The S&P 500 got its first win of the week on Thursday, adding 0.3%, as investors continued to chew on Wednesday's policy statement from the Fed. The Dow Jones Industrial Average advanced 0.2%, and the Nasdaq Composite climbed 0.7%. The small-cap Russell 2000 underperformed, closing lower by 0.1%.
Stocks climbed through the morning, pushing the S&P 500 up as much as 0.7%. However, the bullish tone died down in the afternoon as the benchmark index descended back towards its opening mark. Trading volume was somewhat lighter-than-usual; 751 million shares changed hands at the New York Stock Exchange.
FAANG names helped support Thursday's climb, with Apple (AAPL 224.95, +4.53) showing particular strength after being initiated with an 'Overweight' rating at JPMorgan Chase. Amazon (AMZN 2012.98, +38.13) also outperformed after Stifel raised its target price for the internet retail giant from $2020 to $2525 -- a new Street high. Shares of Apple added 2.1%, and shares of Amazon climbed 1.9%.
Most S&P sectors advanced on Thursday, but gains were limited. The consumer discretionary (+0.5%), information technology (+0.5%), communication services (+0.8%), and utilities (+1.0%) sectors were the top performers, while materials (-1.0%) finished at the back of the pack. The heavily-weighted financial sector (-0.3%) underperformed yet again, extending its weekly loss to 3.0%.
On the earnings front, Bed Bath & Beyond (BBBY 14.86, -3.95) plunged 21.0%, hitting its lowest level in nearly two decades, after missing earnings estimates and reporting a decline in same-store sales for a sixth consecutive quarter. Carnival (CCL 63.74, -3.24) and Conagra (CAG 32.98, -3.08) also fell after reporting earnings, losing 4.8% and 8.5%, respectively.
Looking at other markets, the greenback soared on Thursday, with the U.S. Dollar Index rising 0.8% to 94.58; U.S. Treasuries held steady, with the yield on the benchmark 10-yr Treasury note closing unchanged at 3.06%; and WTI crude futures advanced 0.8% to $72.18/bbl, closing near a two-and-a-half month high.
In Washington, political drama unfolded as Supreme Court nominee Brett Kavanaugh and his accuser, Christine Ford, who alleges that Mr. Kavanaugh sexually assaulted her back in high school, testified before the Senate Judiciary Committee. It's unclear if Republicans will move forward with Mr. Kavanaugh's confirmation.
Investors received a big batch of economic data on Friday that included Durable Goods Orders for August, the third estimate for Q2 GDP, weekly Initial Claims, advance readings for August International Trade in Goods, Retail Inventories, and Wholesale Inventories, and the Pending Home Sales report for August:
- August durable goods orders rose 4.5% (Briefing.com consensus +1.8%), and the prior month's reading was revised to -1.2% (from -1.7%). Excluding transportation, durable orders increased 0.1% (Briefing.com consensus +0.4%) to follow the prior month's unrevised reading of +0.2%.
- The key takeaway from the report is that the headline increase was driven by a jump in nondefense aircraft and parts orders while growth in other areas was shy of expectations.
- The third estimate of second quarter GDP pointed to an expansion of 4.2% (Briefing.com consensus 4.3%), unchanged from the second estimate.
- The key takeaway from the report is that it showed no change in personal spending growth (3.8%) from the second estimate.
- The latest weekly initial jobless claims count totaled 214,000, while the Briefing.com consensus expected a reading of 209,000. Today's tally was above the revised prior week count of 202,000 (from 201,000). As for continuing claims, they rose to 1.661 million from an unrevised count of 1.645 million.
- The key takeaway from the report is that even with the increase in initial and continuing claims, both series remain near their lowest levels in almost 50 years.
- The Advance report for International Trade in Goods for August showed a deficit of $75.8 billion (Briefing.com consensus -$71.0 billion). Meanwhile, the Advance report for Wholesale Inventories for August showed an increase of 0.8%, and the Advance report for Retail Inventories for August showed an increase of 0.7%.
- Pending Home Sales decreased 1.8% in August (Briefing.com consensus -0.4%). Today's reading follows a revised 0.8% decrease in July (from -0.7%).
Looking ahead, August Personal Income, Personal Spending, and PCE Prices, and the final reading of the University of Michigan Consumer Sentiment Index for September will be released on Friday morning.
- Nasdaq Composite +16.5% YTD
- Russell 2000 +10.1% YTD
- S&P 500 +9.0% YTD
- Dow Jones Industrial Average +7.0% YTD