Wall Street gets a lift from the energy stocks
13-Jun-19 16:15 ET
Dow +101.94 at 26106.77, Nasdaq +44.41 at 7837.11, S&P +11.80 at 2891.64
[BRIEFING.COM] The S&P 500 advanced 0.4% on Thursday, lifted by shares of energy companies as oil prices rose after two oil tankers were attacked off the coast of Iran. A swarm of buyers in the last few minutes of action boosted the benchmark index from near session lows to close out the session on a high note.
The Dow Jones Industrial Average increased 0.4%, the Nasdaq Composite increased 0.6%, and the Russell 2000 increased 1.1%.
Secretary of State Mike Pompeo blamed Iran for the attack, fueling geopolitical angst between the countries but also providing relief in the price of oil ($52.37/bbl, +$1.21, +2.4%). Oil prices fell over 4% yesterday on concerns about demand and oversupply.
The higher oil prices underpinned the leadership in the S&P 500 energy sector (+1.3%). The communication services sector (+1.1%) received a boost from shares of Walt Disney (DIS 141.74, +6.02, +4.4%) after its price target was raised to $160 from $125 at Morgan Stanley. The consumer discretionary sector (+0.9%) also outperformed.
The defensive-oriented sectors -- health care (-0.1%), consumer staples (+0.1%), real estate (+0.1%), and utilities (+0.2%) -- trailed the pack after outperforming the broader market on Wednesday.
From a broader perspective, the stock market has traded sideways over the last four sessions as it waits for further policy guidance from the Fed and for any updates on the U.S.-China trade front. On a related note, China's Vice Premier Liu He called for more stimulus measures to support the Chinese economy.
In corporate news, activist investor group JANA Partners disclosed a 9.5% stake in Callaway Golf (ELY 18.19, +2.29, +14.4%). MoffettNathanson lowered its price target for Twitter (TWTR 36.34, -1.15, -3.1%) to $25 from $28 and maintained its Sell rating. RH (RH 109.91, +15.02, +15.8%) pleased investors with solid quarterly results and guidance.
Demand for U.S. Treasuries persisted amid high expectations for the Fed to cut rates, and Treasuries advanced to session highs during Mr. Pompeo's press conference. The 2-yr yield declined seven basis points to 1.82%, and the 10-yr yield declined four basis points to 2.09%. The U.S. Dollar Index increased 0.1% to 97.06.
Reviewing Thursday's economic data, which included the weekly Initial and Continuing Claims report and Import and Export Prices for May:
Looking ahead, investors will receive the following reports on Friday: Retail Sales for May, Industrial Production and Capacity Utilization for May, the preliminary University of Michigan Index of Consumer Sentiment for June, and Business Inventories for April.
- Initial claims for the week ending June 8 hit 222,000 (Briefing.com consensus 220,000), up 3,000 from the prior week's revised level of 219,000 (revised from 218,000). Continuing claims for the week ending June 1 increased by 2,000 to 1.695 mln from the previous week's revised level of 1.693 mln (revised from 1.682 mln).
- The key takeaway from the report is that unemployment claims continue pointing to a tight labor market.
- Import prices decreased 0.3% m/m in May after increasing a revised 0.1% (from 0.2%) in April. Excluding fuel, import prices were also down 0.3%. Export prices decreased 0.2% in May after increasing a revised 0.1% (from 0.2%) in April while export prices, excluding agriculture, were also down 0.2% after growing a revised 0.2% (from 0.4%) in April.
- The key takeaway from the report is that the decline in import prices should keep inflation measures at subdued levels.
- Nasdaq Composite +18.1% YTD
- S&P 500 +15.4% YTD
- Russell 2000 +13.9% YTD
- Dow Jones Industrial Average +11.9% YTD