Closing Comment — Friday, February 26, 2021
DJIA: 30,932.37, down 469.64
S&P 500: 3,811.15, down 18.19
Nasdaq Composite: 13,192.34, up 72.91
Stocks end volatile week, cap monthly gains
U.S. stocks finished mixed on Friday, ending a volatile week that capped a largely upbeat month. Tech shares stabilized on the heels of Thursday’s steep sell-off in both the bond and equity markets. The Dow shed 469 points, extending its weekly decline to 1.8%. The S&P 500 erased afternoon gains to end 0.5% lower, closing the week with a 2.5% drop. The Nasdaq Composite rebounded 0.6%, still ending its worst week since October, down 4.9%. All three major averages advanced in February, with the Dow rallying 3.2%, the S&P 500 gaining 2.6%, and the Nasdaq Composite rising 0.9%.
Treasuries strengthened on Friday, with the yield on the 10-year note down 12 basis points 1.40%. The benchmark yield still notched its largest monthly increase since November 2016, having climbed nearly 50 basis points year-to-date. On the data front, personal income surged 10% in January, while personal spending rose by the most in seven months, up 2.4%. Separately, the core PCE deflator (the Fed's preferred proxy of inflation) increased 1.5% year-over-year last month, helping ease price pressure worries. Additionally, the final reading of the University of Michigan’s measure of consumer sentiment improved slightly in February.
Eight of 11 S&P 500 sectors closed lower, with Energy shares (the best performing sector of February) leading laggards. The Technology group outperformed, recouping 0.6%. In earnings, Salesforce.com fell 6.3% on the heels of disappointing forward guidance. In other corporate news, shares of Beyond Meat added 1.2% after the company struck an agreement to supply its plant-based products to both McDonald’s and Taco Bell parent Yum! Brands.
Midday Comment — Friday, February 26, 2021
DJIA: 31,185.50, down 216.51
S&P 500: 3,842.73, up 13.39
Nasdaq Composite: 13,300.71, up 181.28
Stocks mixed midday as tech shares rebound
The U.S. major averages are mixed near mid-session Friday, as investors take stock of yesterday's sharp sell-off in both the bond and equity markets. The Dow is retreating 216 points, extending its weekly decline to more than 1%. The S&P 500 is reversing earlier losses to rise 0.4%. The Nasdaq Composite is rebounding 1.4% a day after capping its worst one-day decline (-3.5%) since October. All three stock benchmarks are on pace for monthly gains, with the Dow set to outperform the Nasdaq Composite by the widest margin since October 2018.
Treasuries are stabilizing, with the yield on the 10-year note falling two basis points 1.50%. Yesterday, the benchmark yield momentarily spiked to 1.61% following weak demand for the seven-year note auction. On the data front today, personal income surged 10%, while personal spending climbed 2.4% last month. Separately, the Fed's preferred proxy of inflation, core PCE deflator, rose 1.5% year-over-year in January. A preliminary reading showed wholesale inventories jumped 1.3% in January, well above estimates for a 0.4% rise.
Seven of 11 S&P 500 sectors are trading in negative territory, with Energy (the best performing sector of February) leading laggards. In corporate news, Beyond Meat is jumping 3.4% after the plant-based meat maker announced partnerships with both McDonalds and Taco Bell parent Yum! Brands. Salesforce.com is falling 4.6% as the company provided disappointing forward earnings guidance following a top and bottom line beat. Breadth is negative by 3:2 on the NYSE and by 9:7 on the Nasdaq. Composite NYSE volume is more than 2.6 billion shares.
Opening Comment — Friday, February 26, 2021
DJIA: 31,194.37, down 207.64
S&P 500: 3,825.91, down 3.43
Nasdaq Composite: 13,156.59, up 37.16
Stocks fluctuate in early trading
U.S. equities are mixed in early trading Friday, as investors digest the latest economic data and assess yesterday's sharp sell-off in both the bond and equity markets. The Dow is falling 207 points, while the S&P 500 is slipping 0.1%. The Nasdaq Composite is rebounding 0.3% a day after capping its worst one-day decline (-3.5%) since October.
Treasuries are stabilizing this morning, with the yield on the 10-year note off three basis points to 1.49%. Yesterday, the benchmark yield momentarily spiked to 1.61% following weak demand for the seven-year note auction. The rout in Treasuries pressured equities, with the Dow and S&P 500 both notching their biggest one-day decline in February. Still, all three major U.S. benchmarks are on pace for monthly gains, with the Dow set to outperform the Nasdaq Composite by the widest margin since October 2018.
On the data front, personal income surged 10%, while personal spending climbed 2.4% last month. Separately, the Fed's preferred proxy of inflation, core PCE deflator, rose 1.5% year-over-year in January. A preliminary reading showed wholesale inventories jumped 1.3% in January, well above estimates for a 0.4% rise. Finally, the final February update on consumer sentiment from the University of Michigan improved modestly.
In corporate news, Beyond Meat is jumping 2.6% following news the company struck an agreement to supply its plant-based products to both McDonalds and Taco Bell parent Yum! Brands. Salesforce.com is falling 3.3% as the company provided disappointing forward earnings guidance following a top and bottom line beat. Breadth is negative by roughly 2:1 on both the NYSE and the Nasdaq.