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Market Snapshot

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

Dow 34314.67 +311.75 (0.92%)
Nasdaq 14433.84 +178.35 (1.25%)
SP 500 4345.72 +45.26 (1.05%)
10-yr Note -5/32 1.534
NYSE Adv 1852 Dec 1366 Vol 871.3 mln
Nasdaq Adv 2517 Dec 1835 Vol 4.1 bln

Industry Watch
Strong: Financials, Information Technology, Communication Services
Weak: Real Estate, Utilities

Moving the Market

-- Rebound session driven by the mega-caps

-- September ISM Non-Manufacturing Index was better than expected

-- Energy prices and Treasury yields increased, signaling growth/inflation expectations

Mega-caps propel a Turnaround Tuesday
05-Oct-21 16:20 ET
Dow +311.75 at 34314.67, Nasdaq +178.35 at 14433.84, S&P +45.26 at 4345.72

[BRIEFING.COM] The S&P 500 rose 1.1% on this Turnaround Tuesday session, as the mega-cap stocks mechanically bounced back from recent losses. The benchmark index finished right in between the Dow Jones Industrial Average (+0.9%) and Nasdaq Composite (+1.3%) in percentage terms, while the Russell 2000 increased just 0.5%.

There wasn't a specific catalyst today, but with the Nasdaq Composite entering the session down 7.5% from its all-time high on Sept. 7, there was a belief that the mega-caps/growth stocks had gotten oversold on a short-term basis. Encouragingly, investors followed through on early buying efforts, although there was some slippage into the close.

The Vanguard Mega Cap Growth ETF (MGK 235.22, +3.04) rose 1.3%, but it was still relatively broad-based effort. Nine of the 11 S&P 500 sectors closed higher, led by financials (+1.8%) with nearly a 2.0% gain, and the Invesco S&P 500 Equal Weight ETF (RSP 151.96, +1.08) rose 0.7%.

The real estate (-0.9%) and utilities (-0.2%) sectors were the only sectors that closed lower, largely due to the bump in long-term interest rates. The latter signaled growth/inflation expectations amid positive momentum in energy prices and a better-than-expected ISM Non-Manufacturing Index for September.

The 10-yr yield rose five basis points to 1.53% while the 2-yr yield increased one basis point to 0.29%. WTI crude futures settled close to $79 per barrel ($78.97, +1.28, +1.7%). Natural gas futures rose 8.6% to $6.26/MMBtu. The U.S. Dollar Index increased 0.2% to 93.98.

Specifying the ISM report, the Non-Manufacturing Index for September increased to 61.9% (Briefing.com consensus 60.0%) from 61.7% in August. This was the sixteenth straight month of growth for the services sector despite the challenging macro environment.

In other relevant news, Facebook (FB 332.96, +6.73, +2.1%) shares were minimally impacted by the whistleblower's congressional testimony. PepsiCo (PEP 151.09, +0.89, +0.6%) reported better-than-expected earnings results and raised its FY21 organic revenue growth guidance.

Reviewing Tuesday's economic data:

The ISM Non-Manufacturing Index for September increased to 61.9% (Briefing.com consensus 60.0%) from 61.7% in August. The dividing line between expansion and contraction is 50.0%. The September reading marks the sixteenth straight month of growth for the services sector.
The key takeaway from the report is the understanding that services sector activity is still running strong in spite of a broad-based industry acknowledgment that services activity is being constrained by labor shortages, logistics problems, and difficulty in obtaining supplies.
The August Trade Balance report was worse than expected. It showed a widening in the trade deficit to $73.3 billion (Briefing.com consensus $71.0 billion) from a downwardly revised $70.3 billion (from $70.1 billion) in July. The widening in the deficit was the result of imports being $3.0 billion more than exports in August.
The key takeaway from the report is that it captured the growth constraints of the semiconductor supply shortage and some of the dampening effects of the Delta variant as exports and imports of automotive vehicles and parts both decreased along with exports to China.
The final IHS Markit Services PMI increased to 54.9 in September from 54.4 in the final reading for August.

Looking ahead, investors will receive the ADP Employment Change Report for September and the weekly MBA Mortgage Applications Index on Wednesday.

S&P 500 +15.7% YTD
Russell 2000 +12.9% YTD
Dow Jones Industrial Average +12.1% YTD
Nasdaq Composite +12.0% YTD

Crude futures settle close to $79 per barrel
05-Oct-21 15:30 ET
Dow +432.92 at 34435.84, Nasdaq +215.39 at 14470.88, S&P +59.38 at 4359.84

[BRIEFING.COM] The S&P 500 is up 1.4% and has recouped all of yesterday's decline.

One last look at the sector performances shows financials (+2.1%), communication services (+2.0%), and information technology (+1.8%) still in the lead with about 2% gains, while the real estate (-0.5%) and utilities (-0.2%) sectors remain the only sectors trading lower.

WTI crude futures settled higher by 1.7%, or $1.28, to $78.97/bbl.