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Stocks close higher on Election Day
03-Nov-20 16:15 ET

Dow +554.98 at 27479.97, Nasdaq +202.96 at 11160.50, S&P +58.92 at 3369.16

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

[BRIEFING.COM] The S&P 500 advanced 1.8% on Election Day, as investors bought the dip for the second straight day ahead of tonight's results. The Nasdaq Composite (+1.9%) and Dow Jones Industrial Average (+2.1%) eked out larger gains while the Russell 2000 (+2.9%) legged out the clear advantage.

Ten of the 11 S&P 500 sectors finished in positive territory with each rising more than 1.0%. The industrials (+2.9%), financials (+2.2%), and consumer discretionary (+2.0%) sectors increased at least 2.0%; the energy sector (-0.8%) was the only sector that closed lower despite higher oil prices ($37.62, +0.83, +2.3%).

While there was no specific catalyst today, the gains might have been aided by an acknowledgement that the market was still oversold on a short-term basis. In addition, there was a sense of optimism that an election outcome could be projected tonight or by tomorrow morning (or perhaps some relief that it's almost over).

The positive price action also contributed to continued selling in longer-dated Treasuries, which steepened the curve in a trade that benefited the financials sector. The 2-yr yield was unchanged at 0.16%, while the 10-yr yield increased three basis points to 0.88% to close at its highest level since June 8. The U.S. Dollar Index fell 0.7% to 93.51.

In the tech space, PayPal (PYPL 179.81, -7.95, -4.2%) and Skyworks (SWKS 138.80, -3.32, -2.3%) were notable laggards despite exceeding earnings expectations. PayPal, however, did issue downside Q4 EPS guidance. Arista Networks (ANET 249.49, +33.37, +15.4%) surged 15% following its upbeat earnings results and guidance.

Interestingly, the S&P 500 came within 12 points of its 50-day moving average (3400) shortly before the close. The catalyst that could propel the benchmark index above the key technical level is, of course, the election. As an aside, trading volume was comparable to previous sessions.

Reviewing Tuesday's economic data:

Factory orders for manufactured goods increased 1.1% m/m in September, as expected, following a downwardly revised 0.6% increase (from 0.7%) in August. This is the fifth straight monthly increase in factory orders.
The key takeaway from the report is the affirmation that business spending continued to increase in September, evidenced by a 1.0% increase in new orders for nondefense capital goods excluding aircraft, versus a 2.4% increase in August.

Looking ahead, investors will receive the ISM Non-Manufacturing Index for October, the ADP Employment Change Report for October, the Trade Balance Report for September, and the weekly MBA Mortgage Applications Index on Wednesday.

Nasdaq Composite +24.4% YTD
S&P 500 +4.3% YTD
Dow Jones Industrial Average -3.7% YTD
Russell 2000 -3.3% YTD


Market Snapshot
Dow 27479.97 +554.98 (2.06%)
Nasdaq 11160.50 +202.96 (1.85%)
SP 500 3369.16 +58.92 (1.78%)
10-yr Note -3/32 0.886

NYSE Adv 2407 Dec 606 Vol 861.9 mln
Nasdaq Adv 2688 Dec 697 Vol 3.2 bln


Industry Watch
Strong: Financials, Industrials, Consumer Discretionary

Weak: Energy


Moving the Market
-- Stocks rebounded for the second straight day ahead of Election Day results

-- Buy-the-dip mindset

-- Longer-dated Treasury yields continued to increase



WTI crude futures settle higher while equities trim gains
03-Nov-20 15:25 ET

Dow +524.97 at 27449.96, Nasdaq +194.97 at 11152.51, S&P +55.23 at 3365.47
[BRIEFING.COM] The S&P 500 is trading higher by 1.6% after being up as much as 2.4% earlier today.

One last look at the sector performances shows industrials (+2.6%), financials (+2.1%), and consumer discretionary (+1.9%) still in the lead, while the energy sector (-1.2%) has extended its intraday decline to over 1.0%.

WTI crude futures settled higher by 2.3%, or $0.83, to $37.62/bbl.