Note: Our daily “S&P 500 Outlook, Forecast, and Trading plan for Wednesday, 03/06” will be posted around 8:30am EDT, Wednesday.
THE GIST (“THE WHAT”)
Struggling for direction, the S&P 500 index continued consolidating within key technical levels looking for a catalyst to break out as investors keenly await any fresh news around U.S. – China trade negotiations. Trading in a tight range, the index flipped between small gains and losses to close off of session lows at 2789.65, down marginally by 3.16 points and losing 0.11% over previous session’s close.
While retail stocks rose on the back of strong earnings posted by Target Corp and Kohl’s Corp, health insurance stocks rebounded from their recent slump to support the day’s gains. Eight out of the eleven primary sectors traded lower, with Industrials and Materials leading the declines.
THE DETAILS (The “How & Why”):
Industrials sector was the worst performing sector of today’s choppy session, down 0.64% led by a 4.72% fall in General Electric Co. The struggling industrial conglomerate disappointed investors by forecasting a net cash outflow this year due its underperforming power unit. Airlines and transportation stocks were also broadly lower in today’s session.
Metal prices fell across the board on the back of a stronger dollar, weighing down on mining stocks. Materials sector was the next biggest drag on the index, down 0.50%. Other sectors with notable declines were Financials, Energy and Technology.
Treasury yields settled relatively unchanged for the day despite a stronger-than-expected ISM Non-Manufacturing index for the month of February that rose by 59.7% compared to the expected reading of 57.5%. Energy stocks gave back their previous session’s gains, falling alongside a decline in oil prices following reports of rising U.S. crude supplies by more than 7 million barrels.
Utilities, Health Care and Consumer Staples fared relatively better, closing slightly lower by 0.17%, 0.07% and 0.04%. On the bright side, Facebook Inc., Twitter Inc. and Netflix Inc. rose 2.32%, 1.74% and 0.93%, respectively, lifting the broader Communication Services sector modestly higher by 0.73%. UnitedHealth Group Inc. and Anthem Inc. rose 2.29% and 2.08%, rebounding from their recent slump.
Real Estate sector received a boost from new-homes sales data that indicated a 3.7% increase in sales of new homes in the month of December. Meanwhile, retailers and departmental chain stocks rose broadly alongside a surge in Kohl’s Corp and Target Corp. These retail giants soared 7.31% and 4.58%, respectively, on posting impressive fourth-quarterly earnings, leading the Consumer Discretionary sector to close higher by 0.20%.