Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Friday, 11/16” will be posted around 8:30am EDT, Friday.
THE GIST (“THE WHAT”)
Taking a breather from a five-day losing streak, the S&P 500 index bounced back alongside a recovery in Technology stocks. Oil prices extended their gains, further supporting the day’s gains. Opening lower, the index struggled for direction and fluctuated between gains and losses during the early session as investors digested the chaos surrounding the Brexit deal.
Taking a sharp leg higher in the afternoon, the index maintained modest gains throughout the later session as Apple Inc. rebounded from deep losses on the back of analyst’s recommendation, closing the session at 2730.20, up 28.62 points and with a decent gain of 1.06% over previous session’s close. Eight out of the eleven primary sectors ended the volatile session higher, with Technology sector in the lead.
THE DETAILS (The “How & Why”):
Semiconductors were the strongest performers of the session on receiving a major boost from a rebound in Apple Inc. The iPhone maker snapped a steep five-day losing streak which had pushed it briefly into a bear market territory, rising 2.47% after Morgan Stanley recommended buying the tech-giant at the dips. Micron Technology Inc., Broadcom Corp and Microchip Technology Inc. were sharply higher by 4.94%, 4.48% and 4.62% respectively.
Arista Networks Inc. soared 6.41% to be the top gainer of the session after Cisco Systems Inc. boosted confidence among the computer networking companies, jumping 5.50% on beating its first-quarter earnings estimates and providing strong outlook for second-quarter. Capping sector gains, however, was a sharp decline in NetApp Inc., down 11.73% on missing earnings estimates.
Oil prices settled higher for the day, after whipsawing throughout the session as investors weighed a weekly decline in inventories of processed fuels against a larger-than-forecasted increase in stockpiles of crude oil in the U.S. While the Energy sector rose broadly higher, gaining 1.48%, led by Concho Resources Inc. and EOG Resources Inc., up 4.50% and 3.59%; EQT Corp. and Cabot Oil & Gas Corp. were the only decliners within the sector, down 1.60% and 0.77% alongside a plunge in natural gas prices on reports of a slight increase in supply.
Trade-sensitive Materials, Industrials and Communication Services were the other modest gainers of the session, up 1.44%, 1.25% and 0.62% respectively. Financials, Industrials and Health Care were the other gainers, up 1.44%, 1.25% and 0.96% respectively. U.S. dollar index and Treasury yields edged higher as investors fledged to safe haven assets amid political drama and uncertainty surrounding the U.K.’s Brexit deal.
On the downside, interest-sensitive sectors closed the session slightly lower alongside a rise in Treasury yields. Real Estate, Utilities and Consumer staples shed 0.90%, 0.77% and 0.33% respectively. PG&E Corp. was the worst decliner of the session. The struggling utility company tumbled another 30.68%, losing close to half of its value this week on concerns that it might face significant liabilities that could exceed the insurance coverage if one of its equipment was found to be the cause of the wildfires ravaging the Northern California.