[BRIEFING.COM] The S&P 500 declined 0.3% on Tuesday in a tight-ranged session. The mega-cap stocks had a strong outing that fueled the outperformance of the Nasdaq Composite (+0.6%), while many of the value/cyclical stocks dragged on the Dow Jones Industrial Average (-0.8%) and Russell 2000 (-0.9%).
New macro developments were lacking, and earnings reactions were generally disappointing, leaving investors grappling with the same growth/coronavirus concerns that were attributed to yesterday's retreat. The key difference today was that these concerns were manifested in a more constructive way: decent gains in the mega-caps.
Accordingly, the S&P 500 consumer discretionary (+0.6%), communication services (+0.6%), and information technology (+0.5%) sectors finished in positive territory. Microsoft (MSFT 213.25, +3.17, +1.5%) provided support for the tech sector ahead of its earnings report after the close.
No other sector within the benchmark index closed higher, and the cyclical industrials (-2.2%), financials (-1.9%), energy (-1.4%), and materials (-1.0%) sectors declined at least 1.0%.
Caterpillar (CAT 157.91, -5.29, -3.2%) and 3M (MMM 161.04, -5.12, -3.1%) were notable drags on the industrials sector after the companies refrained from providing guidance. Health care companies Pfizer (PFE 37.42, -0.50, -1.3%), Merck (MRK 77.99, -0.85, -1.1%), and Eli Lilly (LLY 131.90, -23.29, -5.6%) issued in-line/upside guidance, but shares still closed lower.
Separately, Xilinx (XLNX 124.35, +9.80, +8.6%) agreed to be acquired by Adv. Micro Devices (AMD 78.88, -3.35, -4.1%) in an all-stock transaction valued at $35 billion. Exact Sciences (EXAS 131.12, +24.22, +23.0%) said it will acquire Thrive for up to $2.15 billion in cash and stock.
U.S. Treasuries padded recent gains, pushing yields lower across the curve. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield declined two basis points to 0.78%. The U.S. Dollar Index decreased 0.1% to 92.96. WTI crude futures rebounded 2.5%, or $0.97, to $39.55/bbl.
Reviewing Tuesday's economic data:
Total durable orders increased 1.9% m/m in September (Briefing.com consensus +0.7%) following a downwardly revised 0.4% increase (from 0.5%) in August. Excluding transportation, durable orders rose 0.8% m/m (Briefing.com consensus +0.4%) on top of an upwardly revised 1.0% increase (from 0.7%) in August. The key takeaway from the report is that business spending continued to rebound, evidenced by the fifth consecutive increase in nondefense capital goods orders, excluding aircraft, which jumped 1.0% after increasing 2.1% in August. The Conference Board's Consumer Confidence Index slipped to 100.9 in October (Briefing.com consensus 101.9) from a downwardly revised 101.3 (from 101.8) in September. The key takeaway from the report is that consumers are feeling less confident about the short-term outlook, as the rise in coronavirus cases and still-high unemployment levels have contributed to concerns about job prospects. The FHFA Housing Price Index for October increased 1.5% (Briefing.com consensus 0.8%). The S&P Case-Shiller Home Price Index for August increased 5.2% (Briefing.com consensus 3.8%).
Looking ahead, investors will receive the weekly MBA Mortgage Applications Index on Wednesday.
Nasdaq Composite +27.4% YTD S&P 500 +5.0% YTD Dow Jones Industrial Average -3.8% YTD Russell 2000 -4.7% YTD
Industry Watch Strong: Consumer Discretionary, Information Technology, Communication Services Weak: Energy, Industrials, Financials, Materials, Real Estate
Moving the Market
-- Growth concerns persisted
-- Earnings reactions were generally disappointing
-- Mega-cap stocks outperformed at expense of the cyclical stocks
WTI crude rebounds, but not the energy sector 27-Oct-20 15:25 ET Dow -159.91 at 27525.41, Nasdaq +67.42 at 11426.29, S&P -5.13 at 3395.84
[BRIEFING.COM] The S&P 500 is trading just below its flat line, while the Nasdaq is trading higher by 0.6%.
One last look at the S&P 500 sectors information technology (+0.6%), consumer discretionary (+0.4%), and communication services (+0.4%) still trading higher and supporting the market; conversely, the industrials (-1.9%), financials (-1.5%), and materials (-0.7%) sectors lag.
WTI crude futures settled higher by 2.5%, or $0.97, to $39.55/bbl. Today was a solid rebound effort after prices fell more than 3.0% yesterday, but that hasn't translated to a higher energy sector (-0.7%).
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.