MARKET SNAPSHOT: Stock Market Struggles To Extend Win Streak As Tech Weakness Offsets Bank Rally
June 07 2018 - 11:42AM
Dow Jones News
By Sara Sjolin, MarketWatch , Ryan Vlastelica
Nasdaq and Russell 2000 are coming off records
U.S. stocks struggled for direction on Thursday, with major
indexes paring an early advance and the Nasdaq down sharply as
major technology stocks sold off and offset an uptrend in banking
stocks.
What are markets doing?
The Dow Jones Industrial Average rose 80 points, or 0.3%, to
25,277. The S&P 500 was up 2 points at 2,774, a gain of 0.1%.
The Nasdaq Composite Index sank 37 points to 7,652, a decline of
0.5%. At the open, the Nasdaq inched slightly higher, notching an
all-time intraday record. Both the S&P and the Nasdaq are
coming off four straight daily gains.
What is driving the market?
The biggest declining sector of the day by far was technology,
which had an outsize impact on the Nasdaq, which is heavily
weighted toward the industry. Among notable decliners, Facebook
Inc. (FB) fell 2.2%, Microsoft Corp. (MSFT) was down 1.3%,
Google-parent Alphabet Inc. (GOOGL) lost 1.8%, and Intel Corp.
(INTC) was down 1.8%. Many of these stocks have recently traded at
records.
The tech weakness was offset by financials, with banks among the
biggest advancers. Financial-services shares also outperformed on
Wednesday as bond yields climbed after European Central Bank
officials suggested they are ready to reveal more about their plans
for exiting an aggressive quantitative-easing program at their
meeting next week.
The market is now pricing in an about 90% chance of a rate rise
in July 2019
(https://www.reuters.com/article/us-eurozone-money-markets/money-markets-almost-fully-pricing-in-ecb-rate-hike-by-july-2019-idUSKCN1J20WK),
compared with last week, when a hike in October 2019 was considered
the most likely outcome, according to Reuters.
Treasury yields continued slightly higher on Thursday with the
10-year benchmark rate up 1.4 basis points at 2.988%, according to
FactSet.
Yields rise as bond prices fall, and climbing rates are
generally bullish for banks' business models.
Goldman Sachs Group Inc.(GS) rose 1.5%, Citigroup Inc.(C)
climbed 1%, JPMorgan Chase & Co.(JPM) added 0.8% and Wells
Fargo & Co.(WFC) put on 0.6%. The Financial Select Sector SPDR
Fund (XLF) rose 0.6%.
What are strategists saying?
"At the moment, the U.S. economy seems to be doing pretty well,
but valuations may already largely reflect that, and valuations are
above average. We need more earnings growth to keep pushing share
prices higher, and we need to watch the economy itself to see
whether it can deliver that kind of growth," said John Carey,
portfolio manager at Amundi + Pioneer Investments.
Don't miss:London Stock Exchange's glitch--just the latest
high-profile outage to rile traders
(http://www.marketwatch.com/story/london-stock-exchanges-glitch-just-the-latest-high-profile-outage-to-rile-traders-2018-06-07)
Stock movers
Five Below Inc.(FIVE) jumped 21% after the discount retailer
late Wednesday reported earnings that beat forecasts
(http://www.marketwatch.com/story/five-below-shares-rise-after-earnings-beat-strong-guidance-2018-06-06).
Johnson & Johnson(JNJ) rose 0.2% after Fortive Corp.(FTV)
said late Wednesday it agreed to buy Johnson & Johnson's
Advanced Sterilization Products business for $2.7 billion
(http://www.marketwatch.com/story/fortive-to-acquire-johnson-johnson-sterilization-business-for-27-billion-2018-06-06).
Fortive shares rose 3.4%.
Twitter Inc.(TWTR) slipped 2.4% after saying late Wednesday it
plans to sell at least $1 billion in convertible bonds
(https://www.wsj.com/articles/twitter-plans-to-sell-1-billion-in-convertible-debt-1528326076).
Furniture retailer Conn's Inc.(CONN) jumped 17% after reporting
earnings that topped forecasts
(http://www.marketwatch.com/story/conns-shares-soar-18-premarket-after-earnings-beat-2018-06-07).
General Electric Co.(GE) introduced a new company
(http://www.marketwatch.com/story/ge-unveils-new-airxos-company-to-manage-unmanned-vehicle-traffic-2018-06-07),
AiRXOS, which will integrate air and ground space to help manage
traffic for unmanned vehicles. GE rose 0.1%, but remains down 3.2%
thus far this week.
What's on the economic calendar?
Initial jobless claims fell slightly in early June
(http://www.marketwatch.com/story/jobless-claims-edge-lower-to-222000-in-early-june-2018-06-07),
keeping the rate of layoffs in the U.S. near a 50-year low.
Household debt numbers for the first quarter are expected at
noon Eastern and consumer credit for April are slated for 3
p.m.
There are no Federal Reserve speakers as the central bank is in
its blackout period ahead of its meeting next week.
(END) Dow Jones Newswires
June 07, 2018 11:27 ET (15:27 GMT)
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