Opening Comment — February 17, 2017
S&P 500: 2,347.20
Nasdaq Composite: 5,814.90
Stock index futures are lower ahead of Friday's open. The Dow and S&P 500 are both down 0.3% in the pre-market. The Nasdaq 100 is trading 0.2% below fair value on GLOBEX.
The major averages are poised to decline amid weakness in commodity prices. Investors also appear cautious heading into the long holiday weekend as they weigh the timing of expected Fed tightening and President Trump unveiling his plans to bolster the economy. The data calendar is limited to the release of leading indicators index at 10:00 a.m. ET., which is anticipated to be up 0.5% in January.
On the earnings front, Deere is climbing 2.5% to $111.93 after posting results above forecasts. Campbell Soup is falling 3.1% to $60.61 even as its quarterly profits beat analyst estimates. In other news, Kraft Heinz is advancing 4.7% to $91.35 after confirming it approached Unilever about a merger. Shares of Unilever are surging 11.2% to $47.39 on the news.
European markets are mostly lower at midsession. The DAX is down 0.5% in Frankfurt. The FTSE is edging up 0.1% in London despite a report that showed U.K. retail sales fell for a third straight month in January. Asian markets were down overnight. The Nikkei fell 0.6% in Tokyo as a stronger yen weighed on exporters. China's Shanghai Composite retreated 0.9% on the session.
Treasuries are higher with the benchmark 10-year note up 13/32 to yield 2.40%. In commodities, NYMEX WTI crude oil is down 0.5% to $53.07/barrel. COMEX gold is up 0.1% to $1240.60/ounce.
Midday Comment — February 17, 2017
DJIA: 20,556.89, down 62.88
S&P 500: 2,342.26, down 4.96
Nasdaq Composite: 5,815.37, up 0.47
Stocks remain under pressure at midsession. The Dow is down 63 points to 20556. The S&P 500 is off 5 points to 2342. The Nasdaq Composite is up less than a point at 5815.
The major averages are broadly lower Friday as investors appear cautious heading into the long President’s Day weekend. Weakness in commodity prices are also providing a market headwind. On the data front, the leading indicators index rose 0.6% in January, slightly ahead of a projected 0.5% increase. In earnings news, J.M. Smucker is retreating 4.2% to $132.10 after the maker of Folger’s provided cautious full-year revenue guidance. Campbell Soup is falling 6.8% to $58.29 as quarterly revenues declined more than analyst forecasted. Shares of Deere are down 0.2% to $108.94 even as profits topped consensus estimates.
Ten of 11 sectors in the S&P 500 are down in the session. Energy is the worst performing group. Exxon is off 0.8% to $81.63 and ConocoPhillips decreasing 2.2% to $47.28 amid a decline in oil prices. Consumer staples are the lone sector in positive territory. Shares of Kraft Heinz are climbing 7.8% to $94.12 after confirming it made an offer to acquire Unilever for approximately $143 billion.
Breadth is negative on issues by a 2-1 margin on the NYSE; 6-5 on the Nasdaq. NYSE Composite volume is more than 1.4 billion shares.
Treasuries remain higher with the benchmark 10-year note increasing 8/32 to yield 2.42%. In commodities, NYMEX WTI crude is down 0.5% to $53.11/barrel. COMEX gold is slipping 0.2% to $1237.50/ounce.
Closing Comment — February 17, 2017
DJIA: 20,624.05, up 4.28
S&P 500: 2,351.16, up 3.94
Nasdaq Composite: 5,838.58, up 23.68
Stocks rebounded to finish higher Friday. The Dow recovered from down as many as 87 points to close up 4 at 20624. The S&P 500 gained 4 points to 2351. The Nasdaq Composite rose 24 points higher at 5838.
The major averages erased their early declines to end the week at record levels heading into the long President’s Day weekend. Weaknesses in commodity prices were cited as a market headwind. Investors also appeared to weigh President Trump’s expected economic plans and timing of future Fed tightening interest rates. On the economic front, the leading indicator index rose 0.6% in January versus the consensus estimate to increase 0.5%. In earnings news, Campbell Soup dropped 6.4% to $58.52 as revenues fell more than consensus estimates. Deere increased 1.0% to $110.22 after quarterly results topped analyst forecasts.
Telecom and Consumer Staples were the best performing groups on the session. Verizon gained 1.5% to $49.19. Kraft Heinz climbed 10.6% to $96.57 after it confirmed it made an offer to purchase Unilever. Energy and Materials were down the most with Exxon losing 0.7% to $81.76 and Newmont Mining falling 1.5% to $37.01.
Breadth was negative on issues by 8-7 on the NYSE and 4-3 positive on the Nasdaq. Composite NYSE volume totaled 3.5 billion shares.
Treasuries rose with the 10-year note gaining 7/32 to yield 2.42%. In commodities, NYMEX WTI crude edged up 0.1% to $53.39/barrel. COMEX gold slipped 0.2% to $1237.60/ounce.
For the week, the Dow and Nasdaq Composite were both up 1.8% and the S&P 500 increased 1.5%.
Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo & Company and provides investment advice to Wells Fargo Bank, N.A., Wells Fargo Advisors, and other Wells Fargo affiliates. Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company.