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End of Day Brief - Tuesday Dec 7 - Markets up, Nasdaq jumps

Dow35719.43+492.40(1.40%)
Nasdaq15686.91+461.76(3.03%)
SP 5004686.75+95.08(2.07%)
10-yr Note -10/321.480
NYSEAdv 2590 Dec 690 Vol 1.02 bln
NasdaqAdv 3433 Dec 1121 Vol 5.00 bln


Industry Watch

Strong: Technology, Financials, Energy, Consumer Discretionary
Weak: Consumer Staples, Utilities


Moving the Market

Stocks extend Monday's rebound

Crude oil nearing last week's high


Recovery Rally Accelerates Higher

Dow +492.40 at 35719.43, Nasdaq +461.76 at 15686.91, S&P +95.08 at 4686.75

[BRIEFING.COM] The major averages built on their gains from Monday with the S&P 500 (+2.1%) jumping to within 60 points of its record high from two weeks ago. The Nasdaq (+3.0%) outperformed after lagging yesterday while the Dow (+1.4%) finished behind the benchmark index after showing relative strength on Monday.

The bulk of the Tuesday rally unfolded at the open, as stocks jumped out of the gate after an upbeat session in global equity markets. The S&P 500 reached its best level of the session just after 11:00 ET, drifting just below that high into the close. The benchmark index finished at its best level since November 24 while the Dow and Nasdaq reclaimed their respective 50-day moving averages.

All eleven sectors ended in the green with nine groups recording gains of 1.0% or more. Top-weighted technology (+3.5%) held the lead throughout the day while energy (+2.3%) and consumer discretionary (+2.4%) finished in the next two spots.

The technology sector rallied behind chipmakers, as the PHLX Semiconductor Index rose 5.0%. Top component NVIDIA ($NVDA 324.27, +23.90, +8.0%) was the best performer in the group while Intel ($INTC 52.57, +1.58, +3.1%) rallied back above its 50-day moving average (51.33) after confirming plans for a spin-off of its Mobileye unit, which is valued at about $50 bln.

All but six components of the tech sector finished in the green while Western Union ($WU 17.35, -0.50, -2.8%) was the weakest performer, giving back yesterday's gain.

Like technology, the energy sector spent the session near the top of the leaderboard thanks to a rally in crude oil, which rose $2.36, or 3.4%, to $71.95/BBL, climbing past its 200-day moving average (69.98). Oil backpedaled from its midday high after a brief push past last Monday's high (72.93).

The consumer discretionary sector was the only other group to gain 2.0% or more with leadership from AutoZone ($AZO 2023.57, +143.58, +7.6%) after the company beat Q1 expectations. The stock rallied to a fresh record, as did seven other components of the discretionary sector.

The Dow Jones Transportation Average (+0.2%) was one of few soft spots today as airline stocks pulled back from yesterday's rally, masking gains in more than half of the remaining DJTA components.

In Washington, House Speaker Pelosi said that her chamber will vote today evening on a plan to increase the debt limit. Meanwhile, Senate Minority Leader McConnell said that a "solution" to the debt ceiling issue has been reached. President Biden spoke with Russian President Putin, warning that the U.S. and allies would "respond with strong economic and other measures in the event of military escalation" in Ukraine, according to a statement from the White House.

Treasuries retreated, sending the 10-yr yield higher by five basis points to 1.48% with its 200-day moving average (1.493%) looming just above.


Reviewing today's economic data:

  • The October Trade Balance Report showed a narrowing in the deficit to $67.1 billion (Briefing.com consensus -$66.8 billion) from a downwardly revised $81.4 billion (from $80.9 billion) in September, with exports up $16.8 billion and imports up $2.5 billion from September levels.
    • The key takeaway from the report is the uptick in both exports and imports, which is a good sign of increased economic activity on a global basis. Exports to China increased $2.8 billion and exports to the European Union increased $1.6 billion.
  • The revised Q3 Productivity and Unit Labor Costs report showed productivity being revised down to -5.2% (Briefing.com consensus -4.9%) from the advance estimate of -5.0%. That is the largest decline in productivity since the second quarter of 1960. Unit labor costs were revised up to 9.6% (Briefing.com consensus 8.2%) from 8.3%.
    • The key takeaway from the report is the connection between weakening productivity and rising costs, which isn't a good combination for company profits.
  • Consumer credit increased by $16.9 bln in October after increasing a downwardly revised $27.8 bln (from $29.9 bln) in September.

Tomorrow, the weekly MBA Mortgage Index (prior -7.2%) will be released at 7:00 ET, followed by JOLTS -- Job Openings (prior 10.438 mln) at 10:00 ET.

  • S&P 500 +24.8% YTD
  • Nasdaq Composite +21.7% YTD
  • Dow Jones Industrial Average +16.7% YTD
  • Russell 2000 +14.1% 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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