Wall Street showed strength throughout much of today’s session after Senate leaders said a coronavirus aid compromise was within reach — and more in Thursday’s stock market update.
The S&P 500 and Nasdaq set another round of record highs before selling pressure in the final hour of action. This followed a report that Pfizer Inc. (NYSE: PFE) expects to ship just half of the coronavirus vaccine doses it originally planned for this year because of supply chain problems.
The Russell 2000 rose 0.5% with the intraday high tapping 1,860 and the current all-time high at 1,862.
The Dow added 0.3% with the intraday peak reaching 30,110 and six points shy of its all-time high.
The Nasdaq nudged up 0.2% while topping out at 12,439.
The S&P 500 slipped 0.1% despite trading to a high of 3,682.
Energy and Real Estate were the strongest sectors with gains of 1.1% and 0.7%. Utilities and Materials were the weakest sectors after falling 1% and 0.7%, respectively.
Shares of Splunk Inc. (Nasdaq: SPLK) plummeted 23% after announcing disappointing Q3 results. The company reported a surprise loss of $1.26 a share on revenue of $559 million versus forecasts for a profit of nine cents on revenue of $613 million.
Splunk also sees Q4 revenue in the $650-$700 million range, well below current forecasts of $777 million. Wall Street analysts were quick to lower their ratings and price targets with 17 analysts downgrading the stock.
The Q3 earnings season is rapidly coming to a close, turning out notably better than expected. A high number of companies were able to beat Q3 EPS (earnings per share) and revenue estimates — even though estimates for the period went up ahead of the start of the reporting cycle.
The big takeaway from the Q3 earnings season is a steadily improving outlook, with estimates for the current and coming periods going up.
Looking at the quarter as a whole, total S&P 500 earnings are expected to decline -7.2% on -0.8% lower revenues. Earnings growth for the quarter dropped to -13.2% on an ex-Technology basis, but improves to -3.4% on an ex-Energy basis.
Sectors with the weakest Q3 growth outlook remained the spaces exposed to social-distancing measures like Transportation (-116.8% earnings), Energy (-98.3%) and Consumer Discretionary (-72%).
For the current period, total S&P 500 earnings are expected to be down -11.2% on 0.1% higher revenues. Looking at the calendar year for the S&P 500 index, earnings are expected to decline -17.1% on -3.9% lower revenues in 2020, and increase 21.9% on 7.5% higher revenues in 2021.
European markets were mixed for the second straight session.
UK’s FTSE 100 advanced 0.4% and the Belgium20 edged up 0.1%. The Stoxx 600 was up less than a point, or 0.01%. Germany’s DAX 30 lost 0.5% and France’s CAC 40 dipped 0.2%.
Asian markets closed mostly higher.
South Korea’s Kospi gained 0.8% and Hong Kong’s Hang Seng rose 0.7%.
Australia’s S&P/ASX 200 climbed 0.4% and Japan’s Nikkei added 8 points, or 0.03%. China’s Shanghai slipped 0.2%.
The Challenger Job-Cut Report announced layoffs declined -15,800 in November after dropping -38,100 to 80,700 in October. The 12-month pace has continued to slow slightly and was at a 45.4% year-over-year clip last month compared to 60.4% in October. Most of the layoffs were in Leisure and Entertainment, -11,700, while technology announced the second highest total at -11,400.
Initial Jobless Claims dropped -75,000 to 712,000, versus forecasts for a print of 780,000, after rising 39,000 to 787,000 previously. The four-week moving average fell to 739,500 from 750,750. Continuing claims plunged -569,000 to 5,520,000 versus the -281,000 prior dive to 6,089,000.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) snapped a three-session slide after trading to an afternoon high of $157.82. Fresh and lower resistance at $157.50-$158 was cleared and held. A close below the latter would indicate a possible retest towards $159.50-$160 and the 50-day moving average.
Support is at $156.50-$156 followed by $155-$154.50.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was up for the third straight session after trading in a tight range with the intraday low reaching 20.72. Current and upper support at 20.50-20 was challenged but held. A close below the latter would indicate a further pullback toward 19.50-19.
Resistance remains at 21.50-22 followed by 22.50-23.
The iShares Russell Growth 1000 ETF (NYSE: IWF) was down for the second straight session despite tapping an intraday high of $234.55. Lower resistance at $234.50-$235 was cleared but held. A close above the latter and the all-time peak at $234.76 would signal a possible triple-top breakout towards $237-$237.50.
Current support is at $232.50-$232 followed by $231-$230.50.
RS has leveled out with lower resistance at 65-70 holding. A move above the latter would suggest additional strength towards 75-80 and prior levels from early September. Key support is at 60.
The Energy Select Sector SPDR Fund (NYSE: XLE) extended its winning streak to three straight sessions with the midday peak hitting $39. Near-term and lower resistance at $38.50-$39 was cleared and held. A close above the latter would suggest additional strength towards $39.50-$40 with the late November high at $40.42.
Current support is at $38-$37.50 followed by $37-$36.50.
RSI is in an uptrend with lower resistance at 65-70 holding. A close above the latter would signal strength towards 75 and the November top. Support is at 60.
Check back after the closing bell for the most important news and numbers in the WealthPress stock market update.