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For the Results of the morning’s Trading Plans, please click here.
THE GIST (“THE WHAT”)
The S&P 500 index snapped a two-day losing streak to close today’s choppy session higher at 2995.11, up 10.69 points and gaining 0.36% over previous session’s close. A surprisingly disappointing quarterly result by Netflix Inc. weighed down on the index during the early morning session.
A dovish confirmation by the New York Fed President John Williams, however, helped the index to rebound in the late afternoon session. Seven out of the eleven primary sectors closed higher in today’s volatile session with Financials and Consumer Staples leading the advances. Weakness in Communication Services and FAANG stocks, however, kept gains capped.
THE DETAILS (The “How & Why”):
A sharp 10.27% plunge in Netflix Inc. dragged the broader Communication Services sector lower by 0.89%. The video streaming giant missed its international subscriber additions by a large number, sparking concerns of weakening subscriber growth in the wake of growing competition from new streaming businesses. Except Apple Inc. that rose 1.14% on stock upgrade, all the other FAANG components traded lower for the day.
Disappointing guidance by United Rentals Inc., Genuine Parts Co and M&T Bank Corporation further dragged the index lower during the early session. Treasury yields edged higher at open following stronger-than-expected Philadelphia manufacturing index that suggested an improving economy. Yields and the U.S. Dollar, however, slipped sharply after New York Fed President John Williams solidified expectations of a rate cut at the end of this month.
Banks and Financials led the day’s advances, closing 0.82% higher. A 4.51% decline in M&T Corp. capped the gains within this space. The lender missed earnings expectations and guided lower for full fiscal year citing lower interest rates. Real Estate and Consumer Discretionary sectors were the other notable decliners of the session.
On the other hand, supporting the day’s gains were Technology stocks, led higher by chip stocks after Goldman Sachs upgraded Apple Inc., citing potential from its upcoming lower-priced 5G model next year. While Apple Inc. jumped 1.14%, Broadcom Inc., Lam Research Corp., Microchip Technology and Micron Technology Inc. all received a modest boost. IBM further fueled the gains within the technology space, rising 4.55% on beating earnings estimates.
Defensive sectors also posted modest gains on the back of strong earnings. Consumer Staples, Utilities and Health Care closed higher by 0.82%, 0.79% and 0.54%, respectively. Philip Morris International Inc. was the best performer of the session, surging 8.22% after the tobacco company posted better-than-expected quarterly results and raised its full-year profit outlook
Transportation stocks staged a rebound from previous session’s slump after Union Pacific Corp eased concerns of deteriorating global economic outlook and falling shipping volumes in the wake of international trade tensions. The railroad giant soared 5.89% on topping earnings and revenue estimates.