Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Friday, 03/15” will be posted around 8:30am EDT, Friday.
THE GIST (“THE WHAT”)
Taking a breather from a solid three-day rally, the S&P 500 index closed mostly flat at 2808.48, down a slight 2.44 points over the previous session’s close. The index dipped briefly during the early hours following weaker-than-expected housing data and reports that President Trump and Chinese leader XI Jinping might postpone their long-awaited trade summit until April.
Rebounding in the afternoon session on the back of strong earnings and positive corporate news, the index whipsawed between small gains and losses to end the lackluster session mostly flat. Seven out of the eleven primary sectors traded lower, with Materials and Communication Services sectors offsetting strength in Financials and Technology sectors.
THE DETAILS (The “How & Why”):
Uncertainty around the U.S. – China trade deal weighed down on investor sentiment during the early session, dragging trade-sensitive stocks lower. Materials and Industrials sectors shed 0.79% and 0.35%, respectively. Newmont Mining Corp., Eastman Chemical Co and Freeport-McMoRan Inc. all fell more than 2% each on renewed trade tensions.
Boeing Inc. continued to drag the Industrial space lower, giving up another 1.02% a day after the U.S. joined several other countries in grounding the aircraft maker’s most-popular 737 MAX fleet. Airline and transportation stocks also fell as oil prices rose for the fourth straight session to hit their four-month highs on the back of tightening global supply.
Communication Services sector was the second worst decliner of the session, dragged lower by Take-Two Interactive Software Inc. and Facebook Inc. A string of negative reports hit Facebook Inc. to fall 1.85% on reports that it encountered major outages around the global for most part of Wednesday. The social-media giant shed another 2% in after-hours trading following abrupt exit of two high profile executives. Meanwhile, Take-Two Interactive Software Inc. gave back some of its previous session’s strong gains after Sony Corp. declined rumors of acquiring the video game publisher.
Consumer Discretionary sector was the other notable decliner, closing 0.31% lower, primarily led lower by a 7.49% plunge in Dollar General Corp. The discount retailer weighed down on other retail stocks on posting weaker-than-expected fourth-quarter earnings and a disappointing fiscal outlook.
The only sectors with notable gains were Financials and Technology. Semiconductor stocks extended their recent gains alongside a 1.11% rise in Apple Inc. after the tech-giant received a ‘buy’ rating from an analyst, citing stabilizing iPhone sales and new product launches. Lam Research Corp and Adobe Inc. were the strongest gainers within the tech space, rising 3.59% and 1.25%, respectively.
