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Market Snapshot

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

Dow 34548.53 +318.19 (0.93%)
Nasdaq 13632.88 +50.42 (0.37%)
SP 500 4201.62 +34.03 (0.82%)
10-yr Note +1/32 1.569
NYSE Adv 1799 Dec 1444 Vol 1.0 bln
Nasdaq Adv 1687 Dec 2335 Vol 4.9 bln

Industry Watch
Strong: Financials, Consumer Staples, Information Technology
Weak: Health Care

Moving the Market

-- Blue-chips set the tone, investors bought the dip in technology

-- German Chancellor Merkel is reportedly against patent waivers for COVID-19 vaccines

-- Weakness in the high-growth story stocks

-- Weekly initial claims fell to new post-pandemic low at 498,000 (Briefing.com consensus 530,000)

Investors lean on the blue-chips and buy the dip in technology
06-May-21 16:25 ET
Dow +318.19 at 34548.53, Nasdaq +50.42 at 13632.88, S&P +34.03 at 4201.62

[BRIEFING.COM] The S&P 500 advanced 0.8% on Thursday in a comeback session, as investors gravitated toward the blue-chip stocks and bought the dip in technology. The Dow Jones Industrial Average (+0.9%) set intraday and closing record high, while the Nasdaq Composite (+0.4%) snapped a four-session losing streak with a more modest gain. The Russell 2000 finished flat.

Each of the major indices opened little changed, not reacting to the spate of earnings reports or the fact that weekly initial claims declined to a new post-pandemic low at 498,000 (Briefing.com consensus 530,000). Selling momentum, however, quickly gripped the Nasdaq and many of the high-growth story stocks that peaked in February. The Nasdaq was down 1.1% intraday.

Investors consequently assumed a defensive-oriented mindset that was manifested in the early leadership from the S&P 500 consumer staples sector (+1.3%), the blue-chips within the Dow, and a firmer Treasury market. The 10-yr yield declined two basis points to 1.56%.

Fortunately, the defensive mindset softened up following reports that German Chancellor Merkel was against patent waivers for COVID-19 vaccines, contrary to support from the USTR and interest from the European Commission President.

The information technology sector (+1.0%) benefited from a buy-the-dip mindset after being down 0.8% intraday, and 3.0% for the week, but the gains were relatively broad-based. The financials sector (+1.4%) finished atop the standings, while the health care sector (+0.1%) was interestingly the laggard with a slim gain.

Many of the high-growth story stocks remained in the gutters, though, best exemplified by the ARK Innovation ETF (ARKK 108.34, -3.21, -2.9%) closing lower by 3% and slipping further below its 200-day moving average.

In addition, Uber (UBER 46.65, -4.53, -8.9%), Twilio (TWLO 301.12, -31.60, -9.4%), Etsy (ETSY 157.68, -26.89, -14.6%), and Fastly (FSLY 42.31, +15.75, -27.1%) fell sharply following their earnings reports. PayPal (PYPL 252.02, +4.62, +1.9%), while not a Dow component, fit the blue-chip narrative with a 2% earnings-driven gain.

The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index decreased 0.4% to 90.90. WTI crude futures decreased 1.4%, or $0.94, to $64.69/bbl.

Reviewing Thursday's economic data:

Initial jobless claims for the week ending May 1 declined by 92,000 to 498,000 (Briefing.com consensus 530,000), which is the lowest level since March 14, 2020. Continuing claims for the week ending April 24 increased by 37,000 to 3.690 million.
The key takeaway from the report is the downtrend in initial claims, which is consistent with an economy that is reopening and necessitating more hiring activity.
Nonfarm business sector labor productivity increased at a 5.4% annual rate in the first quarter (Briefing.com consensus 5.0%) while unit labor costs decreased at an annual rate of 0.3% (Briefing.com consensus -1.6%).
The key takeaway from the report is the pickup in productivity and the corresponding effect of helping to hold down labor costs, which is something that will continue to feed the Fed's patience for holding its easy policy line despite clear signs of commodity cost inflation.

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

Russell 2000 +13.5% YTD
Dow Jones Industrial Average +12.9% YTD
S&P 500 +11.9% YTD
Nasdaq Composite +5.8% YTD

WTI crude futures settle lower, weigh on energy stocks
06-May-21 15:25 ET
Dow +163.13 at 34393.47, Nasdaq -45.58 at 13536.88, S&P +10.05 at 4177.64

[BRIEFING.COM] The S&P 500 is up 0.3% amid gains in eight of its 11 sectors.

One last look at the sector performances shows consumer staples (+1.0%) and financials (+0.9%) atop the leaderboard, while the health care (-0.5%), consumer discretionary (-0.3%), and energy (-0.1%) sectors trade lower.

WTI crude futures settled lower by 1.4%, or $0.94, to $64.69/bbl.