By Chris Matthews and William Watts, MarketWatch
Apple rolls out new iPhones, iPad and Watch
U.S. stocks closed at session highs Tuesday as a rally in
energy, industrials and materials stocks overshadowed a selloff in
momentum-driven technology shares, helping the Dow extend its win
streak to five sessions and the S&P 500 index avoid consecutive
declines after trading in the red for most of the session.
Apple Inc. (AAPL) was in the spotlight as it announced new model
iPhones and other products at its annual launch event Tuesday
afternoon.
How did the major benchmarks fare?
The Dow Jones Industrial Average rose 73.92 points, or 0.3%, to
26,909.43, while the S&P 500 index added 0.96 point, or less
than 0.1%, to 2,979.39. The Nasdaq Composite index retreated 3.28
points, or less than 0.1%, to 8,084.15
At session lows, the Dow fell 118.46 points, or 0.4%, the
S&P 500 lost 21.42 points, or 0.7% and the Nasdaq was down
85.75 points, or 1.1%.
What drove the market?
Investors eyed a potential rotation in market leadership from
defensive names and fast-growing tech stocks into cyclical sectors,
including energy, industrials and materials, all of which have
posted gains Tuesday, in contrast with the S&P 500.
"The big story is the continuing rotation that we saw begin a
couple days ago," Willie Delwiche, market strategist with R.W.
Baird told MarketWatch. "If we can actually move away from narrow,
defensive leadership into cyclical and small-cap leadership, that
would be a healthy development for the market."
Defensive sectors, including real estate, utilities and consumer
staples weighed on the major indexes Tuesday while small
capitalization stocks, as measured by the Russell 2000 , posted
gains. The share of stocks advancing versus declining on the New
York Stock Exchange came in at nearly 3-to-2, a potentially bullish
signal going forward, Delwiche said.
Read more: Energy, financial stocks soar: Oversold bounce or the
beginning of a break out?
(http://www.marketwatch.com/story/energy-financial-stocks-soar-oversold-bounce-or-the-beginning-of-a-break-out-2019-09-10)
Information technology shares were also under pressure Tuesday,
down 0.5%, one day after the attorneys general of 50 U.S. states
announced an investigation into Google's 'potential monopolistic
behavior'
(http://www.marketwatch.com/story/google-to-be-investigated-for-possible-antitrust-violations-2019-09-09)
on Monday, underscoring regulatory concerns surrounding large tech
firms.
Shares of Facebook Inc. (FB), Amazon.com Inc. (AMZN), Netflix
Inc. (NFLX) all lost ground Tuesday amid a broader sell off
momentum-driven growth stocks, as indicated by the 1.6% decline in
the iShares Edge MSCI USA Momentum Factor exchange-traded fund
(MTUM) .
"The risk is that we get half-way through this rotation, stall
out and are left with no momentum anywhere," Delwiche said.
Meanwhile, concerns about the U.S.-China trade battle appear to
have moved to the back burner for investors after being blamed for
volatile market action in August.
China has reportedly offered to buy more American agricultural
products in exchange for a delay in upcoming tariffs and the easing
of a ban against doing business with Chinese telecommunications
giant Huawei Technologies, according to the South China Morning
Post
(https://www.scmp.com/news/china/diplomacy/article/3026585/countdown-trade-war-talks-china-ready-sweeten-deal-buying).
The report comes on the heels of comments by U.S. Treasury
Secretary Steven Mnuchin, who told Fox Business Network Monday that
he views renewed discussions with Beijing as a sign of good
faith.
"The U.S. and China are due to meet next month, and according to
Steven Mnuchin...the U.S. is prepared to do a deal, as long as it
is good for the U.S.," said David Madden, market analyst at CMC
Markets UK, in a note. "The lack of hostilities between the U.S.
and China is likely to keep stocks in their upward move.
The European Central Bank is expected to deliver additional
monetary stimulus when its policy makers meet Thursday, though some
officials have appeared to push back
(https://www.wsj.com/articles/mario-draghis-plan-for-final-jolt-of-stimulus-runs-into-opposition-11568107800?mod=hp_lead_pos3)
against expectations for an aggressive package of measures
combining further interest-rate cuts with a new bond-buying
program.
Read: The ECB's challenge: Pushing rates further into negative
territory without wrecking eurozone banks
(http://www.marketwatch.com/story/the-ecbs-challenge-pushing-rates-further-into-negative-territory-without-wrecking-eurozone-banks-2019-09-10)
The U.S. National Federation of Independent Business on Tuesday
said its small-business optimism index fell 1.6 points to a
seasonally adjusted 103.1 in August
(http://www.marketwatch.com/story/nfib-small-business-optimism-index-falls-in-august-to-a-five-month-low-2019-09-10),
its worst showing since March.
The rate at which Americans quit their jobs hit an all-time high
in July, the Labor Department estimated
(http://www.marketwatch.com/story/job-openings-dip-in-july-as-demand-for-workers-slows-but-high-quit-rate-shows-labor-market-still-strong-2019-09-10)
Tuesday, suggesting that workers are confident in the strength of
the job market. Job openings fell slightly during the month, while
layoffs remained at low levels.
Which stocks were in focus?
Investors were watching shares of Apple(AAPL) after it held its
annual fall roll-out event, where it introduced a new TV streaming
service that will cost $4.99 a month and be free for a year to
purchasers of new iPhone, iPad or Mac products. It also introduced
a new video game service and a suite of new smartphones: the iPhone
11, iPhone 11 Pro and the iPhone 11 Max. Apple shares rose
1.2%.
See:Apple iPhone launch event -- 5 things to watch for
(http://www.marketwatch.com/story/apple-iphone-launch-event-5-things-to-watch-for-2019-09-06)
Shares of Ford Motor Co.(F) fell 1.3% Tuesday. Credit rating
agency Moody's Investors Service late Monday downgraded the auto
maker's debt rating
(http://www.marketwatch.com/story/fords-debt-rating-gets-downgraded-to-junk-by-moodys-2019-09-09)
to Ba1, the first rung of "junk," or non-investment speculative
grade, from Baa3, citing "considerable operating and market
challenges" and predicted "weak earnings and cash generation likely
as the company pursues a lengthy and costly restructuring plan."
S&P Global Ratings and Fitch Ratings have a BBB rating on Ford,
which is two steps above junk, though have a negative outlook. As
long as the company has two ratings above junk, it is eligible to
stay in the biggest investment-grade bond indexes.
Shares of HD Supply Holdings Inc.(HDS) lost 4.2% after the
industrial distribution company reported a fiscal second-quarter
profit that topped expectations but sales that missed
(http://www.marketwatch.com/story/hd-supplys-stock-set-to-fall-after-profit-beat-but-sales-outlook-disappoint-2019-09-10),
while also providing a downbeat outlook for the current
quarter.
Shares in fast food retailer Wendy's Co. (WEN) fell 10.2% after
announcing a $20 million plan to serve breakfast nationwide
(http://www.marketwatch.com/story/wendys-jumping-back-into-breakfast-armed-with-bacon-strength-2019-09-10)
from 2020.
How did other markets trade?
Stocks traded mixed in Asia overnight Monday, with the China CSI
300 falling 0.3%, Hong Kong's Hang Seng index nearly unchanged and
Japan's Nikkei 225 rising 0.4%. In Europe, closed mostly higher,
with the Stoxx Europe advancing 0.1%
The yield on the 10-year U.S. Treasury note jumped sharply by
9.5 basis points Tuesday to 1.716% with both the 10-year and
30-year yields hitting one month highs
(http://www.marketwatch.com/story/treasury-yields-inch-higher-ahead-of-sizable-debt-sale-2019-09-10).
In commodities markets, the price of crude oil fell 0.5% to
$57.55 after bearish EIA forecasts and ahead of an OPEC meeting on
Thursday
(http://www.marketwatch.com/story/oil-aims-for-5-day-win-streak-on-optimism-over-production-curbs-2019-09-10).
(http://www.marketwatch.com/story/oil-aims-for-5-day-win-streak-on-optimism-over-production-curbs-2019-09-10)
The price of gold fell 1% to about $1,496.10 an ounce. The U.S.
dollar , meanwhile, rose 0.1% against a basket of its peers.
(END) Dow Jones Newswires
September 10, 2019 16:23 ET (20:23 GMT)
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