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Technology Stocks : Semi Equipment Analysis
SOXX 485.61+1.0%3:59 PM EDT

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From: Return to Sender5/2/2022 4:45:46 PM
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Market Snapshot

Dow 33061.50 +84.29 (0.26%)
Nasdaq 12536.01 +201.38 (1.63%)
SP 500 4155.38 +23.45 (0.57%)
10-yr Note -27/32 2.997

NYSE Adv 1319 Dec 1743 Vol 1.1 bln
Nasdaq Adv 2306 Dec 1977 Vol 4.8 bln

Industry Watch
Strong: Communication Services, Information Technology, Consumer Discretionary, Energy

Weak: Real Estate, Consumer Staples, Utilities, Health Care, Materials

Moving the Market
-- Major indices recoup intraday declines and close higher

-- 10-yr yield hits 3.00% for first time since December 2018

-- April ISM Manufacturing Index misses expectations

Major indices reclaim intraday losses and some
02-May-22 16:20 ET

Dow +84.29 at 33061.50, Nasdaq +201.38 at 12536.01, S&P +23.45 at 4155.38
[BRIEFING.COM] The S&P 500 advanced 0.6% on Monday, overcoming a late 1.7% decline, even as the 10-yr yield reached 3.00% for the first time since December 2018. The Nasdaq Composite gained 1.6%, the Russell 2000 gained 1.0%, and the Dow Jones Industrial Average gained 0.3%.

The first trading day of the month had picked up where April left off: the path of least resistance remained to the downside as investors fretted over the negative price action, rising rates, growth prospects, and the Fed's policy decision this week.

The market, however, turned it around in the last 75 minutes of action without a specific catalyst to account for the move. Sentiment might have simply gotten too bearish, or the buying opportunities might have been too good, with the S&P 500 falling to its lowest level since last May.

A bargain-hunting mindset lifted the S&P 500 information technology (+1.6%), communication services (+2.4%), and consumer discretionary (+1.4%) sectors to the top of the standings, accompanied by the high-flying energy sector (+1.4%).

The real estate (-2.6%), consumer staples (-1.3%), utilities (-1.0%), health care (-0.7%), and materials (-0.3%) sectors were the weakest performers.

The growth stocks performed fairly well despite the rise in the 10-yr yield, which did settle at 3.00% (up 11 basis points). More surprisingly, the Treasury yield curve steepened (2-yr yield rose 4 bps to 2.73%) despite relatively disappointing manufacturing data out of the U.S. and China.

Briefly, the April ISM Manufacturing Index decreased to 55.4% ( consensus 57.9%) from 57.1% in March. China's Manufacturing PMI (47.4) fell deeper into contraction territory amid the COVID-19 outbreaks. On a related note, Beijing reportedly tightened coronavirus restrictions on Sunday.

Apple (AAPL 157.96, +0.31, +0.2%) and (AMZN 2490.00, +4.37, +0.2%), however, both increased just 0.2%, tempering the 1.3% gain in the Vanguard Mega Cap Growth ETF (MGK 206.88, +2.59, +1.3%). Recall, both stocks sold off following their earnings reports last week.

In related news, Apple received a notice from the European Commission of its preliminary view that the company abused its dominant position in markets for mobile wallets on iOS devices. Amazon was removed from the Best Ideas List at Wedbush.

WTI crude futures increased 0.1%, or $0.08, to $105.11/bbl. The U.S. Dollar Index increased 0.7% to 103.65.

Reviewing Monday's economic data:

  • The April ISM Manufacturing Index decreased to 55.4% ( consensus 57.9%) from 57.1% in March. A number above 50.0% is indicative of expansion. April marked the 23rd consecutive month of expansion in the manufacturing sector, although the April reading is the lowest since July 2020.
    • The key takeaway from the report is that manufacturing activity is being held back by COVID issues abroad, ongoing supply chain problems, inflation pressures, and labor constraints that have made it challenging to satisfy demand and which have also detracted from demand.
  • Total construction spending increased 0.1% month-over-month in March ( consensus 0.8%) following a 0.5% increase in February. Total private construction increased 0.2% month-over-month while total public construction decreased 0.2%. On a year-over-year basis, total construction spending was up 11.7%.
    • The key takeaway from the report is that, other than residential spending, there wasn't much strength in spending activity in either the private or public sectors.
  • The final IHS Markit Manufacturing PMI for April decreased to 59.2 from 59.7 in the preliminary reading.
Looking ahead, investors will receive Factory Orders for March and the JOLTs - Job Openings report for March on Tuesday.

  • Dow Jones Industrial Average -9.0% YTD
  • S&P 500 -12.8% YTD
  • Russell 2000 -16.1% YTD
  • Nasdaq Composite -19.9% YTD
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