Stocks close mostly lower but pare losses
18-Feb-21 16:20 ET
Dow -119.68 at 31493.34, Nasdaq -100.14 at 13865.38, S&P -17.36 at 3913.97 https://www.briefing.com/stock-market-update
[BRIEFING.COM] The S&P 500 declined 0.4% on Thursday, although it was down as much as 1.2% in the morning. The Nasdaq Composite (-0.7%) and Dow Jones Industrial Average (-0.4%) also closed well off session lows, while the Russell 2000 (-1.7%) struggled throughout the session.
The weak start was attributed primarily to profit-taking interest despite a downtick in long-term interest rates and the latest weekly jobless claims data supporting the case for additional fiscal stimulus. The 10-yr yield decreased one basis point to 1.29%; weekly initial claims increased by 13,000 to 861,000 (Briefing.com consensus 775,000).
Losses were relatively widespread with nine of the 11 S&P 500 sectors closing lower, but investors did appear to buy the dip in many areas of the market. The information technology sector, for example, declined 0.5% after being down 1.7% intraday, and the consumer discretionary sector (+0.1%) overcame a 1.1% intraday decline.
Exceptions to the buy-the-dip activity were the S&P 500 energy sector (-2.3%), which closed near session lows, and Walmart (WMT 137.66, -9.54, -6.5%), which dropped 6.5% following its mixed earnings report and tepid FY22 EPS guidance.
The utilities sector (+0.6%), to its credit, traded higher for most of the session amid earnings-driven gains in Southern (SO 59.85, +0.58, +1.0%) and FirstEnergy (FE 34.25, +2.30, +7.2%).
Twilio (TWLO 443.49, +31.84, +7.7%) was another earnings standout with an 8% gain that propped the stock to a fresh all-time high.
In other corporate news, GameStop (GME 40.69, -5.25, -11.4%) fell another 11% amid the GME hearing on Capitol Hill, Coca-Cola (KO 50.77, +0.64, +1.3%) increased its quarterly dividend by one cent to $0.42/share, and Wells Fargo (WFC 36.96, +0.37, +1.0%) was upgraded to Neutral from Underweight at JP Morgan amid news that the Fed is getting closer to easing the company's asset restrictions.
The 2-yr yield was unchanged at 0.10%. The U.S. Dollar Index decreased 0.4% to 90.56. WTI crude futures decreased 1.2%, or $0.70, to $60.42/bbl.
Reviewing Thursday's economic data:
Initial jobless claims for the week ending February 13 increased by 13,000 to 861,000 (Briefing.com consensus 775,000). Continuing claims for the week ending February 6 decreased by 64,000 to 4.494 million.
The key takeaway is that the upward thrust in initial jobless claims, which remain at extremely high levels, will continue to fuel calls to go big on the next stimulus package.
Housing starts declined 6.0% m/m in January to a seasonally adjusted annual rate of 1.580 million units (Briefing.com consensus 1.670 million). Building permits increased 10.4% m/m to 1.881 million (Briefing.com consensus 1.670 million).
The key takeaway is that there was a notable decline in single-unit starts (-12.2%) that will fail to provide relief for a tightly-supplied housing market, thereby keeping upward pressure on median home prices.
The Philadelphia Fed Index decreased to 23.1 in February (Briefing.com consensus 15.0) from an unrevised 26.5 in January.
Import prices increased 1.4% in January while import prices excluding oil increased 0.8%. Export prices increased 2.5% in January while export prices excluding agriculture increased 2.2%.
Looking ahead, investors will receive Existing Home Sales for January and the flash IHS Markit Manufacturing and Services PMIs for February on Friday.
Russell 2000 +12.3% YTD
Nasdaq Composite +7.6% YTD
S&P 500 +4.2% YTD
Dow Jones Industrial Average +2.9% YTD
Dow 31493.34 -119.68 (-0.38%)
Nasdaq 13865.38 -100.14 (-0.72%)
SP 500 3913.97 -17.36 (-0.44%)
10-yr Note -4/32 1.313
NYSE Adv 1044 Dec 2150 Vol 941.4 mln
Nasdaq Adv 1129 Dec 2812 Vol 6.4 bln
Strong: Utilities, Consumer Discretionary
Weak: Energy, Communication Services, Materials, Health Care
Moving the Market
-- Stocks close mostly lower but pare early losses
-- Walmart (WMT) declined 6.5% on mixed earnings, tepid FY22 EPS guidance
-- Profit-taking pressure
WTI crude futures give back some gains
18-Feb-21 15:25 ET
Dow -91.11 at 31521.91, Nasdaq -69.81 at 13895.71, S&P -12.42 at 3918.91
[BRIEFING.COM] The S&P 500 is trading lower by 0.3%, which is the comparable to the decline in the Dow (-0.3%).
One last look at the S&P sectors shows energy (-2.1%) trading near session lows with a 2% decline amid a modest retrace in oil prices, while the utilities (+0.7%) and consumer discretionary (+0.3%) sectors trade higher.
WTI crude futures settled lower by 1.2%, or $0.70, to $60.42/bbl. Prior to today, WTI crude futures were up 17% this month.