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End of Day Brief - Tuesday Nov 23 - Markets mixed

Dow35813.80+194.55(0.55%)
Nasdaq15775.15-79.62(-0.50%)
SP 5004690.70+7.76(0.17%)
10-yr Note -3/321.666
NYSEAdv 1543 Dec 1797 Vol 896.0 mln
NasdaqAdv 1919 Dec 2627 Vol 5.3 bln


Industry Watch

Strong: Energy, Financials, Real Estate, Consumer Staples
Weak: Information Technology, Communication Services, Consumer Discretionary


Moving the Market

-- Second day of rotation out of growth into value

-- U.S. plans to release 50 million barrels of oil from Strategic Petroleum Reserve in concert with other countries, including China and the UK

-- Energy stocks lead the way amid higher oil prices

-- Interest rates edge higher


Value stocks lift the Dow and S&P 500

Dow +194.55 at 35813.80, Nasdaq -79.62 at 15775.15, S&P +7.76 at 4690.70

[BRIEFING.COM] The S&P 500 increased 0.2% on Tuesday, overcoming an early 0.7% decline, as investors continued to rotate out of growth stocks into value stocks. The Dow Jones Industrial Average rose 0.5%, while the Nasdaq Composite (-0.5%) and Russell 2000 (-0.2%) closed lower but off session lows.

The underperformance of the small-cap Russell 2000 indicated the rotation was predominately in the large-caps. The S&P 500 energy (+3.0%), financials (+1.6%), and real estate (+1.1%) sectors rose between 1-3%, while the information technology (-0.2%), consumer discretionary (-0.6%), and communication services (-0.4%) sectors closed lower.

Growth stocks were pressured by another increase in long-term interest rates and by a disappointing earnings reaction in Zoom Video ($ZM 206.64, -35.64, -14.7%), which fell nearly 15.0%. The Russell 1000 Growth Index declined 0.4% (-1.7% in two days), versus a 0.6% gain in the Russell 1000 Value Index (+1.1% in two days).

The 10-yr yield increased four basis points to 1.67% (+13 bps in two days), and the 2-yr yield also increased four basis points to 0.61% after flirting with 0.66% intraday. The U.S. Dollar Index fell 0.1% to 96.48.

Higher oil prices ($78.38, +1.61, +2.1%) provided the fuel for the energy stocks after the U.S. announced plans to release 50 million barrels of oil from the Strategic Petroleum Reserve over several months. China, India, Japan, South Korea, and the UK are also expected to tap into their oil reserves.

WTI crude futures initially fell on the news, but quickly rebounded on the recognition that Bloomberg reported yesterday that the U.S. was planning to announce this today and that OPEC+ warned it could reconsider output increases as a response. Oil prices were also down 10% since Nov. 10, further signaling the news was already priced in.

In other earnings news, Best Buy ($BBY 121.01, -16.99, -12.3%), Dick's Sporting Goods ($DKS 134.55, -5.73, -4.1%), Urban Outfitters ($URBN 33.80, -3.47, -9.3%), and Abercrombie & Fitch ($ANF 41.12, -5.92, -12.6%) also posted sizable losses despite beating EPS estimates.

Dollar Tree ($DLTR 144.71, +12.15, +9.2%) and Burlington Stores ($BURL 285.55, +22.55, +8.6%) were earnings outliers.


Reviewing Tuesday's economic data:

  • The preliminary IHS Markit Manufacturing PMI for November increased to 59.1 from 58.4 in October. The preliminary IHS Markit Services PMI for November decreased to 57.0 from 58.7 in October.

Looking ahead, investors will receive a huge batch of economic data on Wednesday, including weekly Initial Claims, Personal Income and Spending for October, New Home Sales for October, and the final University of Michigan Index of Consumer Sentiment for November.

  • S&P 500 +24.9% YTD
  • Nasdaq Composite +22.4% YTD
  • Russell 2000 +17.9% YTD
  • Dow Jones Industrial Average +17.0% YTD

Source: (Briefing.com)

Disclosure: I may trade in the ticker symbols mentioned, both long or short. My articles represent my personal opinion and analysis and should not be taken as investment advice. Readers should do their own research before making decisions to buy or sell securities. Trading and investing include risks, including loss of principal.

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