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Market Snapshot

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

Dow 34575.31 +45.86 (0.13%)
Nasdaq 13736.50 -12.26 (-0.09%)
SP 500 4202.04 -2.07 (-0.05%)
10-yr Note -3/32 1.614
NYSE Adv 2422 Dec 924 Vol 1.0 bln
Nasdaq Adv 2767 Dec 1512 Vol 4.1 bln

Industry Watch
Strong: Energy, Real Estate, Financials, Industrials, Materials
Weak: Health Care, Information Technology, Utilities, Consumer Staples

Moving the Market

-- Large-cap indices fade strong start and close little changed

-- Cyclical stocks outperformed in reopening trade, supported by better-than-expected manufacturing data

-- Oil prices rise and long-term interest rates ticked higher

Large-cap indices fade positive start and close little changed
01-Jun-21 16:15 ET
Dow +45.86 at 34575.31, Nasdaq -12.26 at 13736.50, S&P -2.07 at 4202.04

[BRIEFING.COM] The S&P 500 declined 0.1% on Tuesday after starting with a 0.7% gain and finding resistance at its all-time highs from last month. The Dow Jones Industrial Average (+0.1%) and Nasdaq Composite (-0.1%) also closed little changed and off early highs, while the Russell 2000 rose 1.1%.

The strong start was fueled by first-of-the-month inflows and a news cycle that fed into the reopening optimism: better-than-expected manufacturing PMIs for May out of the U.S. and Europe, the OECD boosting its global growth forecasts for 2021 and 2022, OPEC+ commenting on strong oil demand, and reports highlighting solid activity in airports and movie theaters over the weekend.

The S&P 500 energy sector (+3.9%) stood atop the sector leaderboard with a 4% gain, further supported by higher oil prices ($67.79/bbl, +1.47, +2.2%) and a decision from OPEC+ to gradually ease current supply cuts.

The real estate (+1.7%), materials (+1.4%), financials (+0.7%), and industrials (+0.4%) sectors also closed higher. Boeing (BA 254.73, +7.71, +3.1%) underpinned the move in the industrials sector after the stock was upgraded to Outperform from Market Perform at Cowen.

Conversely, the health care sector (-1.6%) underperformed with a 1.6% decline, yet it was the information technology sector (-0.4%) that exerted the influential weakness. The health care sector was pressured by weakness in Abbott Labs (ABT 105.79, -10.86, -9.3%), which dropped 9% after lowering its FY21 guidance due to a rapid decline in COVID-19 testing demand.

Tech stocks, and growth stocks in general, struggled amid an uptick in long-term interest rates, which corroborated the reopening theme. The 10-yr yield increased three basis points to 1.62% while the 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index decreased 0.2% to 89.89.

In other corporate news, AMC Entertainment (AMC 32.04, +5.92, +22.7%) remained a heavily-traded stock and rose 23% after the company raised $230.5 million in cash by selling shares to Mudrick Capital Management. Cloudera (CLDR 15.93, +3.07, +23.7%) agreed to be acquired by Clayton, Dubilier & Rice and KKR for $16.00 per share, or $5.3 billion, in cash.

Reviewing Tuesday's economic data:

The ISM Manufacturing Index for May moved up to 61.2% (Briefing.com consensus 61.0%) from 60.7% in April. A number above 50.0% connotes an expansion in manufacturing activity. May marked the twelfth straight month of expansion.
The key takeaway from the report is the finding that companies and suppliers continue to struggle to meet increasing levels of demand. That's a good harbinger for manufacturers, yet it also suggests inflation pressure will persist.
Total construction spending increased 0.2% m/m in April (Briefing.com consensus 0.5%) following an upwardly revised 1.0% increase (from 0.2%) in March. Total private construction rose 0.4% m/m while total public construction spending decreased 0.6%.
The key takeaway from the report is the ongoing strength in private residential construction spending, which is a byproduct of strong demand driven by a scarce supply of existing homes for sale.
The final IHS Market Manufacturing PMI for April checked in at 62.1%, up from 61.5% in the preliminary reading.

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the Fed's Beige Book for June on Wednesday.

Russell 2000 +16.2% YTD
Dow Jones Industrial Average +13.0% YTD
S&P 500 +11.9% YTD
Nasdaq Composite +6.6% YTD

Crude futures settle close to $68 per barrel
01-Jun-21 15:30 ET
Dow +54.15 at 34583.60, Nasdaq +8.16 at 13756.92, S&P +1.25 at 4205.36

[BRIEFING.COM] The S&P 500 is relatively unchanged and trading a few points above the 4200 level, which has been a level the S&P 500 has flirted with over the past week.

One last look at the S&P 500 sectors shows energy (+3.6%), real estate (+1.6%), materials (+1.5%), and financials (+0.7%) in the lead with decent gains, while the health care sector (-1.5%) remains firmly at the bottom of the pack with a 1.5% decline.

WTI crude futures settled higher by 2.2%, or $1.47, to $67.79/bbl. On a related note, OPEC+ agreed to gradually increase the output of oil in June and July.