Sector Investing

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Market Snapshot

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

Dow 34416.99 +102.32 (0.30%)
Nasdaq 14501.92 +68.08 (0.47%)
SP 500 4363.55 +17.83 (0.41%)
10-yr Note +1/32 1.515
NYSE Adv 1468 Dec 1681 Vol 882.8 mln
Nasdaq Adv 1622 Dec 2600 Vol 4.4 bln

Industry Watch
Strong: Utilities, Consumer Staples, Real Estate
Weak: Energy, Materials, Health Care

Moving the Market

-- Large-cap indices turn positive after Senate Minority Leader McConnell offers Democrats a debt-ceiling concession

-- Treasury yields and energy prices declined

-- ADP Employment Change report for September was better than expected

Large-cap indices recoup early losses and close higher
06-Oct-21 16:15 ET
Dow +102.32 at 34416.99, Nasdaq +68.08 at 14501.92, S&P +17.83 at 4363.55

[BRIEFING.COM] The S&P 500 gained 0.4% on Wednesday, overcoming an early 1.3% decline, as the market turned positive following news of a potential concession on the debt ceiling. The Nasdaq Composite (+0.5%) and Dow Jones Industrial Average (+0.3%) also recouped early losses to close higher, while the Russell 2000 fell 0.6%.

The weak start was driven by an inclination to sell into strength (in this case, Tuesday's gains) amid ongoing issues surrounding supply chain disruptions, raw material shortages/inflation, infrastructure, and the debt ceiling.

There was some relief on the latter after Senate Minority Leader McConnell offered Democrats the option to use normal procedures to pass an emergency debt ceiling extension at a fixed dollar amount into December 2021. In other words, lawmakers could potentially kick the can down the road.

Soon after, it was reported that President Biden and Chinese President Xi will hold an online virtual summit by the end of the year. The positive-sounding headlines were viewed as a good excuse to buy the dip, although the extent of the gains was relatively muted since stocks had already come off session lows before the news.

Nevertheless, eight of the 11 S&P 500 sectors closed higher after each traded lower in the morning. The defensive-oriented utilities (+1.5%), consumer staples (+1.0%), and real estate (+1.0%) sectors led the rebound effort with decent gains. The energy (-1.1%), materials (-0.3%), and health care (-0.2%) sectors closed lower.

Growth stocks generally outperformed value stocks, as the 10-yr yield settled lower by one basis point to 1.52% after peaking at 1.57% overnight. The retracement in yields came despite a better-than-expected ADP Employment Change report, which estimated private sector payrolls increased by 568,000 in September (Briefing.com consensus 405,000).

Energy prices also did some backpedaling, which might have indirectly influenced the downside move in rates. WTI crude futures fell 1.9%, or $1.47, to $77.50/bbl. Natural gas futures fell 8.5% to $5.73/MMBtu. The U.S. Dollar Index increased 0.3% to 94.21.

Crude futures were pressured by an unexpected build in weekly crude inventories (2.346 mln) and a report from the Financial Times that the U.S. may release fuel from strategic reserves to counter rising oil prices.

Reviewing Wednesday's economic data:

ADP estimated that private sector payrolls increased by 568,000 in September (Briefing.com consensus 405,000) after increasing by a downwardly revised 340,000 (from 374,000) in August.
The weekly MBA Mortgage Applications Index fell 6.9% following a 1.1% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and Consumer Credit for August on Thursday.

S&P 500 +16.2% YTD
Dow Jones Industrial Average +12.5% YTD
Nasdaq Composite +12.5% YTD
Russell 2000 +12.2% YTD

Crude futures settle lower
06-Oct-21 15:30 ET
Dow +33.29 at 34347.96, Nasdaq +34.71 at 14468.55, S&P +7.42 at 4353.14

[BRIEFING.COM] The S&P 500 (+0.2%), Dow (+0.1%), and Nasdaq (+0.3%) are each trading with modest gains.

One last look at the sector performances shows eight sectors now trading higher, led by utilities (+1.1%) with a gain over 1.0%. Conversely, the energy (-1.0%), materials (-0.6%), and health care (-0.5%) sectors trade lower.

WTI crude futures settled lower by 1.9%, or $1.47, to $77.50/bbl.