The S&P 500 (+0.7%) and Nasdaq Composite (+1.1%) closed at or near intraday highs, with the Nasdaq hitting a new record. The Dow Jones Industrial Average underperformed, closing nearly unchanged from yesterday near its session low.
Volume was light at the NYSE, reflecting limited participation ahead of the three-day weekend. Markets will be closed on Monday for Memorial Day.
Many stocks saw gains in today's broad rally. Advancers led decliners by a 3-to-1 margin at the NYSE and by a 2-to-1 margin at the Nasdaq. The equal-weighted S&P 500 settled 0.7% higher, with ten of the 11 S&P 500 sectors closing with gains.
The communication services (+1.3%) and information technology (+1.1%) sectors saw the largest gains, while the health care sector (-0.3%) was the only one in negative territory.
The positive bias was attributed to a rebound after recent losses and calm price action in the Treasury market.
Treasuries initially saw increased selling following a stronger-than-expected April Durable Orders report (actual 0.7%; consensus -0.8%). However, selling pressure eased after the final reading of the University of Michigan's Consumer Sentiment survey showed year-ahead inflation expectations slowed to 3.3% from 3.5%.
The 2-year note yield settled two basis points higher today, and 13 basis points higher this week, at 4.95%. The 10-year note yield settled one basis point lower today, and four basis points higher this week, at 4.46%.
- Nasdaq Composite: +12.7% YTD
- S&P 500: +11.2% YTD
- S&P Midcap 400: +7.0% YTD
- Dow Jones Industrial Average: +3.7% YTD
- Russell 2000: +2.1% YTD
Today's economic data:
- April Durable Orders: 0.7% (consensus -0.8%); prior revised to 0.8% from 2.6%
- April Durable Orders ex-transportation: 0.4% (consensus 0.2%); prior revised to 0.0% from 0.2%
- Key takeaway: Order increases for most components, indicating manufacturing activity supports ongoing U.S. economic growth.
- May Univ. of Michigan Consumer Sentiment - Final: 69.1 (consensus 67.6); prior 67.4
- Key takeaway: Helpful revisions include an uptick in the overall index and downticks in both year-ahead and long-run inflation expectations from the preliminary report.
As a reminder, bond and equity markets will be closed on Monday for Memorial Day. Looking ahead to Tuesday, market participants will receive the following economic data: March FHFA Housing Price Index (prior 1.2%) and March S&P Case-Shiller Home Price Index (prior 7.3%) at 9:00 ET; May Consumer Confidence (prior 97.0) at 10:00 ET; $69 billion 2-year Treasury note auction results at 11:30 ET; and $70 billion 5-year Treasury note auction results at 13:00 ET.
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Today's News
Novo Nordisk (NVO) encountered a significant setback as a majority of an FDA advisory panel members expressed concerns over the risks of its once-weekly insulin icodec, outweighing its benefits. Seven out of the 11 voting members highlighted hypoglycemia concerns in a key trial comparing insulin icodec to Novo's once-daily Tresiba. Although Novo suggested glucose monitoring devices as a mitigation strategy, the panel was not convinced, suggesting the drug might only be suitable for a subset of patients.
Cathie Wood, founder and CEO of Ark Invest, warned that the current equity market environment mirrors the intense search for safety seen during the Great Depression. This statement came after Nvidia (NVDA, Financial) soared past a $1,000 stock price for the first time, adding to its $2T market cap. Wood's comments were aimed at the growing fear and search for safe investments, which she believes will eventually dissipate, leading to a broader market recovery.
Lowe's Companies (LOW, Financial) continued its downward trend, closing Friday with its seventh consecutive day of losses. The stock has underperformed the broader market, with a year-to-date loss of 2.3% compared to the S&P 500's 10.44% gain. Analysts are mixed on the stock, with a majority holding it at a "Hold" rating.
FedEx Corporation (FDX, Financial) also faced a challenging week, marking its seventh straight session of losses. The stock fell close to 4% over this period, underperforming the S&P 500. Analysts have mixed views on FedEx, with a majority rating it as a "Hold."
V.F. Corp (VFC, Financial) saw its shares rise by 4.3% amid reports that the company is exploring the sale of its Supreme brand. Potential buyers include Authentic Brands, WHP Global, and G-III Apparel Group, among others. The company is currently undergoing a strategic review of its brands, with all but Vans and The North Face being considered for sale.
McDonald’s (MCD, Financial) shares closed slightly higher at $258.1 on Friday after six consecutive losing sessions. The stock has declined 13% so far this year, underperforming the broader market. Analysts are generally bullish on McDonald's, with a majority recommending a "Buy."
Shell (SHEL, Financial) confirmed that its downstream assets in South Africa are attracting bids from several major companies, including Abu Dhabi National Oil Company and Saudi Aramco. The assets could be valued at over $800M. Shell is looking to sell these assets after shutting down its Durban oil refinery in 2022.
Medical Properties Trust (MPW, Financial) announced the closing of an ~$800M new non-recourse, non-amortizing secured financing transaction. The loan, backed by properties in its U.K. portfolio, will be used to repay outstanding debt and for general corporate purposes. The debt carries a fixed cash pay rate of 6.9% over a 10-year term.
CVS Health (CVS, Financial) saw two of its Rhode Island stores vote to join the newly formed national pharmacy union, The Pharmacy Guild. This move follows a similar unionization at a CVS Omnicare pharmacy in Las Vegas last month. CVS noted that these two stores represent a small fraction of its overall pharmacy workforce.
Stericycle (SRCL, Financial) surged 15% amid reports that the company is evaluating a possible sale after receiving takeover interest. Potential buyers include other medical waste management providers and infrastructure funds. Stericycle has a market cap of $4.2 billion.
Capital One Financial (COF, Financial) and Walmart (WMT, Financial) announced the end of their consumer credit card partnership. Capital One will retain ownership and servicing of the credit card accounts, with plans to convert eligible customers to Capital One-branded card products.
Zscaler (ZS) is set to report its fiscal third-quarter results next week, and Baird believes the release could counter recent negative sentiment. Despite competitive pressures, the firm expects Zscaler to exceed low expectations based on solid channel feedback and Federal/SLED business performance.
Cogent Biosciences (COGT) reported positive data from a Phase 3 trial for its lead asset, bezuclastinib, in combination with sunitinib for gastrointestinal stromal tumors. Patients on the drug combo lived a median of 10.2 months without cancer progression. The drug combo was well-tolerated, with no new safety signals.
Ardelyx (ARDX) shares trended lower after the resignation of its chief commercial officer, Susan Rodriguez. Despite her departure, Rodriguez will continue to serve in an advisory role through the end of 2024. The resignation adds uncertainty as the company awaits FDA approval for its Xphozah kidney disease drug.
NIO (NIO) announced the opening of NIO House Amsterdam, its largest in Europe, marking a significant step in its global expansion. The company has made substantial progress in its European operations, with six mass-produced models and numerous charging stations now available in the market.
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