Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Friday, 05/03” will be posted around 8:30am EDT, Friday.

THE GIST (“THE WHAT”)

Intense selling in Energy stocks extended for the second session in a row alongside plunging oil prices, dragging the S&P 500 index lower. The index, however, recouped some of the day’s losses to close off of session lows at 2917.52, down 6.12 points and losing 0.21% over previous session’s close.
Trading higher during the early morning session, the index was pulled back on registering the day’s high at 2931.68. Finding support at the psychologically important 2900 level, the index recouped some of the losses to close the choppy session off of day’s lows. Eight out of the eleven primary sectors traded lower, with Energy sector leading the declines.

THE DETAILS (The “How & Why”):

Oil prices plunged to their lowest level in a month on concerns of a supply glut following a significant increase in domestic crude supplies by 10 million barrels. The Energy sector was broadly sold-off to close 1.71% lower. Concho Resources Inc., Devon Energy Corp and EOG Resources Inc. fell 3.59%, 2.89% and 2.96%, respectively. Apache Corp and Marathon Oil tumbled more than 6% each on disappointing first-quarterly earnings.

Technology, Materials and Communication Services were the other notable decliners of the session, modestly lower by a little over 0.50% each. Fluor Corp. was the worst decliner of the session, plunging by 24.09% after the engineering, construction and operations company missed earnings estimate. Cognizant Technology Solutions Corp, Huntington Ingalls Industries Inc. and DowDuPont Inc. were the other major decliners, falling more than 6% each on disappointing quarterly results.
Health Care was the only notable gainer of the session, up 0.47%. Financials and Real Estate posted slight gains, up 0.16% and 0.15% respectively. The 10-year Treasury yields edged up 5 basis points to settle at 2.55%, benefiting banking stocks as investors continued to digest comments that the current low inflation rate in only “transitory”.
On the earnings front, some of the strong movers on the back of earnings beat were Teleflex Inc., Advanced Micro Devices Inc. and AmerisourceBergen Corp., all rising 6.21%, 5.52% and 5.00%, respectively.