Market Summary
from Briefing.comIndustry Watch
Strong: Energy, Financials, Health Care, Materials
Weak: Consumer Staples, Technology, Telecom Services, Utilities
Market Moving Factors
- Greek Finance Minister met with his German counterpart, but the meeting has not produced any results
- Pfizer (PFE) acquires Hospira (HSP) for $90/share
Dow +6.62
at 17673.02,
Nasdaq -11.03
at 4716.71,
S&P -8.52
at 2041.51
[BRIEFING.COM] The stock market ended the Wednesday session on a lower note. The S&P 500 lost 0.4% after tumbling from its high to a new low during the final 30 minutes of action.
Equity indices endured some choppy waters after the S&P 500 spiked nearly 3.0% during the first two sessions of the week. The market appeared to be out of the woods by the start of the final hour, but the benchmark index plunged through its 50-day moving average after it was reported that the European Central Bank has lifted its waiver that allowed for the acceptance of Greek debt as collateral.
The announcement came with a caveat that the counterparty status of Greek banks remains unchanged and they may satisfy their liquidity needs through Emergency Liquidity Assistance. However, the news showed that the negotiations are likely to be tumultuous, which contrasted with the rosy picture painted over the last two days.
Despite the closing slide, a handful of influential sectors like consumer discretionary (+0.7%), technology (+0.1%), and consumer staples (+0.1%) were able to finish in the green.
The consumer discretionary space received solid support from carmakers and media names. General Motors (GM 35.83, +1.85) surged 5.4% after beating estimates and announcing plans to boost its dividend by 20.0% to $0.36. Meanwhile, Dow component Disney (DIS 101.28, +7.18) spiked 7.6% in reaction to above-consensus earnings and revenue.
Elsewhere among Dow members, the top-weighted listing—Visa (V 264.89, +5.10)—soared 2.0% and helped underpin the price-weighted index, which ended flat. Furthermore, the stock contributed to the relative strength of the technology sector. Other large sector components were mixed with Apple (AAPL 119.56, +0.91) and Microsoft (MSFT 41.83, +0.23) posting gains while Google (GOOGL 526.10, -7.20), IBM (IBM 156.96, -1.51), and Oracle (ORCL 42.42, -0.62) registered losses.
In turn, the tech sector provided a boost to the Nasdaq Composite (-0.2%), helping the index finish ahead of the broader market. The Nasdaq overcame another decline in the biotechnology group as the iShares Nasdaq Biotechnology ETF (IBB 312.55, -5.24) lost 1.7% and widened its week-to-date decline to 2.8%. Conversely, the health care sector (-1.4%) settled near the bottom of the leaderboard.
Health care was not the only influential group that struggled today. The energy sector (-1.6%) finished at the bottom of the leaderboard due to a daylong slide in crude oil. The energy component plunged 9.3% and surrendered the bulk of its February gain. As for the energy sector, the cyclical group trimmed its week-to-date gain to 4.2%.
Treasuries spiked during afternoon action, sending the 10-yr yield lower by three basis points to 1.76%.
Today's participation was well above average with more than a billion shares changing hands at the NYSE floor.
Economic data included ADP Employment, ISM Services, and the MBA Mortgage Index:
Equity indices endured some choppy waters after the S&P 500 spiked nearly 3.0% during the first two sessions of the week. The market appeared to be out of the woods by the start of the final hour, but the benchmark index plunged through its 50-day moving average after it was reported that the European Central Bank has lifted its waiver that allowed for the acceptance of Greek debt as collateral.
The announcement came with a caveat that the counterparty status of Greek banks remains unchanged and they may satisfy their liquidity needs through Emergency Liquidity Assistance. However, the news showed that the negotiations are likely to be tumultuous, which contrasted with the rosy picture painted over the last two days.
Despite the closing slide, a handful of influential sectors like consumer discretionary (+0.7%), technology (+0.1%), and consumer staples (+0.1%) were able to finish in the green.
The consumer discretionary space received solid support from carmakers and media names. General Motors (GM 35.83, +1.85) surged 5.4% after beating estimates and announcing plans to boost its dividend by 20.0% to $0.36. Meanwhile, Dow component Disney (DIS 101.28, +7.18) spiked 7.6% in reaction to above-consensus earnings and revenue.
Elsewhere among Dow members, the top-weighted listing—Visa (V 264.89, +5.10)—soared 2.0% and helped underpin the price-weighted index, which ended flat. Furthermore, the stock contributed to the relative strength of the technology sector. Other large sector components were mixed with Apple (AAPL 119.56, +0.91) and Microsoft (MSFT 41.83, +0.23) posting gains while Google (GOOGL 526.10, -7.20), IBM (IBM 156.96, -1.51), and Oracle (ORCL 42.42, -0.62) registered losses.
In turn, the tech sector provided a boost to the Nasdaq Composite (-0.2%), helping the index finish ahead of the broader market. The Nasdaq overcame another decline in the biotechnology group as the iShares Nasdaq Biotechnology ETF (IBB 312.55, -5.24) lost 1.7% and widened its week-to-date decline to 2.8%. Conversely, the health care sector (-1.4%) settled near the bottom of the leaderboard.
Health care was not the only influential group that struggled today. The energy sector (-1.6%) finished at the bottom of the leaderboard due to a daylong slide in crude oil. The energy component plunged 9.3% and surrendered the bulk of its February gain. As for the energy sector, the cyclical group trimmed its week-to-date gain to 4.2%.
Treasuries spiked during afternoon action, sending the 10-yr yield lower by three basis points to 1.76%.
Today's participation was well above average with more than a billion shares changing hands at the NYSE floor.
Economic data included ADP Employment, ISM Services, and the MBA Mortgage Index:
- The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 213K in January while the Briefing.com consensus expected an increase of 230K
- The December reading was revised up to 253,000 from 241,000
- The ISM Non-Manufacturing Index increased to 56.7 in January from a previously revised 56.5 (from 56.2) in December while the Briefing.com consensus expected the index to remain at 56.5
- Overall, the non-manufacturing sector remained strong in January, but future gains may be difficult as backlogs contracted for the second consecutive month, falling to 49.0 from 49.5
- Business activities in the non-manufacturing sector strengthened in January as the related index increased to 61.5 from 58.6 in December
- The weekly MBA Mortgage Index rose 1.3% to follow last week's 3.2% decline
- Nasdaq Composite -0.4% YTD
- S&P 500 -0.8% YTD
- Dow Jones Industrial Average -0.8% YTD
- Russell 2000 -1.0% YTD
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Economic Data
from Briefing.com
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Feb 04 | 07:00 | MBA Mortgage Index | 01/31 | 1.3% | NA | NA | -3.2% | |
| Feb 04 | 08:15 | ADP Employment Change | Jan | 213K | 250K | 230K | 253K | 241K |
| Feb 04 | 10:00 | ISM Services | Jan | 56.7 | 56.5 | 56.5 | 56.5 | 56.2 |
| Feb 04 | 10:30 | Crude Inventories | 01/31 | 6.333M | NA | NA | 8.874M |
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Technical Update
DOW
NASDAQ
S&P500
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Market Internal
NYSE :Higher than average volume @ 899.9M vs 843.26M
Decliners outpaced Advancers(adv/dec): 1091M/2000M
New highs outpaced low(high/low): 123/21
NASDAQ :
Higher than average volume @ 2196.5M vs 1795.182M
Decliners outpaced Advancers(adv/dec): 1063M/1684M
New highs outpaced low(high/low): 75/36
Decliners outpaced Advancers by 1.71 to 1 on higher volumes 3096.4 (+17.36%) than avg 2638 (+0.58%)
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Bonds, Currencies & Commodities
from Briefing.comBonds
Winner by Draw:
- Treasury prices were up in overnight action and then started to fall as the sun rose in Chicago. When the noon hour arrived, though, buyers returned, and what had been lost in the morning had been reclaimed by settlement time. We'll call it a draw, but ultimately a win for the Treasury market, which refused to buckle to follow-through selling efforts.
- 2-yr yield hit 0.56% but ended unchanged at 0.51%
- 5-yr yield hit 1.33% but ended unchanged at 1.29%
- 10-yr yield hit 1.83% but ended unchanged at 1.80%
- 30-yr yield hit 2.43% but ended unchanged at 2.38%
- There were a number of outside factors to consider today, which created the indigestion for a Treasury market waiting on its next big catalyst (i.e. the January Employment Situation report on Friday)
- The People's Bank of China cut its required reserve ratio (RRR) by 50 basis points to 19.50%. That was the first cut in the RRR since May 2012 and it was implemented to help support growth in China's economy.
- The cut followed an ISM Services number (51.8) that marked the slowest pace of expansion in six months
- There was some angst over headlines that German Chancellor Merkel and Greek Prime Minister Tsipras aren't exactly seeing eye-to-eye on renegotiating Greece's debt burden
- Oil prices got clobbered leading up to, and following, the latest inventory report from the Energy Information Administration (EIA), triggering market concerns that the recent rally was little more than a short squeeze
- WTI crude settled at $48.44/bbl, down 8.7%
- EIA said crude stockpiles increased by 6.33 million barrels for the week ending January 30
- The U.S. stock market had a choppy day of trading but was surging to its highs for the day as of this post
- Cleveland Fed President Mester (a non-FOMC voter) said the Fed should likely raises rates in the first half of 2015 due to underlying and sustainable strength in the economy
- Mixed data
- MBA Mortgage Applications Index +1.3% versus -3.2% in the prior week, featuring a 3% gain in the refinancing index but a 2% decline in the purchase index
- ADP Employment Change report for January showed 213,000 positions were added to private sector payrolls (Briefing.com consensus 230,000) while the prior month's number was revised up to 253,000 from 241,000
- ISM Services report for January a touch stronger than expected at 56.7 (Briefing.com consensus 56.5; prior 56.5
- The People's Bank of China cut its required reserve ratio (RRR) by 50 basis points to 19.50%. That was the first cut in the RRR since May 2012 and it was implemented to help support growth in China's economy.
- U.S. Dollar Index bounced back, up 0.4% to 93.98
- EUR/USD -0.6% to 1.1423
- USD/JPY -0.3% to 117.41
- Thursday data:
- January Challenger Job Cuts (07:30 ET)
- Initial and Continuing Claims (08:30)
- December Trade Balance (08:30)
- Q4 Productivity and Unit Labor Costs (08:30)
Currencies
DXY Recovers Some of Yesterday's Losses
Greece Sells Debt: The Dollar Index is in the midst of recovering some of yesterday's losses. The DXY tumbled into the middle of the 93 area before finding support and moving back higher. The DXY is now testing the 94 level for support. Economic data was relatively mixed/in line and is not really having an impact on trade. The ADP number was a little light but not enough to cause concern ahead of Friday's BLS numbers. The Services PMI and ISM numbers were both slightly better than expected.
Greece Sells Debt: The Dollar Index is in the midst of recovering some of yesterday's losses. The DXY tumbled into the middle of the 93 area before finding support and moving back higher. The DXY is now testing the 94 level for support. Economic data was relatively mixed/in line and is not really having an impact on trade. The ADP number was a little light but not enough to cause concern ahead of Friday's BLS numbers. The Services PMI and ISM numbers were both slightly better than expected.
- The euro has dipped back to the 1.14 area after running into resistance at 1.15. The region did see solid economic data this morning with Retail Sales outpacing expectations and PMI Services numbers generally coming in better than expected. But that has given way to technical trading. Of note, Greece held a short term T-bill auction, selling EUR 812 mln of 6-month T-bills. The yield was 2.75%, up 42 bps from prior sale and the bid/cover was 1.3x, down from 1.6x in the prior. The demand was the lowest since 2006, highlighting the worries around Greece, However the sale will allow the country to cover a $1.1 bln bill coming due on Friday. Discussions between Greek and EU officials continue today in Brussels and Germany.
- The pound has pushed above the key 1.52 support level following a better than expected Services PMI number. However the currency is in the midst of seeing a double top at 1.5250. This has been a difficult resistance level for sterling to find bids above and early indications are that will continue.
- The yen found support at 118 in an overnight test. There were rumors of the Bank of Japan naming a new dovish member to its board which may have helped provide some selling pressure. However the technical levels remained stout and held and yen continues to roll around in the 117 area. The tight consolidating pattern on the currency suggests market uncertainty on risk at the moment.
Commodities
- WTI crude oil slid lower all day and ultimately dropped 9% today (or $4.60/barrel) to $48.44/barrel
- Mar natural gas lost $0.10 to $2.66/MMBtu. Heating oil and RBOB gasoline futures fell sharply as well. Heating oil dropped 5% to $1.76/gallon and RBOB fell 8% to $1.48/gallon
- Metals posted some gains toda
- Apr gold rose $5 to $1264.60/oz while Mar silver rose $0.09 to $17.41/oz
- Mar copper rose $0.01 to $2.59/lb
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Preview: Thursday, 5 Feb 2015
Economic Data
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Feb 05 | 07:30 | Challenger Job Cuts | Jan | 17.6% | NA | NA | 6.6% | |
| Feb 05 | 08:30 | Initial Claims | 01/31 | 278K | 300K | 290K | 267K | 265K |
| Feb 05 | 08:30 | Continuing Claims | 01/24 | 2400K | 2375K | 2388K | 2394K | 2385K |
| Feb 05 | 08:30 | Trade Balance | Dec | -$46.6B | -$43.0B | -$38.0B | -$39.8B | -$39.0B |
| Feb 05 | 08:30 | Productivity-Prel | Q4 | -1.8% | -0.5% | 0.2% | 3.7% | 2.3% |
| Feb 05 | 08:30 | Unit Labor Costs | Q4 | 2.7% | 1.0% | 1.2% | -2.3% | -1.0% |
| Feb 05 | 10:30 | Natural Gas Inventories | 01/31 | -115 bcf | NA | NA | -94 bcf |
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