Day Traders Diary
The S&P 500 lost 0.1% on Tuesday in a session that saw little conviction from buyers or sellers. Encouraging economic data and solid earnings reports from Target (TGT 76.00, +3.33, +4.6%) and Kohl's (KSS 71.33, +4.86, +7.3%) provided some support for the market.
The Dow Jones Industrial Average lost 0.1%, and the Nasdaq Composite finished flat. The Russell 2000, meanwhile, underperformed with a loss of 0.5%.
The S&P 500 industrials (-0.6%) and materials (-0.3%) sectors underperformed the broader market. Conversely, the communication services (+0.7%), real estate (+0.3%), and consumer discretionary (+0.2%) sectors were the lone groups to finish with gains.
Stocks opened roughly flat amid lingering concerns about the U.S. striking, and enforcing, a meaningful trade deal with China. On a related note, China lowered its 2019 GDP growth forecast to 6.0%-6.5% from 6.5%, and announced some tax cuts in a bid to contend with a "tough economic battle ahead."
The S&P 500 dropped 0.4% in early action but selling efforts were tempered following the release of the stronger-than-expected New Home Sales report for December and the ISM Non-Manufacturing Index for February.
The more recent ISM Non-Manufacturing Index, which included a sizable increase for the New Orders component, helped dampen the recession narrative that has picked up amid a mixed slate of economic data.
At the same time, better-than-expected earnings results and guidance from Target and Kohl's helped keep investors at ease. Their solid results helped spur gains in the SPDR S&P Retail ETF (XRT 45.65, +0.37, +0.8%) and the S&P 500 consumer discretionary sector (+0.2%).
General Electric (GE 9.89, -0.49) for its part lost 4.7% after CEO Larry Culp said the company's industrial free cash flow will be negative in 2019.
There was also some M&A speculation within the insurance industry. Aon (AON 157.25, -13.38, -7.8%) confirmed it is in the early stages of considering an all-share business combination with Willis Towers Watson (WLTW 182.04, +8.99, +5.2%).
The U.S. Treasury market was relatively muted on Tuesday. The 2-yr yield increased one basis point to 2.55%, and the 10-yr yield was unchanged at 2.72%. The U.S. Dollar Index increased 0.2% to 96.84. WTI crude was unchanged at $56.54/bbl.
Reviewing Tuesday's economic data, which included the ISM Non-Manufacturing Index for February, New Home Sales for December, and the Treasury Budget for January:
Looking ahead, investors will receive the ADP Employment Change for February, the weekly MBA Mortgage Applications Index, the Trade Balance Report for December, and the Fed's Beige Book for March on Wednesday.
Headlines provided by Briefing.com