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Stocks give up intraday gains on China uncertainty
28-May-20 16:20 ET
Dow -147.63 at 25400.64, Nasdaq -43.37 at 9369.01, S&P -6.40 at 3029.60

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

[BRIEFING.COM] U.S. stocks trimmed weekly gains on Thursday, as headline uncertainty related to China caused the major indices to falter into the close. The S&P 500 (-0.2%), Dow Jones Industrial Average (-0.6%), and Nasdaq Composite (-0.5%) finished slightly lower. The Russell 2000, which traded lower for most of the session, declined 2.5%.

The market started the session little changed, catching its breath after a strong two-day rally, but also after China approved legislation to tighten its control over Hong Kong, weekly initial jobless claims totaled 2.123 million (Briefing.com consensus 1.950 million), and Q1 GDP was revised down to -5.0% (Briefing.com consensus -4.8%) from -4.8% in the advance estimate.

Investors, at first, didn't feel inclined to sell given the fear of missing out on further gains amid growing signs of an economic recovery. Buyers, instead, concentrated their efforts toward the defensive-oriented segments of the market, such as the leading S&P 500 utilities (+3.0%), health care (+1.3%), and real estate (+1.2%) sectors.

Sellers later took control after President Trump said late in the session that he will hold a press event about China on Friday. Reports indicated that the president could unveil sanctions on Chinese officials in response to the Hong Kong national security law, threatening to exacerbate U.S.-China tensions.

The S&P 500 energy (-2.9%) and financials (-1.6%) sectors accelerated intraday losses following the headline negativity, while the consumer discretionary (-1.1%), industrials (-1.0%), and communication services (-1.0%) sectors fell into negative territory.

Shares of Facebook (FB 225.46, -3.68, -1.6%) and Twitter (TWTR 31.60, -1.47, -4.5%), meanwhile, were pressured by President Trump's executive-order plans to limit legal protections for social media companies that unfairly stifle free speech.

Separately, Workday (WDAY 182.56, +12.18, +7.2%) and Dollar Tree (DLTR 97.64, +10.11, +11.6%) stood out after pleasing investors with their earnings reports, while HP Inc. (HPQ 15.01, -2.11, -12.3%) disappointed investors with its results.

U.S. Treasuries ended the session mixed. The 2-yr yield was unchanged at 0.17%, while the 10-yr yield increased three basis points to 0.71%. The U.S. Dollar Index declined 0.6% to 98.50. WTI crude futures rose 2.7%, or $0.89, to $33.68/bbl.

Reviewing Thursday's batch of economic data:

Initial claims for the week ending May 23 decreased by 323,000 to 2.123 million (Briefing.com consensus 1.950 million). Continuing claims for the week ending May 16 decreased by 3,860,000 to 21.052 million.
The key takeaway from the report will be the downturn in continuing claims, which will feed into the market's upbeat view about reopening prospects.
New orders for durable goods declined 17.2% m/m in April (Briefing.com consensus -17.0%) following a downwardly revised 16.6% decline (from -14.4%) in March. Excluding transportation, new orders for durable goods declined 7.4% m/m (Briefing.com consensus -8.4%) following a downwardly revised 1.7% decline (from -0.2%) in March.
The key takeaway from the report is that it wasn't much of a surprise as activity in April seized up with the shutdown measures employed to contain the spread of the coronavirus.
The second estimate for Q1 GDP showed a downward revision to -5.0% (Briefing.com consensus -4.8%) from the 4.8% decline seen in the advance estimate. The GDP Price Deflator was revised up to 1.4% (Briefing.com consensus 1.3%) from 1.3%.
The key takeaway from the report is that it's old news for a market that is clearly locked on the idea that economic activity is going to be rebounding in coming months.
Pending Home Sales dropped 21.8% in April (Briefing.com consensus -4.8%) after declining an unrevised 20.8% in March.

Looking ahead to Friday, investors will receive the Personal Income and Spending report for April, the revised University of Michigan Index of Consumer Sentiment for May, the Chicago PMI for May, and the Advance International Trade in Goods, Retail Inventories, and Wholesale Goods reports for April.

Nasdaq Composite +4.4% YTD
S&P 500 -6.2% YTD
Dow Jones Industrial Average -11.0% YTD
Russell 2000 -16.1% YTD

Market Snapshot
Dow 25400.64 -147.63 (-0.58%)
Nasdaq 9369.01 -43.37 (-0.46%)
SP 500 3029.60 -6.40 (-0.21%)
10-yr Note -1/32 0.700
NYSE Adv 1220 Dec 1665 Vol 1.0 bln
Nasdaq Adv 1107 Dec 2135 Vol 4.0 bln

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

Moving the Market

-- President Trump said he will hold a press event about China on Friday, headline uncertainty causes stocks to give up intraday gains

-- Weekly initial jobless claims totaled 2.123 million (Briefing.com consensus 1.950 million)

-- Defensive-minded session

WTI crude gains nearly 3%
28-May-20 15:30 ET
Dow +29.50 at 25577.77, Nasdaq +32.35 at 9444.73, S&P +13.70 at 3049.70

[BRIEFING.COM] The S&P 500 is losing some gains and is currently up 0.5%.

Looking at the S&P 500 sectors shows mixed results. The utilities (+3.1%), health care (+1.9%), and materials (+1.4%) sectors remain today's leaders, while the energy (-1.6%), financials (-0.6%), and consumer discretionary (-0.3%) sectors lag.

WTI crude futures settled today's session up $0.89 (+2.7%) to $33.68/bbl.