The market climbed for a fourth straight session on Tuesday, with the S&P 500 and the Dow adding 0.4% and 0.6%, respectively. The tech-heavy Nasdaq lagged, but still managed to eke out a narrow victory, and the small-cap Russell 2000 ended lower by 0.5% despite hitting a new intraday record in early trading.
10 of 11 sectors finished Tuesday in the green. Defensive groups, including consumer staples (+1.3%), utilities (+1.0%), and telecom services (+1.1%) led the charge after lagging on Monday. The energy (+0.7%) and materials (+0.8%) groups were also strong, but the heavily-weighted financial space (-0.4%) struggled following Monday's rally.
Financials' decline helped to keep the broader market in check, as did a mild performance from the top-weighted tech space (+0.2%) and losses in both transport and biotech stocks; the Dow Jones Transportation Average declined 0.3%, and the iShares Nasdaq Biotechnology ETF (IBB 116.61, -0.20) slipped 0.2%.
Biogen (BIIB 344.82, -9.18) paced the biotech retreat with a loss of 2.6% after Robert W. Baird downgraded the stock, arguing that last week's upbeat reaction to positive Alzheimer's drug data was overblown. Still, the heavily-weighted health care sector finished with a gain of 0.4%.
In earnings news, PepsiCo (PEP 112.89, +5.13) rallied 4.8%, hitting a four-month high, after reporting better-than-expected earnings for the second quarter.
Elsewhere, Treasuries finished flat to slightly lower, pushing yields a tick higher; the benchmark 10-yr yield, for instance, climbed to 2.87% from 2.86%. WTI crude futures were up more than 1.0% in early trading, but finished higher by just 0.3% at $74.12/bbl, and the CBOE Volatility Index declined 1.3% to 12.53, a three-week low.
President Trump left for Brussels on Tuesday morning for a two-day NATO summit, during which he'll likely push allies to ramp up their military spending. Mr. Trump will travel to Britain following the NATO meeting and then to Finland for a highly-anticipated meeting with Russian president Vladimir Putin.
Reviewing Tuesday's economic data, which included the Job Openings and Labor Turnover Survey for May and the NFIB Small Business Optimism Index for June:
- The May Job Openings and Labor Turnover Survey showed that job openings increased to 6.638 million from a revised 6.840 million (from 6.698 million) in April.
- The NFIB Small Business Optimism Index for June ticked down to 107.2 from 107.8 in the prior reading.
Looking ahead, investors will receive on Wednesday the June Producer Price Index, May Wholesale Inventories, and the weekly MBA Mortgage Applications Index.
- Nasdaq Composite +12.4% YTD
- Russell 2000 +10.4% YTD
- S&P 500 +4.5% YTD
- Dow Jones Industrial Average +0.8% YTD