|Stock market snaps winning streak in tired session|
11-Jun-19 16:20 ET
Dow -14.17 at 26048.51, Nasdaq -0.60 at 7822.55, S&P -1.01 at 2885.72
[BRIEFING.COM] The stock market finished slightly lower on Tuesday, with declines ranging from 0.01% (Nasdaq Composite) to 0.3% (Russell 2000). The S&P 500 jumped out to a 0.8% gain out of the gate, but a lack of general buying conviction after a lengthy rally helped snap its winning streak. The S&P 500 declined 0.03%.
In a day where there were no new catalysts to meaningfully sustain another move higher, the stock market traded in a tight range after giving up its early lead. The fact that the S&P 500 was up as much as 6.1% today from its June 3 low, also contributed to some sluggishness and the lack of conviction.
Supportive considerations for the market remained expectations for the Fed to signal a rate cut (or two) at its policy meeting next week and optimism that the U.S. and China can still strike a trade deal. Some of that trade optimism could be reined in, though, if new stimulus measures announced by China on Tuesday boost its economy to a position where Beijing feels it has the upper hand in trade negotiations with the U.S.
Most of the S&P 500 sectors finished near their unchanged marks. The consumer staples (+0.4%), consumer discretionary (+0.3%), and communication services (+0.3%) sectors outperformed the broader market. Facebook (FB 178.10, +3.28) was a notable gainer, advancing 1.9% after the stock was upgraded to Buy from Neutral at MoffettNathanson.
The S&P 500 utilities (-0.7%) and industrials (-0.9%) sectors were Tuesday's laggards. The underperformance in the aerospace-and-defense stocks contributed to the weakness in the industrial sector after a Wall Street Journal report suggested Pentagon spending may slow down. The iShares Dow Jones US Aerospace & Defense ETF (ITA 205.79, -4.87) lost 2.3%
Separately, shares of Beyond Meat (BYND 126.04, -42.06) were humbled, losing 25.0% after the stock was downgraded to Neutral from Overweight at JP Morgan with a price target of $121.
U.S. Treasuries also finished the session mixed. The 2-yr yield increased three basis points to 1.93%, and the 10-yr yield finished flat at 2.14%. The U.S. Dollar Index declined 0.1% to 96.70. WTI crude increased 0.1% to $53.34/bbl.
Reviewing Tuesday's economic data, which included the Producer Price Index for May and the NFIB Small Business Optimism Index for May:
Looking ahead, investors will receive the Consumer Price Index for May, the weekly MBA Mortgage Applications Index, and the Treasury Budget for May on Wednesday.
- The Producer Price Index for final demand increased 0.1% (Briefing.com consensus +0.1%) while the index for final demand, less food and energy, increased 0.2% (Briefing.com consensus +0.2%). The expected readings left the yr/yr changes at 1.8% and 2.3%, respectively, versus 2.2% and 2.4% in April.
- The key takeaway from the report is that the moderation in producer price inflation should jump out in the market's mind as another data point validating an eventual rate cut by the Fed.
- The NFIB Small Business Optimisms Index for May increased to 105.0 from 103.5 in April.
- Nasdaq Composite +17.9% YTD
- S&P 500 +15.1% YTD
- Russell 2000 +12.7% YTD
- Dow Jones Industrial Average +11.7% YTD