Note: Our nightly “S&P 500 Outlook,Forecast, and Trading plan for Tue, 07/17” will be posted Mon, 07/16 night – please check back around 10:30pm/11pm EDT.
S&P 500 TODAY – MON 07/16
THE GIST (“THE WHAT”)
The S&P 500 index opened flat as a slump in Energy stocks offsetting gains in Financials sector. A sharp fall in Energy stocks alongside a drop in oil prices during the early session dragged the index down to the day’s low at 2793.39.
While the index attempted to reverse losses in the afternoon session, it was unable to break through the now familiar technical resistance at 2800 level. Fluctuating between a narrow range the index closed the session at 2798.43, down 2.88 points and losing a slight 0.10% over previous session’s close. Eight out of the eleven primary sectors ended the day lower on a below average trading volume.
Interestingly, the much anticipated meeting between President Trump and the Russian President Putin in Finland had little impact on the market today as both the leaders chose to avoid the hot topics of oil prices and global trade tensions.
THE DETAILS (The “How & Why”):
Financials sector led the day’s advances, up a solid 1.80% as investors digested disappointing earnings reports by some of the big banks last week. Bank of America Corp. released better-than-expected second quarter earnings as a result of impressive growth in commercial and consumer loans, coupled with aggressive cost cutting measures, gaining 4.31% and boosting optimism about the coming quarters in the rising interest rate environment. JP Morgan Chase & Co, Wells Fargo & Co and Citigroup Inc. recovered from last sessions sell-off to be amongst the top gainers in today’s session.
Telecommunication sector added to the day’s gains, up 0.47%. The U.S. Retail Sales data showed an increase of 0.5%, in line with the expectations, lifting the broader Consumer Discretionary sector by 0.19%. Kohl’s Corp. and Macy’s Inc. led the gains within the sector, up 2.20% and 1.65% respectively.
Energy stocks were the biggest drag on the index, losing 1.18% led by a 6.70% fall in stocks of Marathon Oil Corp. Oil prices dropped sharply on news of reopening of Libyan ports for exports, coupled with the expectations of rising Saudi Arabian output. Meanwhile, WTI (West Texan Intermediate) futures fell more than 4% following comments by U.S. Treasury Secretary Steve Mnuchin that the Trump administration could provide waivers to some countries and allow them to import Iranian oil.
Alliance Data Systems Corp. was the worst performer in the index, losing 10.06%, weighing down on the broader Technology sector. The sector ended the day lower by 0.35%. Among the other noticeable laggards were Utilities, Real Estate and Health care sectors, down by 0.15%, 0.59% and 0.69% respectively.
Industrials, Consumer Staples and Materials also shed 0.44%, 0.51% and 0.80% respectively. Arconic Inc. was the top gainer in the index and the only company gaining within the broader Materials sector, up a solid 10.47% following reports that the metals manufacturer is a buyout target for several private equity firms.
