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Market Snapshot

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

Dow 32637.21 +516.91 (1.61%)
Nasdaq 11740.64 +305.91 (2.68%)
SP 500 4057.85 +79.11 (1.99%)
10-yr Note
NYSE Adv 2729 Dec 569 Vol 1.0 bln
Nasdaq Adv 3562 Dec 1160 Vol 4.6 bln

Industry Watch
Strong: Consumer Discretionary, Industrials, Financials, Information Technology, Communication Services, Energy
Weak: Real Estate

Moving the Market

-- String of positive news from retailers

-- Oversold situation

-- Moves by fund managers at month end to boost underweight positions

-- Broad-based participation

Closing Stock Market Summary
26-May-22 16:20 ET
Dow +516.91 at 32637.21, Nasdaq +305.91 at 11740.64, S&P +79.11 at 4057.85

[BRIEFING.COM] Today was a good day for the stock market. Bulls had control of the tape from the opening bell to the closing bell, which rang with the major indices sitting near their best levels of the day.

The major indices charged ahead on bargain-hunting efforts that were sparked by reassuring earnings reports from major retailers, a hopeful eye to the end of the lockdowns in Shanghai next week, and some placating price action in NVIDIA (NVDA 178.51, +8.76, +5.2%), which finished higher after trading down as much as 10% after issuing disappointing fiscal Q2 revenue guidance.

The latter went a long way to validate assertions that a lot of bad news has already been priced into stocks and that they are ripe for a meaningful rebound effort.

Similarly, better-than-expected guidance from retailers Macy's (M 22.92, +3.71, +19.3%), Dollar General (DG 222.60, +27.26, +14.0%), Dollar Tree Stores (DLTR 162.80, +29.21, +21.9%), and Williams-Sonoma (WSM 129.70, +14.72, +12.8%), uplifting Q2 revenue guidance from Southwest Airlines (LUV 45.11, +2.66, +6.3%) and JetBlue (JBLU 10.61, +0.35, +3.4%), and an upward revision to the consumer spending component in the Q1 GDP Report also went a long way to temper concerns about the state of the consumer and incite a belief that consumer discretionary stocks have gotten deeply oversold.

Sure enough, the S&P 500 consumer discretionary sector (+4.8%) was the star today in a star-studded lineup of sector performances that also included the outperformance of the information technology (+2.5%), financial (+2.3%), and communication services (+2.1%) sectors.

Notably, those four sectors have been the worst-performing sectors this year, so their outperformance today lent credence to the view that today's rally had the markings of being a rally off deeply oversold conditions.

With today's gains, the S&P 500 reclaimed a posture above 4,000. It is now up 4.0% for the week and presumably destined to break a seven-week losing streak along with the Nasdaq Composite. The Dow Jones Industrial Average for its part is on course to break an eight-week losing streak, the likes of which hasn't been seen in nearly 100 years.

While stocks were getting their rebound groove on, Treasuries ultimately finished their session flat footed. The 10-yr note yield was up one basis point to 2.76% in front of the April Personal Income and Spending Report on Friday, which will include the Fed's preferred inflation gauge in the form of the core-PCE Price Index.

Reviewing today's economic data:

For the week ending May 21, initial claims decreased by 8,000 to 210,000 (Briefing.com consensus 210,000). Continuing claims for the week ending May 14 increased by 31,000 to 1.346 million.
The key takeaway in this report is the recognition that the four-week moving average of 1,347,500 for continuing claims is the lowest since January 17, 1970.
The second estimate for Q1 GDP was revised down to show real GDP decreasing at an annual rate of 1.5% (Briefing.com consensus -1.3%) from the advance estimate of -1.4%. The GDP Chain Deflator was revised up to 8.1% (Briefing.com consensus 8.0%) from 8.0%.
The key takeaway from this report, though, was the upward revision to consumer spending to 3.1% from 2.7%. That exceeded the consumer spending growth in the third and fourth quarters, demonstrating that the U.S. consumer was still acting as a key growth engine in the first quarter despite rising interest rates and higher costs for most goods and services, namely food and energy.
Pending home sales declined 3.9% month-over-month in April following a downwardly revised 1.6% decline (from -1.2%) in March.

Looking ahead, market participants will receive the April Personal Income and Spending Report, the April Adv. Intl. Trade in Goods, Retail Inventories, and Wholesale Inventories Report, and the final May reading for the Univ. of Michigan Index of Consumer Sentiment on Friday.

Dow Jones Industrial Average -10.0% YTD
S&P 500 -14.9% YTD
S&P 400 -12.6% YTD
Russell 2000 -18.1% YTD
Nasdaq Composite -25.0% YTD

Not much movement heading into the close
26-May-22 15:25 ET
Dow +517.63 at 32637.93, Nasdaq +270.81 at 11705.54, S&P +72.34 at 4051.08

[BRIEFING.COM] The market is still hanging around its session highs heading into the last half hour of trading.

The CBOE VIX Index is down to 27.41, as the recent sell-off has cooled down, mitigating concerns about another material downside leg in the near term.

Looking to tomorrow, the main attraction in the morning should be the April Personal Income and Spending report, which contains the Fed's preferred inflation gauge in the form of the core-PCE Price Index. Market participants are hopeful that it will show a moderation in inflation pressures. This report should have some added bearing on the performance of the Treasury market, which was little changed today.
Gains are mostly holding up
26-May-22 15:00 ET
Dow +586.22 at 32706.52, Nasdaq +325.51 at 11760.24, S&P +85.01 at 4063.75

[BRIEFING.COM] The S&P 500 (2.2%) and the Nasdaq Composite (2.9%) are both holding above 2% and flirting with their session highs. There hasn't been a lot of change in the overall market last few hours. The bulls continue to have a firm grip on things.

The one sore thumb is the S&P 500 real estate (-0.2%) sector, which is down modestly for the day but stands out as the only sector in negative territory. Conversely, strong gains are holding up in the consumer discretionary (+5.0%) and information technology (+2.6%) sectors.
Medtronic underperforms in S&P 500 following miss, downbeat guidance
26-May-22 14:30 ET
Dow +600.59 at 32720.89, Nasdaq +347.52 at 11782.25, S&P +91.69 at 4070.43

[BRIEFING.COM] The S&P 500 (+2.30%) is firmly in second place among the major averages to this point on Thursday.

S&P 500 constituents DXC Technology (DXC 34.08, +4.63, +15.72%), Norwegian Cruise Line (NCLH 15.51, +1.78, +12.96%), and Bath & Body Works (BBWI 42.57, +3.27, +8.32%) pepper the top of today's standings. DXC outperforms after yesterday's earnings, NCLH gains in part following last night's insider buy from Director R. Galbut, while BBWI advances alongside other specialty retail names like WSM, ULTA, and DKS.

Meanwhile, Minnesota-based medtech firm Medtronic (MDT 100.00, -5.54, -5.25%) is one of today's worst-performing names following this morning's Q4 miss and underwhelming earnings guidance.
Gold ends with modest gains on Thursday
26-May-22 14:00 ET
Dow +562.40 at 32682.70, Nasdaq +323.27 at 11758.00, S&P +83.34 at 4062.08

[BRIEFING.COM] With about two hours to go on the penultimate session of the week the tech-heavy Nasdaq Composite (+2.83%) holds a firm lead over its major counterparts, having moved mostly sideways in the last half hour.

Gold futures settled $1.30 higher (+0.1%) to $1,847.60/oz, aided in part by a modest retreat in the greenback.

Specifically, the U.S. Dollar Index is down approx. -0.2% to $101.89.