000) for the first time since March 4.

Signals out of Washington, meanwhile, were mixed. Senate Majority Leader McConnell said Senate discussions for a fifth COVID-19 relief bill will start in June, while Secretary of State Pompeo said he reported to Congress that Hong Kong is no longer autonomous from China.

The possibility for more fiscal stimulus was regarded as positive news, while the threat of increased U.S.-China tensions remained something to consider but nothing to worry about. President Trump, meanwhile, threatened "big action" against Twitter (TWTR 33.07, -0.94, -2.8%) after the company issued fact-checking labels on two of his tweets.

Separately, the Fed's Beige Book noted a sharp decrease in economic activity in all districts based on information collected on or before May 18. This was regarded as "old" news, though, with many businesses continuing to reopen, including a "green shoots" observation from Boeing (BA 149.52, +4.79, +3.3%).

U.S. Treasuries finished mixed and little changed. The 2-yr yield was unchanged at 0.17%, and the 10-yr yield declined two basis points to 0.68%. The U.S. Dollar Index increased 0.1% to 99.01. WTI crude declined 1.1% (-$0.38) to $33.98/bbl.

Wednesday's economic data was limited to the weekly MBA Mortgage Applications Index, which increased 2.7% following a 2.6% decline in the prior week. Looking ahead to Thursday, investors will receive the weekly Initial and Continuing Claims report, Durable Goods Orders for April, the second estimate for Q1 GDP, and Pending Home Sales for April.

Nasdaq Composite +4.9% YTD
S&P 500 -6.0% YTD
Dow Jones Industrial Average -10.5% YTD
Russell 2000 -13.9% YTD

Market Snapshot
Dow 25548.27 +553.16 (2.21%)
Nasdaq 9412.38 +72.14 (0.77%)
SP 500 3036.00 +44.36 (1.48%)
10-yr Note +1/32 0.688
NYSE Adv 2361 Dec 537 Vol 1.1 bln
Nasdaq Adv 2196 Dec 1087 Vol 4.4 bln

Industry Watch
Strong: Financials, Industrials, Real Estate
Weak: Information Technology

Moving the Market

-- Value stocks lead market higher and lift S&P 500 back above its 200-day moving average (3000)

-- Senate will discuss the next COVID-19 relief bill in June, European Commission proposed a EUR750 billion recovery fund

-- Bullish trend prevails on recovery optimism

WTI crude settles modestly lower
27-May-20 15:25 ET
Dow +358.26 at 25353.37, Nasdaq +34.77 at 9375.01, S&P +27.60 at 3019.24

[BRIEFING.COM] The S&P 500 is up 0.9% to extend its weekly gain to 2.2%.

One last look at the S&P 500 sectors shows all 11 sectors now trading higher. The financials (+3.6%) and industrials (+2.6%) sectors remain on top, while the information technology (+0.1%) sector clings onto a slim gain.

WTI crude settled today's session down $0.38 (-1.1%) to $33.98/bbl.