Market Summary
from Briefing.comIndustry Watch
Strong: Consumer Discretionary, Financials, Utilities
Weak: Energy, Health Care, Technology, Telecom Services
Market Moving Factors
- Sliding crude pressures energy sector and weighs on overall risk tolerance
- Better than expected earnings from Apple (AAPL) and others
- FOMC policy directive reiterates intent to remain patient
Dow +225.48
at 17416.85,
Nasdaq +45.41
at 4683.41,
S&P +19.09
at 2021.25
[BRIEFING.COM] The stock market endured a volatile session on Thursday, but a steady rebound off morning lows helped the major averages register their first gain in three days. The Dow Jones Industrial Average paced the advance (+1.3%) while the S&P 500 (+1.0%) reclaimed its 100-day moving average (2,010).
Equities faced some selling pressure at the start amid continued weakness in crude oil. The energy component set a fresh January low in the $43.60/bbl area, but was able to charge back to unchanged by the pit close. That rebound improved the overall risk tolerance and helped the S&P 500 find support just a point above its January low (1988.12). Dip buyers entered the picture about 90 minutes after the start of the session, which helped all ten sectors rebound off their lows.
The materials space (+1.4%) finished in the lead thanks to better than expected earnings from Dow Chemical (DOW 45.02, +1.99). The stock spiked 4.6% and gave a boost to its peers. Meanwhile, the other commodity-related sector—energy (+0.2%)—was the weakest performer.
Elsewhere, the discretionary sector (+1.3%) outperformed throughout the session after several major components reported earnings. Homebuilders surged after PulteGroup (PHM 21.82, +1.24) and Ryland Group (RYL 39.62, +2.95) reported better than expected results with iShares Dow Jones US Home Construction ETF (ITB 25.86, +0.83) spiking 3.3%. Heavily-weighted Ford (F 14.85, +0.39) and McDonald's (MCD 93.27, +4.49) also rallied after the former beat estimates while the latter announced the retirement of its Chief Executive Officer. The broad strength within the sector overshadowed an 8.8% loss in the shares of Alibaba (BABA 89.81, -8.64) after the company missed revenue expectations.
Similarly, the industrial sector (+1.2%) outperformed while technology (+1.1%) overtook the broader market into the close. Top-weighted names like Apple (AAPL 118.90, +3.59), IBM (IBM 155.48, +3.93), and Microsoft (MSFT 42.01, +0.82) jumped between 2.0% and 3.1%, which helped overshadow a 10.3% decline in Qualcomm (QCOM 63.69, -7.30) brought on by disappointing guidance for the fiscal year.
When the dust settled, four of six cyclical sectors ended ahead of the S&P 500 while the utilities sector (+1.3%) represented the only outperformer on the countercyclical side.
Treasuries spent the day in a steady retreat with the 10-yr yield climbing four basis points to 1.76%.
Today's participation was a bit above average as 843 million shares changed hands at the NYSE floor.
Economic data was limited to jobless claims and pending home sales:
- The initial claims level dropped to 265,000 for the week ending January 24 from an upwardly revised 308,000 (from 307,000) while the Briefing.com consensus expected a decline to 301,000
- Not only did the drop break three consecutive weeks above 300,000, but the initial claims level fell to its lowest level since April 2000 o As it has for the past several months, the Department of Labor reported that there were no special factors impacting the report
- The continuing claims level declined to 2.385 million from an upwardly revised 2.456 million (from 2.443 million) while the consensus expected a drop to 2.429 million
- Pending home sales for December fell 3.7% while the Briefing.com consensus expected an increase of 0.6%
- Nasdaq Composite -1.1% YTD
- Russell 2000 -1.1% YTD
- S&P 500 -1.8% YTD
- Dow Jones Industrial Average -2.3% YTD
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Economic Data
from Briefing.com
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 29 | 08:30 | Initial Claims | 01/24 | 265K | 315K | 301K | 308K | 307K |
| Jan 29 | 08:30 | Continuing Claims | 01/17 | 2385K | 2450K | 2429K | 2456K | 2443K |
| Jan 29 | 10:00 | Pending Home Sales | Dec | -3.7% | 0.6% | 0.6% | 0.6% | 0.8% |
| Jan 29 | 10:30 | Natural Gas Inventories | 01/24 | -94 bcf | NA | NA | -216 bcf |
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Technical Update
DOW
NASDAQ
S&P500
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Market Internal
NYSE :Higher than average volume @ 863M vs 821.168M
Advancers outpaced Decliners(adv/dec): 2096M/1000M
New highs outpaced low(high/low): 211/145
NASDAQ :
Higher than average volume @ 1993M vs 1762.07M
Advancers outpaced Decliners(adv/dec): 1820M/929M
New lows outpaced highs(high/low): 41/115
Advancers outpaced Decliners by 2.03 to 1 on higher volumes 2856 (+10.56%) than avg 2583 (+0.31%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Treasuries Take a Breather:- Following the release of the FOMC directive on Wednesday, Treasuries rallied sharply. On Thursday there wasn't any follow through. Yields moved up across the curve on modest selling efforts.
- 2-yr yield +1 bp to 0.50%
- 5-yr yield +3 bps to 1.27%
- 7-yr yield +2 bps to 1.55%
- 10-yr yield +3 bps to 1.75%
- 30-yr bond +2 bps to 2.31%
- Factors contributing to the price pullback included:
- A notable bounce in Greek stock and bond markets that cut back on the safe-haven trade
- Strong initial claims data out of the U.S.
- Filings fell to 265,000 for the week ending January 24 (Briefing.com consensus 301,000) from 308,000 the week before. That is the lowest initial claims reading since April 2000.
- Tepid demand at the $35 bln 5-yr note and $29 bln 7-yr note auction
- 5-yr note auction drew a high yield of 1.288% on a 2.49 bid-to-cover ratio that trailed the prior 12-auction average of 2.72. Solid demand from indirect bidders, though, which had 63.1% of accepted competitive bids (prior 12-auction average was 51.4%)
- 7-r note auction drew a high yield of 1.59% on a 2.50 bid-to-cover ratio that was just shy of the prior 12-auction average of 2.56.
- A broad-based rally effort in the stock market
- S&P 500, down 0.7% at its morning low, reversed course and was up 0.9% as of this post
- 2-10-yr spread widened to 125 bps from 122 bps at Wednesday's settlement
- Some notable resilience in the oil market today
- WTI crude futures traded below $44.00/bbl, but found support and jumped 0.2% to $44.55/bbl
- The turn oil prices helped drive the S&P 500 rally effort. The S&P 500 energy sector, down 2.0% at its lows of the morning, was unchanged as of this post
- U.S. Dollar Index +0.3% to 94.77, bolstered by weaker yen
- Precious metals hit hard
- Gold -2.3% to $1257.40/troy oz.
- Silver -6.6% to $16.91/troy oz.
- Friday's data: Advance estimate for Q4 GDP (Briefing.com consensus 3.2%; prior 5.0%) [08:30 ET]; Q4 Employment Cost Index (Briefing.com consensus 0.5%; prior 0.7%) [08:30]; Chicago PMI (Briefing.com consensus 58.0; prior 58.3) [09:45]; Final January reading for University of Michigan Consumer Sentiment (Briefing.com consensus 98.2; prior 98.2) [09:55]
Currencies
Commodities
Rebound in oil prices has helped the stock market:- WTI crude prices were down 1.0% and trading below $44.00/bbl just a short time ago but are now up 0.3% at $44.60/bbl
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Preview: Friday, 30 Jan 2015
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Jan 30 | 08:30 | GDP-Adv. | Q4 | 3.2% | 3.2% | 5.0% | ||
| Jan 30 | 08:30 | Chain Deflator-Adv. | Q4 | 1.0% | 1.0% | 1.4% | ||
| Jan 30 | 08:30 | Employment Cost Index | Q4 | 0.3% | 0.5% | 0.7% | ||
| Jan 30 | 09:45 | Chicago PMI | Jan | 57.5 | 58.0 | 58.3 | ||
| Jan 30 | 09:55 | Michigan Sentiment - Final | Jan | 97.5 | 98.2 | 98.2 |
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