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End of Day Brief - Monday Oct 18 - Markets mixed, large caps good

SP 5004486.46+15.09(0.34%)
10-yr Note -23/321.587
NYSEAdv 1566 Dec 1669 Vol 779.0 mln
NasdaqAdv 2003 Dec 2432 Vol 4.1 bln

Industry Watch

Strong: Information Technology, Consumer Discretionary, Communication Services
Weak: Utilities, Health Care, Consumer Staples, Materials

Moving the Market

-- Resilient price action, and strength in the mega-caps

-- Oil prices and interest rates backed down from prior highs

-- Walt Disney ($DIS) dragged Dow lower after receiving an analyst downgrade

Large-caps lift S&P 500 to a fourth straight gain

Dow -36.15 at 35258.61, Nasdaq +124.47 at 15021.80, S&P +15.09 at 4486.46

[BRIEFING.COM] The S&P 500 increased 0.3% on Monday, overcoming an early 0.5% decline for its fourth straight gain. The mega-caps did the heavy lifting and drove the outperformance of the Nasdaq Composite (+0.8%). The Dow Jones Industrial Average (-0.1%) and Russell 2000 (+0.1%) finished closer to their flat lines, with the Dow in the red.

Seven of the 11 S&P 500 sectors closed higher, led by the heavily-weighted consumer discretionary (+1.2%), information technology (+0.9%), and communication services (+0.7%) sectors. Conversely, the utilities (-0.7%), health care (-0.7%), consumer staples (-0.5%), and materials (-0.1%) sectors closed lower.

The negative start was attributed to softer-than-expected data out of China (Q3 GDP, industrial production, and fixed asset management), a 1.3% m/m decline in U.S. industrial production for September ( consensus +0.2%), and higher interest rates as oil prices broke above $83.00/BBL.

The stock market quickly recouped losses, though, as oil prices and Treasury yields backpedaled from early highs on no specific news. WTI crude futures settled higher by just 0.2%, or $0.18, to $82.44/BBL. The 10-yr yield settled higher by one basis point to 1.58% after flirting with 1.63% intraday.

The retracement in yields was a supportive factor for the growth stocks, especially the mega-caps, which padded gains in the afternoon while the broader market tracked sideways. The Vanguard Mega Cap Growth ETF ($MGK 246.21, +2.51) rose 1.0%, while the Invesco S&P 500 Equal Weight ETF ($RSP 155.76, +0.06, +0.04%) closed little changed.

Apple ($AAPL 146.55, +1.71, +1.2%) seemed to provide an additional boost in the mega-cap trade after unveiling a new MacBook Pro, the third generation of AirPods, and a new subscription tier for Apple Music. AAPL shares rose 1.2% after being up 0.3% right before its product event.

Walt Disney (DIS 171.17, -5.29, -3.0%), however, was an individual drag on the Dow after the stock was downgraded to Equal Weight from Overweight at Barclays. The firm expressed caution in the company achieving its long-term streaming subscription guidance. Disney shares fell 3.0%.

The 2-yr yield increased two basis points to 0.42%. The U.S. Dollar Index was little changed at 93.96.

Reviewing Monday's economic data:

  • Total industrial production decreased 1.3% in September ( consensus +0.2%) following a downwardly revised 0.1% decline in August (from +0.4%). The capacity utilization rate dropped to 75.2% ( consensus 76.5%) from a downwardly revised 76.2% in August (from 76.4%).
    • The key takeaway from the report is that industrial production was weak in September due to the effects of Hurricane Ida and the ongoing semiconductor supply shortage.
  • The NAHB Housing Market Index increased to 80 in October ( consensus 75) from 76 in September.

Looking ahead, investors will receive Housing Starts and Building Permits for September on Tuesday.

  • S&P 500 +19.5% YTD
  • Nasdaq Composite +16.6% YTD
  • Dow Jones Industrial Average +15.2% YTD
  • Russell 2000 +14.8% 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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