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S&P 500 TODAY
THE GIST (“THE WHAT”)
The S&P 500 index opened with significant gains as investors cheered at the stronger-than-expected economic data. ECB’s policy decision announcement on Thursday to keep their interest rates unchanged at record lows for now while ending the central bank’s stimulus program by the end of 2018 also boosted optimism, taking the index to reach the day’s high at 2789.06 in the early morning session (just under one point from the key level we published last night and reiterated this morning – click here for details). Fluctuating between a small trading range, but holding mostly stable, the index closed the session at 2781.88, up 6.11 points and gaining 0.22% over previous day’s close.
THE DETAILS (The “How & Why”):
Banking and Financial sector was the worst performing sector in the index, losing 0.93%, as treasury yields inched lower following ECB’s decision to end its easy monetary policies while keeping the interest rates unchanged for now. The 10-year Treasury yield settled at 2.938%, down 2.8 basis points.
Dividend paying stocks like Utilities and Telecom gained with falling yields. Real Estate stocks also gained 0.84%, after falling sharply in Wednesday’s session. Utilities led the day’s advances, gaining 1.17%. Telecommunication sector erased Wednesday’s losses, rising 0.98% on hopes of further industry consolidation following a court ruling that gave a green light to AT&T Inc.’s $85 billion acquisition of Time Warner Inc.
FAANG stocks rose to their all-time highs, boosting the overall Technology sector. Twitter Inc. was the top gainer in the index, up 6.10%. The broader Industrials sector however capped the day’s gains, losing 0.40% as trade concerns kicked in after the Trump administration announced its plan to impose additional tariffs on Chinese goods worth $10 billion as early as Friday.
Consumer Discretionary was the second best performing sector, gaining 1.01% backed by upbeat retail sales data. Retail sales for May rose 0.8% compared to an expected 0.4% increase, suggesting growing inflationary pressures on the economy. Meanwhile, Import Price Index rose for the second straight month by 0.6% in May. Business inventories also rose 0.3% in May, after a decline in the previous month. The weekly jobless claims came in at 218,000, as against the expected 224,000.