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Market Snapshot

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

Dow 31261.92 +8.77 (0.03%)
Nasdaq 11354.61 -33.88 (-0.30%)
SP 500 3901.37 +0.57 (0.01%)
10-yr Note +5/32 2.789
NYSE Adv 1436 Dec 1644 Vol 1.19 bln
Nasdaq Adv 1991 Dec 2122 Vol 5.4 bln

Industry Watch
Strong: Real Estate, Health Care, Energy, Utilities, Consumer Staples
Weak: Consumer Discretionary, Industrials, Materials, Communication Services

Moving the Market

-- Market ends on a high note after S&P 500 briefly entered bear market territory

-- Ross Stores (ROST) sinks on disappointing earnings results and guidance, Deere (DE) and Applied Materials (AMAT) highlight supply chain issues

-- Underlying growth concerns

S&P 500 digs itself out of bear market territory
20-May-22 16:25 ET
Dow +8.77 at 31261.92, Nasdaq -33.88 at 11354.61, S&P +0.57 at 3901.37

[BRIEFING.COM] The S&P 500 (+0.01%) closed fractionally higher on Friday, successfully digging itself out of bear market territory from earlier in the session, which is typically defined as a 20% decline from a recent high. The Dow Jones Industrial Average (+0.03%), Nasdaq Composite (-0.3%), and Russell 2000 (-0.2%) also closed on a better note.

Early on, risk sentiment was pressured by a failed rebound effort (the S&P 500 was down 3.4% from its intraday high to its intraday low), and by growth concerns stemming from persistent inflation and supply chain issues. The early gains were largely sentiment-driven amid a belief that the market was overdue for a bounce and news that the People's Bank of China cut its 5-year prime loan rate by 15 basis points to 4.45%.

All 11 S&P 500 sectors were trading lower, but a nice rebound transpired in the last hour of action with no specific news to account for the rally. Six of the 11 S&P 500 sectors closed in positive territory, including health care (+1.3%) and real estate (+1.2%) with gains over 1.0%.

The S&P 500 consumer discretionary sector (-1.5%), however, succumbed to continued weakness in retail stocks after Ross Stores (ROST 71.87, -20.83, -22.5%) provided disappointing earnings results and guidance. Ross was the latest retailer to highlight rising cost pressures, raising concerns about slower earnings growth and the durability of the consumer in this high-cost environment.

Shares of Ross dropped 22.5%, versus a 2.2% decline for the SPDR S&P Retail ETF (XRT 61.33, -1.36, -2.2%).

Deere (DE 313.31, -51.31, -14.1%) and Applied Materials (AMAT 106.46, -4.28, -3.9%), two other cyclical companies, also struggled after highlighting supply chain issues in their earnings reports. Deere missed revenue estimates and weighed heavily on the industrials sector (-1.1%) while Applied Materials missed earnings expectations and issued downside quarterly guidance.

Some curve-flattening activity in the Treasury market and lower copper prices ($4.27/lb, -0.02, -0.5%) corroborated the underlying growth concerns. The 2-yr yield fell three basis points to 2.58%, and the 10-yr yield fell seven basis points to 2.79%. The U.S. Dollar Index increased 0.3% to 103.10. WTI crude futures settled above $110.00 per barrel ($110.05, +0.14, +0.1%).

Investors did not receive any economic data on Friday. Looking ahead, investors will receive New Home Sales for April and the preliminary IHS Markit Manufacturing and Services PMIs for May on Tuesday.

Dow Jones Industrial Average -14.0% YTD
S&P 500 -18.1% YTD
Russell 2000 -21.0% YTD
Nasdaq Composite -27.4% YTD

Sectors mostly down going into the close
20-May-22 15:30 ET
Dow -403.05 at 30850.10, Nasdaq -249.16 at 11139.33, S&P -58.38 at 3842.42

[BRIEFING.COM] Heading into the close, the S&P 500 is down by 1.6%. The Russell 2000 is down by 1.9%.

Nine out of 11 sectors are down with four sectors down by nearly 2%. The consumer discretionary (-3.0%), industrials (-2.2%), information technology (-1.7%), and communication services (-1.6%) are each suffering big losses in the last hour. Notably, Tesla (TSLA 644.21, -65.75, -9.3%) is down almost 10%.

The 10-yr Treasury yield settled lower by seven basis points to 2.79%.

Crude oil futures settled up by $0.14 (+0.1%) to $110.05/barrel.
Fed President Bullard reiterates 50 bps hike
20-May-22 14:55 ET
Dow -414.03 at 30839.12, Nasdaq -264.34 at 11124.15, S&P -60.05 at 3840.75

[BRIEFING.COM] All major indices are seeing losses today amid renewed inflationary concerns. The S&P 500 is down by 1.7%, the Nasdaq is down 2.4%, and the Dow Jones Industrial Average is down 1.4%.

The St. Louis Fed President, James Bullard (voting FOMC member), reiterated during a Fox Business interview today that the Fed will be sticking to its 50 basis point rate hike for now and that the fed funds rate should be at 3.5% by the end of the year. He also said that he does not think there will be a recession this year or next year.

His comments also mentioned that inflation is very tough on low-income people. This is being shown today by the extreme downturn that low-cost retailer Ross Stores (ROST 70.51, -22.20, -23.9%) experienced, which is down by 24% and hit a 52-week low following its earnings report.
Ross and Deere are the worst performers in S&P 500
20-May-22 14:35 ET
Dow -526.50 at 30726.65, Nasdaq -318.50 at 11069.99, S&P -80.93 at 3819.87

[BRIEFING.COM] The major indices are trading near session lows in a disappointing session. The S&P 500 is down 1.8% amid a dearth of buying interest.

An inside look at the benchmark index shows Ross Stores (ROST 70.00, -22.70, -24.5%) and Deere (DE 309.48, -54.94, -15.1%) as the two worst-performing stocks following their earnings reports.

Conversely, V.F. Corp (VFC 46.38, +1.76, +3.9%), American Tower (AMT 241.59, +8.25, +3.5%), and Eli Lilly (LLY 294.21, +7.98, +2.8%) are sporting solid gains.
Gold settles higher
20-May-22 14:05 ET
Dow -423.72 at 30829.43, Nasdaq -252.07 at 11136.42, S&P -62.84 at 3837.96

[BRIEFING.COM] The S&P 500 continues to trade in bear market territory with a 1.6% decline.

Looking at precious metals, gold futures settled higher by $0.70 (+0.04%) at $1,840.40/ozt while silver futures settled lower by $0.33 (-1.5%) at $21.62/ozt.

The U.S. Dollar Index currently trades higher by 0.4% to 103.19.