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S&P 500 snaps winning streak, but Dow closes higher
04-Jun-20 16:20 ET

Dow +11.93 at 26281.82, Nasdaq -67.10 at 9615.84, S&P -10.52 at 3112.22

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

[BRIEFING.COM] The S&P 500 declined 0.3% on Thursday in a mixed session to snap a four-session winning streak. The Dow Jones Industrial Average eked out a 0.1% gain, the Nasdaq Composite declined 0.7%, and the Russell 2000 closed flat.

Early in the session, the S&P 500 overcame a negative start, but failed to break above the 3130 level, which was yesterday's high and the high from March 4. The Nasdaq 100 (-0.8%) even set a new all-time high before retracing gains alongside the broader market. Technical factors, then, appeared to have a role in calming this market down.

The information technology (-0.8%) and health care (-0.8%) sectors were influential laggards, but the rate-sensitive real estate (-1.8%) and utilities (-2.0%) sectors declined the most amid an increase in longer-dated Treasury yields. The 10-yr yield rose six basis points to 0.82%, while the 2-yr yield was flat at 0.19%.

There were pockets of relative strength, though, specifically in the S&P 500 financials (+2.0%) and industrials (+1.1%) sectors, the Philadelphia Semiconductor Index (+0.8%), and in many of the travel-related industries. The battered travel stocks exhibited huge gains today.

The latter were boosted by American Airlines (AAL 16.74, +4.89, +41.3%) announcing plans to increase its domestic flying schedule for the summer travel season due to improving demand. AAL shares surged 41% while Boeing (BA 184.30, +11.14, +6.4%) shares rose 6%.

In other developments, weekly initial claims remained elevated at 1.877 million (Briefing.com consensus 1.800 million), continuing claims increased by 649,000 to 21.487 million, and the ECB increased its pandemic emergency purchase program by EUR600 billion to a total of EUR1.350 trillion. The ECB extended this program until at least the end of June 2021.

The aggressive stimulus from the ECB fueled optimism about a recovery in Europe, which could be on the verge of a stronger fiscal union. The euro continued to rise against the dollar, contributing to another 0.5% decline in the U.S. Dollar Index (96.82).

Reviewing Thursday's economic data:

Initial claims for the week ending May 30 decreased by 249,000 to 1.877 million (Briefing.com consensus 1.800 million). Continuing claims for the week ending May 23 increased by 649,000 to 21.487 million.
The key takeaway from the report is twofold: (1) initial claims are still extremely high and (2) continuing claims didn't continue to improve, denoting some slowness in rehiring activity.
A revision reported by the BLS indicated nonfarm business sector labor productivity decreased 0.9% (Briefing.com consensus -2.6%) in the first quarter versus an originally reported decrease of 2.5%. Unit labor costs, meanwhile, increased 5.1% versus an originally reported 4.8% increase.
The key takeaway from the report is that productivity was better than expected in the first quarter, but it was still weak all the same.
The U.S. trade deficit widened to $49.4 billion in April (Briefing.com consensus -$49.8 billion) from an upwardly revised $42.3 billion (from -$44.4 billion) in March.
The key takeaway from the report is that it was accented by a sizable decline in both exports and imports, which was a byproduct of reduced demand due to shutdown measures implemented around the globe to help contain the spread of COVID-19.

Looking ahead, investors will receive the Employment Situation Report for May and Consumer Credit for April on Friday.

Nasdaq Composite +7.2% YTD
S&P 500 -3.7% YTD
Dow Jones Industrial Average -7.9% YTD
Russell 2000 -13.0% YTD


Market Snapshot
Dow 26281.82 +11.93 (0.05%)
Nasdaq 9615.84 -67.10 (-0.69%)
SP 500 3112.22 -10.52 (-0.34%)
10-yr Note -7/32 0.821

NYSE Adv 1610 Dec 1296 Vol 1.2 bln
Nasdaq Adv 1689 Dec 1589 Vol 6.0 bln


Industry Watch
Strong: Financials, Industrials, Materials

Weak: Utilities, Real Estate, Health Care, Information Technology


Moving the Market
-- Stocks close mixed, S&P 500 snaps four-session winning streak while Dow closes higher

-- Travel-related stocks boosted by positive update from American Airlines (AAL)

-- Weekly initial claims decreased by 323,000 to 2.123 million (Briefing.com consensus 1.950 million), while continuing claims increased 21.487 million

-- ECB increased its pandemic emergency purchase program by EUR600 billion to a total of EUR1.350 trillion



WTI crude ekes out gain
04-Jun-20 15:30 ET

Dow -116.10 at 26153.79, Nasdaq -95.91 at 9587.03, S&P -23.86 at 3098.88
[BRIEFING.COM] The S&P 500 is trading lower by 0.8% and is on pace to close lower for the first time in five sessions.

One last look at the S&P 500 sectors shows utilities (-3.0%) and real estate (-2.4%) continuing to feel the burden of the increase in longer-dated Treasuries, while the financials (+1.3%) and industrials (+0.6%) sectors continue to sport solid gains.

WTI crude futures settled today's session higher by $0.14 (+0.4%) to $37.42/bbl.