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Stock market posts modest gains to start the week
01-Jun-20 16:15 ET
Dow +91.91 at 25475.02, Nasdaq +62.18 at 9552.07, S&P +11.42 at 3055.60

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

[BRIEFING.COM] The major indices posted modest gains on Monday, as the market remained resilient to selling pressure and enthused by reopening prospects. The S&P 500 (+0.4%) and Nasdaq Composite (+0.4%) both increased 0.4%, while the Russell 2000 (+0.8%) and Dow Jones Industrial Average (+0.7%) pulled ahead.

Early in the day, investors showed little conviction following the nationwide protests over the death of George Floyd and a Bloomberg report that suggested Chinese officials instructed major state-run agricultural companies to pause their purchases of some U.S. agricultural products. Despite the negative backdrop, reopening optimism slowly pushed stocks higher.

Shares of beaten-down small-caps, banks, airlines, cruise lines, and energy companies were among the biggest gainers. At the same time, investors assumed some defensive positioning within the mega-caps and the S&P 500 real estate (+2.1%) and utilities (+1.0%) sectors, which outperformed alongside the financials (+1.2%) and energy (+1.7%) sectors.

Today's sector laggards were the health care (-1.0%) and information technology (unch) sectors. Pfizer (PFE 35.46, -2.73, -7.2%) was a noticeable drag on the health care space after the company provided a disappointing update for its Phase 3 breast cancer trial.

On a related note, Eli Lilly (LLY 152.45, -0.50, -0.3%) initiated the first study of a potential COVID-19 antibody treatment in humans. LLY shares, however, closed lower amid the intraday weakness in the sector.

Separately, reports indicated that OPEC moved up its production meeting to June 4 and that it's close to reaching an agreement with Russia to extend production cuts by another two months. WTI crude futures declined 0.6%, or $0.21, to $35.28/bbl despite the news.

U.S. Treasuries ended the session little changed. The 2-yr yield and the 10-yr yield were flat at 0.15% and 0.65%, respectively. The U.S. Dollar Index declined another 0.5% to 97.82, as reopening optimism increased demand for foreign currencies.

Reviewing Monday's economic data, which included the ISM Manufacturing Index for May:

The ISM Manufacturing Index for May ticked up to 43.1% (Briefing.com consensus 44.0%) from 41.5% in April. This the third straight reading below 50.0%, which is the dividing line between expansion and contraction.
The key takeaway from the report is that upticks were seen in the key measures of new orders, production, employment, prices, backlog of orders, and new export orders. All were still below 50.0%, yet they corroborate the view that the downturn in manufacturing activity wasn't as bad as the downturn seen in April.
Construction spending declined 2.9% m/m in April (Briefing.com consensus -6.0%) on the heels of a downwardly revised flat reading (from +0.9%) for March. Total residential spending was down 4.5% while total nonresidential spending decreased 1.8%.
The key takeaway from the report is that total construction spending is still up 3.0% yr/yr, underpinned by a 3.8% yr/yr increase in total private construction spending and a 0.8% yr/yr increase in total public construction spending.

Looking ahead, investors will receive auto and truck sales throughout the day on Tuesday.

Nasdaq Composite +6.5% YTD
S&P 500 -5.4% YTD
Dow Jones Industrial Average -10.7% YTD
Russell 2000 -15.8% YTD

Market Snapshot
Dow 25475.02 +91.91 (0.36%)
Nasdaq 9552.07 +62.18 (0.66%)
SP 500 3055.60 +11.42 (0.38%)
10-yr Note -1/32 0.666
NYSE Adv 2222 Dec 719 Vol 903.9 mln
Nasdaq Adv 1944 Dec 1311 Vol 3.8 bln

Industry Watch
Strong: Financials, Energy, Real Estate, Utilities
Weak: Health Care, Information Technology

Moving the Market

-- Reopening enthusiasm carried stock market higher despite weekend protests, simmering U.S.-China tensions

-- Small-caps, financials, airlines, cruise lines, and energy stocks among biggest gainers; mega-caps outperformed, too

-- Relative weakness in the health care space

WTI crude settles slightly lower
01-Jun-20 15:25 ET
Dow +104.81 at 25487.92, Nasdaq +70.00 at 9559.89, S&P +14.36 at 3058.54

[BRIEFING.COM] The S&P 500 is trading near session highs with a 0.5% gain.

One last look at the S&P 500 sectors shows real estate (+2.6%), energy (+1.9%), utilities (+1.5%), and financials (+1.3%) sectors leading in gains. The health care sector (-0.9%) struggles in negative territory, while the information technology sector (+0.1%) clings onto a small gain.

WTI crude futures settled down $0.21 (-0.6%) to $35.28/bbl. Related news included OPEC moving its production to June 4, and OPEC and its allies are close to extending oil production cuts by another two months.