The stock market ended Thursday on a firmly higher note with the Nasdaq (+1.9%) finishing ahead of the S&P 500 (+1.4%) and Dow (+1.0%).
Equities followed yesterday’s weak finish with an opening advance and a daylong extension of the early gains. The S&P 500 clawed back above its 200-day moving average (4476), which has been in focus since Friday, while the Nasdaq continued this week’s outperformance.
Nasdaq faced some pressure in early trade, but it took the lead in midday action with chipmakers fueling afternoon gains in the tech-heavy index. The PHLX Semiconductor Index jumped 5.1% with all but one of its component gaining at least 2.0% while NVIDIA ( NVDA 281.50, +25.16, +9.8%) and Intel ( INTC 51.62, +3.35, +6.9%) finished in the lead. NVIDIA rallied to its best level in ten weeks while Intel overtook its 50-day moving average (48.75), approaching its 200-day moving average (52.04).
The technology sector (+2.7%) was the only group with a gain of more than 2.0% while the materials sector (+2.0%) finished just behind after outperforming throughout the day. Steelmaker Nucor ( NUE 153.52, +6.38, +4.3%) and fertilizer producers Mosaic ( MOS 68.57, +0.64, +0.9%) and CF Industries ( CF 106.40, +2.81, +2.7%) hit fresh 52-week highs as concerns about supply and rising prices persisted.
Crude oil, meanwhile, was a soft spot today, but not before it touched its best level in almost two weeks in overnight trade. It finished today’s session with a loss of $4.02, or 3.5%, at $111.24/bbl. However, the energy sector (+0.1%) was able to eke out a slim gain, extending this week’s advance to 5.0%.
The consumer discretionary sector (+0.7%) finished near the bottom of today’s leaderboard as modest losses in influential components like Home Depot ( HD 315.78, -1.27, -0.4%) and Lowe’s ( LOW 219.17, -1.75, -0.8%) overshadowed gains in most remaining components. HD and LOW retreated after KB Home ( KBH 34.38, -1.65, -4.6%) missed Q1 expectations, but reaffirmed its guidance for FY22 revenue.
Elsewhere in the discretionary sector, travel names finished among the leaders with Booking.com ( BKNG 2261.99, +102.24, +4.7%) ending in the top spot after Trip.com ( TCOM 24.50, +0.48, +2.0%) beat Q4 expectations.
Treasuries slumped out of the gate but rebounded as the day went on. The 30-yr bond turned positive in the afternoon, sending its yield lower by a basis point to 2.51% while the 10-yr note finished with a modest loss, lifting its yield by two basis points to 2.34%.
On the international front, an Axios reporter tweeted that he has been told by the chief of staff to Ukraine’s president that some progress has been made in cease-fire negotiations.
Reviewing today’s economic data:
- Initial jobless claims for the week ending March 19 decreased by 28,000 to 187,000 (Briefing.com consensus 210,000), which is the lowest level since September 6, 1969. Continuing jobless claims for the week ending March 12 decreased by 67,000 to 1.350 million, which is the lowest level since January 3, 1970.
- The key takeaway from the report is that it is consistent with a tight labor market; however, the multi-decade low in initial and continuing claims is going to feed into concerns about a pickup in wage-based inflation pressures that might compel the Fed to take a more aggressive approach in removing its policy accommodation.
- Durable goods orders for February declined 2.2% month-over-month (Briefing.com consensus -0.5%) after increasing 1.6% in January. Excluding transportation, durable goods orders fell 0.6% month-over-month (Briefing.com consensus +0.5%) after increasing 0.8% in January.
- The key takeaway from the report is that the weakness follows on the heels of a solid January report despite the effects of the Omicron variant. The downturn likely reflects some natural slowing, meaning it is too early to tell if this is the start of a weaker trend.
- The IHS Markit Manufacturing PMI increased to 58.5 in the preliminary reading for March from February’s final reading of 57.3.
- The IHS Markit Services PMI increased to 58.9 in the preliminary reading for March from February’s final reading of 56.5.
- The Current Account deficit narrowed to $217.90 bln in Q4 from a revised deficit of $219.90 bln (from -$214.80 bln) in Q3.
February Pending Home Sales (Briefing.com consensus 1.2%; prior -5.7%) and the final reading of the Michigan Consumer Sentiment survey for March (Briefing.com consensus 59.7; prior 59.7) will be released tomorrow at 10:00 ET.
- Dow Jones Industrial Average -4.5% YTD
- S&P 500 -5.2% YTD
- Russell 2000 -7.6% YTD
- Nasdaq Composite -9.3% YTD
Overseas:
- Europe: DAX -0.1%, FTSE +0.1%, CAC -0.4%
- Asia: Nikkei +0.3%, Hang Seng -0.9%, Shanghai -0.6%
Commodities:
- Crude Oil -4.02@ 111.24
- Nat Gas +0.17 @ 5.45
- Gold +27.50 @ 1963.80
- Silver +0.68 @ 25.84
- Copper -0.06 @ 4.72