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Market Snapshot

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

Dow 34577.04 -23.34 (-0.07%)
Nasdaq 13614.53 -141.82 (-1.03%)
SP 500 4192.85 -15.27 (-0.36%)
10-yr Note -11/32 1.625
NYSE Adv 1403 Dec 1840 Vol 1.04 bln
Nasdaq Adv 1779 Dec 2322 Vol 5.32 bln

Industry Watch
Strong: Financials, Health Care, Energy
Weak: Technology, Consumer Discretionary, Communication Services, Materials

Moving the Market

Stocks retreat alongside weak showing from European markets

Biden administration negotiating infrastructure proposal with Republicans

Growth Stocks Weigh on Thursday
03-Jun-21 16:15 ET
Dow -23.34 at 34577.04, Nasdaq -141.82 at 13614.53, S&P -15.27 at 4192.85

[BRIEFING.COM] The stock market ended Thursday on a lower note, though the S&P 500 (-0.4%) was able to reclaim the bulk of its opening loss. The Dow (-0.1%) outperformed throughout the day while the Nasdaq (-1.0%) finished behind the broader market.

Equities started the day in negative territory after a shaky overnight session but the S&P 500 was able to find support near last week's low shortly after the open. The bounce, which took place against the backdrop of upbeat economic data, had the index back near its opening level about an hour after the open, but the market found resistance after approaching yesterday's closing level.

Reports of the Biden administration's changing tone on corporate taxation helped the S&P 500 accelerate its morning bounce. The administration is reportedly open to implementing a minimum rate of 15% instead of raising the top corporate rate to 28% from 21%, but daylong weakness in heavily-weighted sectors like technology (-0.9%), consumer discretionary (-1.2%) and communication services (-0.7%) prevented the benchmark index from turning positive.

The technology sector lagged throughout the day as some of its top components sputtered. Apple (AAPL 123.54, -1.52, -1.2%), Microsoft (MSFT 245.71, -1.59, -0.6%), MasterCard (MA 361.82, -5.03, -1.4%), and PayPal (PYPL 257.79, -4.38, -1.7%) kept the sector under pressure while chipmakers also struggled, sending the PHLX Semiconductor Index lower by 1.8%.

Technology was able to erase a portion of its loss and climb out of the basement of today's leaderboard while the discretionary sector fell to the bottom in the early afternoon. That slide was largely due to a stumble in Tesla (TSLA 572.84, -32.28, -5.3%), which fell to its lowest level in two weeks after The Information reported that the company's May orders in China were down 50% m/m.

On the upside, health care (+0.4%) and financials (+0.2%) outperformed throughout the day, as did lightly-weighted sectors like consumer staples (+0.5%), energy (+0.3%), and utilities (+0.5%). The energy sector padded this week's gain to 6.1% even though crude oil ended the day flat at $68.81/bbl. The flat finish was pretty good for the dollar-denominated commodity since the U.S. Dollar Index rose 0.6% to 90.48, reaching its best level since mid-May.

Continued speculative action in AMC (AMC 51.34, -11.21, -17.9%) had the stock revisiting its opening level from Wednesday during morning trade, followed by a charge into positive territory in the afternoon. The stock finished in the red while Bed Bath & Beyond (BBBY 31.90, -12.29, -27.8%) also reversed after yesterday's surge.

In airlines, Delta Air Lines (DAL 46.13, -1.64, -3.4%) raised the lower end of its Q2 revenue guidance, American Airlines (AAL 24.93, -0.89, -3.5%) reaffirmed its capacity and revenue guidance for Q2, while United Airlines (UAL 57.73, -2.56, -4.3%) announced a contract to purchase 15 supersonic jets that are expected to enter service by the end of the decade.

Treasuries ended the day in the red with the 10-yr yield rising three basis points to finish a tenth of a basis point below its 50-day moving average (1.626%).

Reviewing today's data:

Initial claims for the week ending May 29 decreased by 20,000 to 385,000 (Briefing.com consensus 395,000). Continuing claims for the week ending May 22 increased by 169,000 to 3.771 million.
The key takeaway from the report is the recognition that initial jobless claims fell below 400,000 for the first time since March 2020; however, the elevated level of continuing claims is apt to continue to drive the belief that enhanced unemployment benefits are acting as a disincentive to find new work.
The ADP Employment Change report pointed to the addition of 978,000 private-sector payrolls in May (Briefing.com consensus 675,000) after a downwardly revised increase of 654,000 (from 742,000) in April.
The ISM Non-Manufacturing Index for May increased to 64.0% (Briefing.com consensus 63.0%) from 62.7% in April. The dividing line between expansion and contraction is 50.0%. The May reading marks the twelfth straight month of growth for the services sector and is a record high for this series.
The key takeaway from the report is the understanding that services sector activity is still running at a fast pace -- a record pace -- on recovery activity that has also been accompanied by higher prices.
The Final IHS Markit Services PMI for May increased to 70.4 from 70.1 in the preliminary reading.
Q1 Productivity was unrevised at 5.4% (Briefing.com consensus 5.5%). Q1 unit labor costs, though, were revised to +1.7% (Briefing.com consensus -0.4%) from -0.3% given a 2.1-percentage point upward revision to hourly compensation.
The key takeaway from the report is the upward revision to unit labor costs and the worries it might stir about potential profit margin pressures in coming quarters should wage inflation accelerate further.

May Nonfarm Payrolls (Briefing.com consensus 720,000; prior 266,000), Nonfarm Private Payrolls (Briefing.com consensus 650,000; prior 218,000), Average Hourly Earnings (Briefing.com consensus 0.2%; prior 0.7%), Unemployment Rate (Briefing.com consensus 5.9%; prior 6.1%), and Average Workweek (Briefing.com consensus 34.9; prior 35.0) will be reported tomorrow at 8:30 ET, followed by April Factory Orders (Briefing.com consensus 0.5%; prior 1.1%) at 10:00 ET.

Russell 2000 +15.4% YTD
Dow Jones Industrial Average +13.0% YTD
S&P 500 +11.6% YTD
Nasdaq Composite +5.6% YTD

Crude Oil Ends Flat
03-Jun-21 15:25 ET
Dow -0.66 at 34599.72, Nasdaq -129.39 at 13626.96, S&P -13.24 at 4194.88

[BRIEFING.COM] The S&P 500 remains lower by 0.3% with 30 minutes left in today's session.

The market has spent the past hour in a narrow range after backing down from its intraday high, but the last few minutes of action always bring the potential for some closing volatility.

Six sectors continue trading lower while the utilities sector (+0.8%) remains ahead of energy (+0.4%). Crude oil, meanwhile, ended today's pit session essentially unchanged. WTI crude dipped $0.02 to $68.81/bbl after setting a fresh high for the year at $69.40/bbl. The flat finish could be seen as a sign of strength since the U.S. Dollar Index has climbed 0.7% to 90.50, reaching its best level since mid-May.