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Wall Street ended slightly higher on Monday, pulled up by bank stocks. Trading was generally conservative in the holiday-shortened session as investors tried to gauge the path the Fed would take in its next policy meeting. All three major indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose less than 0.1% or 10.87 points to close at 34,418.5. Eighteen components of the 30-stock index ended in positive territory, while 12 ended in negative.
The S&P 500 gained 0.1%, or 5.21 points, to close at 4,455.59. Nine of the 11 broad sectors of the benchmark index ended in positive territory. The Consumer Discretionary Select Sector SPDR (XLY), the Real Estate Select Sector SPDR (XLRE) and the Consumer Staples Select Sector SPDR (XLP) advanced 1.2%, 0.8% and 0.8%, respectively, while the Health Care Select Sector SPDR (XLV) declined 0.8%.
The tech-heavy Nasdaq advanced 28.85 points, or 0.2%, to finish at 13,816.77.
The fear-gauge CBOE Volatility Index (VIX) was up 0.8% at 13.70. A total of 6 billion shares were traded on Monday, lower than the last 20-session average of 11 billion. Advancers outnumbered decliners on the NYSE by a 2.27-to-1 ratio. On the Nasdaq, a 1.51-to-1 ratio favored advancing issues.
Tesla Drives the Market
The tech sector, which has contributed the most to the strong showing of the market in 2023, slightly fell on Monday even as Tesla, Inc. (TSLA - Free Report) rose 6.9% to pull up the broader market. The electric vehicle manufacturer reported better-than-expected quarterly deliveries in the April to June period, primarily by taking up the price-cut strategy.
Tesla delivered 466,140 vehicles in the second quarter, up 10% from the last quarter and 83% higher year over year. At its current price of $279 per share, the stock has already more than doubled in value this year and is moving closer to the coveted $1 trillion mark in market capitalization.
The mega-cap stock Tesla did well on Monday and drove the market with it in the holiday-shortened session. Consumer discretionaries, staples and real estate became the biggest gainers.
Bank Stocks Rise After Overcoming Fed Stress Tests
Top U.S. banks hiked their third-quarter dividends after successfully overcoming the Fed's annual health check, which showed they have enough capital to withstand a severe economic downturn. These major lenders continued to display resilience against the backdrop of the regional banking crisis that embroiled the industry earlier this year. They have held fort despite talks of a recession amid continued policy-tightening by the central bank.
Treasury Yield Curve Hits Deepest Inversion in 42 Years
The spread between the 2-year and 10-year U.S. Treasury note yields, one of the most closely watched curve in the bond market, hit its widest since 1981 at -109.50 in early trade on Monday. This inversion was a deeper inversion than the levels it hit in March during the U.S. regional banking crisis. The gap was -108.30 at the close of the session.
Considering the fact that yield-curve inversions have historically been a reliable signal of upcoming recessions, investors remained apprehensive. The market is currently pricing in a 25 bps interest rate hike from the July Fed meeting and continues to hope that further policy tightening will not push the economy into a recession.
Economic Data
The U.S. Census Bureau reported that construction spending during May 2023 was estimated at 0.9% above the revised April estimate. The April figure was revised down to 0.4% from the previously reported 1.2%.
The Institute for Supply Management reported that its manufacturing PMI for June had come in at 46, lower than the 46.9 registered in May.
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Stock Market News for Jul 5, 2023
Wall Street ended slightly higher on Monday, pulled up by bank stocks. Trading was generally conservative in the holiday-shortened session as investors tried to gauge the path the Fed would take in its next policy meeting. All three major indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose less than 0.1% or 10.87 points to close at 34,418.5. Eighteen components of the 30-stock index ended in positive territory, while 12 ended in negative.
The S&P 500 gained 0.1%, or 5.21 points, to close at 4,455.59. Nine of the 11 broad sectors of the benchmark index ended in positive territory. The Consumer Discretionary Select Sector SPDR (XLY), the Real Estate Select Sector SPDR (XLRE) and the Consumer Staples Select Sector SPDR (XLP) advanced 1.2%, 0.8% and 0.8%, respectively, while the Health Care Select Sector SPDR (XLV) declined 0.8%.
The tech-heavy Nasdaq advanced 28.85 points, or 0.2%, to finish at 13,816.77.
The fear-gauge CBOE Volatility Index (VIX) was up 0.8% at 13.70. A total of 6 billion shares were traded on Monday, lower than the last 20-session average of 11 billion. Advancers outnumbered decliners on the NYSE by a 2.27-to-1 ratio. On the Nasdaq, a 1.51-to-1 ratio favored advancing issues.
Tesla Drives the Market
The tech sector, which has contributed the most to the strong showing of the market in 2023, slightly fell on Monday even as Tesla, Inc. (TSLA - Free Report) rose 6.9% to pull up the broader market. The electric vehicle manufacturer reported better-than-expected quarterly deliveries in the April to June period, primarily by taking up the price-cut strategy.
Tesla delivered 466,140 vehicles in the second quarter, up 10% from the last quarter and 83% higher year over year. At its current price of $279 per share, the stock has already more than doubled in value this year and is moving closer to the coveted $1 trillion mark in market capitalization.
The mega-cap stock Tesla did well on Monday and drove the market with it in the holiday-shortened session. Consumer discretionaries, staples and real estate became the biggest gainers.
Bank Stocks Rise After Overcoming Fed Stress Tests
Top U.S. banks hiked their third-quarter dividends after successfully overcoming the Fed's annual health check, which showed they have enough capital to withstand a severe economic downturn. These major lenders continued to display resilience against the backdrop of the regional banking crisis that embroiled the industry earlier this year. They have held fort despite talks of a recession amid continued policy-tightening by the central bank.
Consequently, bank stocks rose through the day, as did financials. Shares of Citigroup Inc. (C - Free Report) and Bank of America Corporation (BAC - Free Report) rose 1.5% and 1.8%, respectively. Both carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Treasury Yield Curve Hits Deepest Inversion in 42 Years
The spread between the 2-year and 10-year U.S. Treasury note yields, one of the most closely watched curve in the bond market, hit its widest since 1981 at -109.50 in early trade on Monday. This inversion was a deeper inversion than the levels it hit in March during the U.S. regional banking crisis. The gap was -108.30 at the close of the session.
Considering the fact that yield-curve inversions have historically been a reliable signal of upcoming recessions, investors remained apprehensive. The market is currently pricing in a 25 bps interest rate hike from the July Fed meeting and continues to hope that further policy tightening will not push the economy into a recession.
Economic Data
The U.S. Census Bureau reported that construction spending during May 2023 was estimated at 0.9% above the revised April estimate. The April figure was revised down to 0.4% from the previously reported 1.2%.
The Institute for Supply Management reported that its manufacturing PMI for June had come in at 46, lower than the 46.9 registered in May.