YAHOO [BRIEFING.COM]: A
barrage of economic reports provided plenty of catalysts for trade, but broader
market muddled along for most of the session. Large-cap tech led the Nasdaq to
a strong gain, though.
Market participants got a
preview of tomorrow's pivotal nonfarm payrolls report with the release of the
May ADP Employment Change report, which indicated that private sector payrolls
increased by 55,000 last month. However, that was actually weaker than the
70,000 increase that had been widely expected.
Initial claims for the week
ended May 29 totaled 453,000, which is on par with the 455,000 initial claims
that many had come to expect. Continuing jobless claims climbed to 4.67
million, which is more than the 4.61 million that had been expected.
The ISM Services Index for May
came in at 55.4, which is in-line with expectations for a reading of 55.6.
Factory orders for April
increased 1.2%, which is a slower rate than the 1.7% increase that many had
expected.
In other economic news, first
quarter nonfarm productivity increased of 2.8%, which is less than the expected
3.3% increase. Unit labor costs for the first quarter fell 1.3%, which is a
softer decline than the 1.6% drop that had been widely expected.
There was an underwhelming
response to the large dose of data. Corporate headlines, which were generally
limited, also did little to inspire.
Roughly half of the monthly
same-store sales reports in Briefing.com's coverage universe missed
expectations. That left the group to lag the broader market for the better part
of the session and finish with a fractional gain.
BP Plc (BP 39.27, +1.61) had its debt downgraded
by analysts at Fitch, but the stock managed to rally and settle at a session
high as energy stocks caught a late bid amid comments from Senator Reid about
lifting the damage liability cap on companies in response to the oil spill in
the Gulf of Mexico. Energy stocks settled with a 1.1% gain.
Strength in the energy sector
was likely helped by higher prices. Specifically, crude oil futures prices
closed pit trade with a 2.4% gain at $74.61 per barrel. Its strength came from
a combination of rising concerns about supply constraints and inventory data
that showed a surprise draw of 1.90 million barrels.
Tech also finished the session
with a 1.1% gain. Large-cap plays like Google (GOOG 504.98,
+11.61), Microsoft (MSFT 26.86, +0.40), and Cisco
(CSCO 23.72, +0.37) underpinned the sector's strength and helped the
tech-rich Nasdaq outperform the other two headline indices.
While tech and energy, two of
the largest sectors by market weight, were strong, the broader market spent the
session chopping along in lackluster fashion. The muddled trade came partly in
response to a weaker euro, which fell 0.7% to the $1.261 level.
Energy prices traded with
strength for the better part of the session. Specifically, crude oil futures
prices made only a momentary slip into negative territory before a flurry of
buying in afternoon action helped the commodity close pit trade with a 2.4%
gain at $74.61 per barrel. Most of the late move was owed to rising concerns
about supply constraints, while early strength came amid news that crude oil
inventories for the week ended May 28 had a draw of 1.90 million barrels when
no change had been expected.
A smaller-than-expected build
of 88 bcf for the week ended May 28 helped natural gas prices climb sharply.
The energy component closed pit trade near its session high with a 5.9% gain at
$4.69 per MMBtu.
Precious metals remained weak.
As a group they lost 1.4%. Individually, gold gave up 1.0% to settle at $1210
per ounce. Silver settled 2.5% lower at $17.86 per ounce.
Technical resistance also kept
a cap on the broader market's moves. While buyers still showed modest support,
they appeared to lack conviction as the S&P 500 faded near its 200-day
moving average.
Trading volume was relatively
light in that 1.2 billion shares exchanged hands on the NYSE this session.
That's below the 50-day moving average of almost 1.4 billion shares.
Advancing Sectors: Tech (+1.1%), Energy (+1.1%), Utilities
(+1.0%), Industrials (+0.5%), Health Care (+0.5%), Consumer Discretionary
(+0.4%), Telecom (+0.2%), Consumer Staples (+0.1%)
Declining Sectors: Materials (-1.1%), Financials (-0.5%) DJ30
+5.74 NASDAQ +21.96 SP500 +4.45 NASDAQ Adv/Vol/Dec 1640/2.20 bln/998 NYSE
Adv/Vol/Dec 1923/1.22 bln/1076