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Stocks extend rally in pain trade to the upside
02-Jun-20 16:20 ET
Dow +267.63 at 25742.65, Nasdaq +56.33 at 9608.40, S&P +25.09 at 3080.69

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

[BRIEFING.COM] The S&P 500 increased 0.8% on Tuesday, paced higher by all 11 of its sectors in a "pain trade" to the upside. The Dow Jones Industrial Average increased 1.1%, the Nasdaq Composite increased 0.6%, and the Russell 2000 increased 0.9%.

Cyclical sectors that stand to benefit directly from an increase in economic activity, such as the S&P 500 energy (+2.7%), materials (+1.8%), and industrials (+1.3%) sectors, saw the biggest gains today. A strong finish into the close also lifted the consumer staples (+0.2%) and communication services (+0.5%) sectors into positive territory.

Some attributed the strong finish to a report from Sputnik News, which indicated that a limited COVID-19 vaccine could come by the end of the year, according to a U.S. Army medical researcher.

The gains above reflected the persistent reopening enthusiasm, but the price action was described as a "pain trade" due to underallocated investors, awaiting a pullback, presumably giving in to chase the market higher. That's what it felt like, at least, as many have been awestruck by the market's furious rally off its March 23 low.

Visa (V 193.36, +2.01, +1.0%) and Western Union (WU 23.05, +2.34, +11.3%) were among the latest companies noting stabilizing/improving conditions in May, providing some assurance for bullish investors.

Visa, specifically, saw total U.S. payments volume decline just 5% yr/yr in May versus an 18% decline in April. Western Union shares were also boosted by news that it's seeking to acquire smaller rival MoneyGram (MGI 3.36, +0.77, +29.7%), according to Bloomberg Law.

Separately, Goldman Sachs (GS 204.14, +4.21, +2.1%) and Microsoft (MSFT 184.91, +2.08, +1.1%) received price-target increases to $230 and $250, respectively, at Wells Fargo. The turnaround in MSFT shares, which were down nearly 1% intraday, helped support the broader market in afternoon trade.

U.S. Treasuries ended the session on a lower note, pushing yields slightly higher. The 2-yr yield increased two basis points to 0.16%, and the 10-yr yield increased two basis points to 0.68%. The U.S. Dollar Index declined 0.1% to 97.72. WTI crude rose 3.8%, or $1.35, to $36.80/bbl.

Investors did not receive any notable economic reports on Tuesday. Looking ahead, investors will receive the ADP Employment Change report for May, the ISM Non-Manufacturing Index for May, Factory Orders for April, and the weekly MBA Mortgage Applications Index on Wednesday.

Nasdaq Composite +7.1% YTD
S&P 500 -4.6% YTD
Dow Jones Industrial Average -9.8% YTD
Russell 2000 -15.0% YTD

Market Snapshot
Dow 25742.65 +267.63 (1.05%)
Nasdaq 9608.40 +56.33 (0.59%)
SP 500 3080.69 +25.09 (0.82%)
10-yr Note -2/32 0.678
NYSE Adv 2146 Dec 753 Vol 1.0 bln
Nasdaq Adv 2017 Dec 1240 Vol 3.9 bln

Industry Watch
Strong: Energy, Materials, Industrials
Weak: Consumer Staples

Moving the Market

-- Stock market closes near session highs in "pain trade"

-- Continued optimism about an economic recovery; cyclical sectors outperformed

-- Turnaround in mega-cap stocks supported the market's strong finish

WTI crude gains nearly 4%
02-Jun-20 15:30 ET
Dow +103.23 at 25578.25, Nasdaq -1.78 at 9550.29, S&P +5.56 at 3061.16

[BRIEFING.COM] The S&P 500 continues to pare gains and is now up just 0.2%.

One last look at the S&P 500 sectors shows nine of the 11 sectors trading in positive territory. The energy (+2.0%), materials (+1.6%), and industrials (+1.1%) remain in the lead, while the consumer staples (-0.4%) and communication services (-0.1%) sectors tick lower.

WTI crude futures settled today's session up $1.35 (+3.8%) to $36.80/bbl.