Note: Our nightly “S&P 500 Outlook, Forecast, and Trading plan for Wednesday, 08/08” will be posted by 7:30am/8:00am EDT, Wednesday.
THE GIST (“THE WHAT”)
Grinding towards its all-time peak, the S&P 500 index moved solidly higher for the fourth straight session. With no big story on trade war front, strong earnings took center stage at the tail-end phase of second quarterly earnings season. Energy stocks rose alongside a rise in oil prices on tightening oil supply concerns, leading the index higher.
Swinging within a very tight 8-point trading range, the index closed off session-highs at 2858.45, up 8.05 points and gaining 0.28% over previous session’s close. Seven out of the eleven primary sectors ended the session higher. The index is now at a striking distance and just 0.50% (14.42 points) away from the all-time high of 2872.87 it registered on January 26, 2018, with no major resistance in sight.
THE DETAILS (The “How & Why”):
Energy stocks led the day’s gains, up 0.72% as oil prices continued their upward trend on the back of tightening supply concerns following reports of decreasing Saudi Arabia’s production. Reinstated sanctions on Iran by the Trump administration also added to the global supply worries.
Industrials sector also outperformed to lead the index higher with a 0.70% gain. Emerson Electric Co. was the best performer within the sector, rising 4.24% on surpassing second quarterly earnings estimates. Limiting gains however was a sharp 5.88% fall in Expeditors International of Washington Inc., despite reporting better-than-expected results.
Financials were up 0.48% for the day as yields inched up in a risk-on session. Other notable gainers were Consumer Discretionary and Technology sectors, up 0.44% and 0.33% respectively. Broadridge Financial Solutions Inc. was the best performer in the broader index, soaring 11.16% on reporting increased profits despite a fall in revenue.
Telecommunications sector also ended the day higher by 0.42% on optimism over industry consolidation. Mosaic Co. surged 5.32%, lifting the broader Materials sector higher by 0.26% on beating earnings estimates.
Offsetting some of the day’s gains were dividend-paying defensive sectors, including Consumer Staples, Real Estate and Utilities, down 0.57%, 0.22% and 0.22% respectively.