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Market Snapshot

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

Dow 34230.34 +97.31 (0.29%)
Nasdaq 13582.46 -51.08 (-0.37%)
SP 500 4167.59 +2.93 (0.07%)
10-yr Note +2/32 1.577

NYSE Adv 1726 Dec 1537 Vol 928.8 mln
Nasdaq Adv 1863 Dec 2278 Vol 4.5 bln


Industry Watch
Strong: Energy, Materials, Financials

Weak: Utilities, Real Estate, Consumer Discretionary, Communication Services, Information Technology


Moving the Market
-- Dow closes at record high in mixed session that favored value and cyclical stocks

-- Technology/growth stocks were unable to sustain early efforts to buy the dip

-- Decent economic data on services sector activity and private-sector hiring activity

-- Treasury Secretary Yellen and other Fed speakers downplayed sustained inflation pressures, with Ms. Yellen walking back on prior interest rate comments





Dow closes at record high in another rotation day
05-May-21 16:20 ET

Dow +97.31 at 34230.34, Nasdaq -51.08 at 13582.46, S&P +2.93 at 4167.59
[BRIEFING.COM] The S&P 500 increased 0.1% on Wednesday in a mixed session that favored the value and cyclical stocks. The Dow Jones Industrial Average (+0.3%) outperformed for the third straight day and set fresh record highs, while the Nasdaq Composite decreased 0.4% after starting with a 0.9% gain. The Russell 2000 lost 0.3%.

The energy (+3.3%), materials (+1.3%), and financials (+0.9%) sectors represented the cyclical leadership, partially due to rotational factors since oil prices ($65.63/bbl, -0.07, -0.1%) and Treasury yields were muted today. Decent economic data on services sector activity and the labor market likely fueled the reopening narrative, though.

Conversely, the information technology (-0.2%), consumer discretionary (-0.4%), and communication services (-0.3%) sectors exerted the influential weakness after a half-hearted rebound bid to start the day. The lightly-weighted utilities (-1.7%) and real estate (-1.5%) sectors were the weakest performers.

Like the Nasdaq, the information technology sector was up as much as 1.0% intraday after falling about 2% yesterday. The inability to sustain a buy-the-dip effort, however, was viewed as an indicator of tiredness and wasn't conducive for risk sentiment.

Despite the disappointing price action in the growth-stock oriented sectors, overall price action remained consistent with consolidation activity. In other words, the index moves were benign with a lot of churn happening at the sector and individual stock levels.

Specifying today's economic data, the ISM Non-Manufacturing Index decreased to 62.7% in April (Briefing.com consensus 65.0%) from 63.7% in March. The ADP Employment Change report for April showed 742,000 jobs were added to private-sector payrolls (Briefing.com consensus 810,000). While they missed expectations, the reports still depicted healthy activity in the services sector and on the hiring front.

Separately, Treasury Secretary Yellen, Chicago Fed President Evans (FOMC voter), and Fed Vice Chair Clarida (FOMC voter) all downplayed sustained inflation pressures. Ms. Yellen also clarified prior comments on interest rates, saying she wasn't predicting, nor recommending, the Fed to hike rates in response to government stimulus proposals.

In the Treasury market, the 2-yr yield decreased one basis point to 0.15%, and the 10-yr yield decreased one basis point to 1.58%. The U.S. Dollar Index was little changed at 91.27.

Reviewing Wednesday's economic data:

The ISM Non-Manufacturing Index decreased to 62.7% in April (Briefing.com consensus 65.0%) from 63.7% in March. The dividing line between expansion and contraction is 50.0%. The April reading marks the eleventh straight month of growth for the services sector and follows a record high reading for March.
The key takeaway from the report is the understanding that services sector activity is still running at a fast pace, as business activity slowed only modestly from the record pace logged in March.
The ADP Employment Change report estimated that 742,000 jobs were added to private-sector payrolls in April (Briefing.com consensus 810,000) following an upwardly revised 565,000 increase (from 517,000) in March. This was the largest increase since September 2020.
The IHS Markit Services PMI for April was revised higher to 64.7% from 63.7% in the preliminary reading.
The weekly MBA Mortgage Applications Index decreased 0.9% following a 2.5% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and preliminary Productivity and Unit Labor Costs for the first quarter on Thursday.

Russell 2000 +13.5% YTD
Dow Jones Industrial Average +11.8% YTD
S&P 500 +11.0% YTD
Nasdaq Composite +5.4% YTD



Biden administration to support waiver for COVID-19 patent protections
05-May-21 15:30 ET

Dow +95.57 at 34228.60, Nasdaq -65.16 at 13568.38, S&P +1.65 at 4166.31
[BRIEFING.COM] The S&P 500 is up just 0.1%, while the Nasdaq dips lower by 0.4%.

Shares of Moderna (MRNA 162.50, -10.82, -6.4%), Pfizer (PFE 39.60, -0.35, -0.9%), and other COVID-19 vaccine makers are trading lower amid news that the Biden administration will support a waiver of patent protections for COVID-19 vaccines, according to CNBC. It was previously reported that the USTR would have talks with the WTO about this waiver.

WTI crude futures settled lower by 0.1%, or $0.07, to $65.63/bbl.