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End of Day Brief - Wednesday Oct 20 - Markets up near record highs

SP 5004536.19+16.56(0.37%)
10-yr Note 0/321.638
NYSEAdv 2189 Dec 1016 Vol 738.1 mln
NasdaqAdv 2568 Dec 1862 Vol 4.1 bln

Industry Watch

Strong: Health Care, Utilities, Real Estate
Weak: Information Technology, Communication Services, Consumer Discretionary

Moving the Market

-- S&P 500 rises for sixth straight day while Dow sets all-time high

-- Earnings reports were mostly better than expected

-- Mega-caps consolidated recent gains

-- Strength in the value/counter-cyclical stocks

S&P 500 and Dow end just below record highs

Dow +152.03 at 35609.34, Nasdaq -7.41 at 15121.67, S&P +16.56 at 4536.19

[BRIEFING.COM] The S&P 500 (+0.4%) and Dow Jones Industrial Average (+0.4%) closed just below record highs on Wednesday, with the benchmark index rising for the sixth straight day and the Dow setting an intraday record high. The Nasdaq Composite (-0.1%) declined modestly, while the Russell 2000 rose 0.6%.

Value stocks saw increased buying interest following better-than-expected earnings reports from the likes of Verizon ($VZ 53.61, +1.26, +2.4%), Abbott Labs ($ABT 123.31, +3.97, +3.3%), Anthem ($ANTM 424.05, +30.30, +7.7%), and United Airlines ($UAL 45.95, -0.27, -0.6%). UAL shares closed lower, though.

The Russell 1000 Value Index advanced 0.9% with a counter-cyclical bias, which was evident in the leadership positions from the S&P 500 health care (+1.5%), utilities (+1.6%), and real estate (+1.6%) sectors.

Conversely, the heavily-weighted information technology (-0.3%), consumer discretionary (-0.2%), and communication services (-0.2%) sectors were the only sectors that closed lower, largely due to relative weakness in the mega-cap growth stocks. The Vanguard Mega Cap Growth ETF ($MGK 247.26, -0.63) fell 0.3%.

The underperformance of the mega-caps was a byproduct of some consolidation activity and relatively disappointing Q4 guidance from Netflix ($NFLX 625.14, -13.86, -2.2%) and Dutch semiconductor company ASML ($ASML 767.70, -33.26, -4.2%). Note, the MGK ETF entered the session up 6.8% since Oct. 4.

PayPal ($PYPL 258.36, -13.34, -4.9%) was another heavily-weighted laggard following reports that the company is in talks to acquire Pinterest ($PINS 62.68, +7.10, +12.8%) for $70 per share. PayPal shares fell 5%. Pinterest shares rose 13%.

Separately, the Fed's Beige Book for October harped on supply chain disruptions, labor shortages, and higher input costs affecting economic growth. On a related note, Brinker Intl. ($EAT 44.21, -4.74, -9.7%) was one of the latest companies to blame higher input costs for its downside guidance.

The Treasury market was relatively quiet amid a scarcity of economic data. The 2-yr yield decreased one basis point to 0.38%, and the 10-yr yield was unchanged at 1.64%. The U.S. Dollar Index decreased 0.1% to 93.60. WTI crude futures rose 1.5%, or $1.24, to $84.25/BBL amid an unexpected draw in weekly crude inventories (431,000).

Reviewing Wednesday's economic data:

  • The weekly MBA Mortgage Applications Index fell 6.3% following a 0.2% increase in the prior week.
  • Weekly crude oil inventories decreased by 431,000 barrels after increasing by 6.09 mln barrels during the previous week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report, Existing Home Sales for September, the Philadelphia Fed Index for October, and the Conference Board's Leading Economic Index for September on Thursday.

  • S&P 500 +20.8% YTD
  • Nasdaq Composite +17.3% YTD
  • Dow Jones Industrial Average +16.4% YTD
  • Russell 2000 +16.0% YTD

Source: (

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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