Stocks Fight To Extend Winning Streak, Treasury Yields Rise: What's Driving Markets Monday?

The beginning of the week brought mixed performance for stocks on Wall Street, with the major indices trading close to the flatline during midday trading in New York following strong performance in the previous week.

The S&P 500 index is in the midst of its fifth consecutive day of gains, while the Nasdaq 100 has already logged six consecutive days of positive returns.

Monday’s rise in Treasury yields is presenting some challenges to further advances in the stock market. Defensive sectors like utilities, health care and staples outperformed cyclicals and tech.

Federal Reserve Governor Lisa D. Cook delivered a speech at Duke University expressing the expectation that current policy measures are sufficiently restrictive to bring inflation back to the target rate of 2%.

Cues From Monday’s Trading:

The S&P 500 was flat, while both the Nasdaq 100 and the Dow Jones Industrial Average were marginally higher by 0.1%.

Small caps showcased a robust 1.2% drop, after a strong week of gains.

US Index Performance In Week Ended Nov. 3

Analyst Color:

LPL Financial Chief Technical Strategist Adam Turnquist has taken the market’s comeback with a pinch of salt. The analyst noted that Thursday's 1.9% rally, powered by above-average volume and broad-based buying, pushed the index back above its closely watched 200-day moving average at 4,248.

“While we view this as a step in the right direction, a close above 4,400 would be required for the index to reverse its emerging downtrend,” Turnquist said. “Furthermore, market breadth has been underwhelming amid the latest bounce, as less than half of the stocks within the S&P 500 are trading above their 200-dma,” he added.

The analyst said more technical evidence is needed to affirm the lows of this correction have been set. Among the dynamics the analyst is watching for are:

• the S&P 500 to reverse its emerging downtrend with a close above 4,400.
• breadth to expand with at least half of the index constituents getting back above their 200-DMA.
• for 10-year yields to reverse their current uptrend with a move below 4.35%.

Monday Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was 0.1% higher to $435.03.
• The SPDR Dow Jones Industrial Average ETF DIA rose 0.1% to $340.90.
• The Invesco QQQ Trust QQQ was 0.2% higher to $368.55, according to Benzinga Pro data.

Looking at S&P 500 sector ETFs:

• The Real Estate Select Sector SPDR Fund XLRE was the laggard, down 1.7%.
• The Health Care Select Sector SPDR Fund XLV rose the most, up 0.6%.

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Stocks In Focus:

Apple, Inc. AAPL rose about 1.2%, outperforming the other “Magnificent 7” stocks.

Berkshire Hathaway Inc. BRK BRK fell 1.8% despite its quarterly report showing a more than 41% increase in operating profit.

BioNTech SE BNTX rose 4.8% following third-quarter results.

DISH Network Corporation DISH tumbled 22% after missing revenue estimates.

TreeHouse Foods, Inc. THS fell 10% following a revenue miss.

Those reporting after the market close are Vertex Pharmaceuticals Incorporated VRTX, Sanmina Corporation SANM, Goodyear Tire & Rubber Company GT, ADTRAN Holdings, Inc. ADTN, Unisys Corporation UIS, Tripadvisor, Inc. TRIP, RingCentral, Inc. RNG, OPKO Health, Inc. OPK, NXP Semiconductors N.V. NXPI, Matterport, Inc. MTTR, ICU Medical, Inc. ICUI and Diamondback Energy, Inc. FANG.

Commodities, Bonds, Other Global Equity Markets:

Crude oil rose 1.5%, with a barrel of WTI-grade crude trading at $81. The United States Oil Fund ETF USO was 1.4% higher to $75.87.  

Treasury yields were slightly higher, with the 10-year yield up by 7 basis points to 4.65% and the two-year yield up by 6 basis points to 4.91%. The iShares 20+ Year Treasury Bond ETF TLT was 0.9% lower for the day. 

The dollar held steady, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP flat. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was also flat at 1.0735.

European equity indices had a negative session. The SPDR DJ Euro STOXX 50 ETF  FEZ fell 0.4%. 

Gold edged 0.4% down to $1,983/oz, while silver fell 0.4% to $23.11. Bitcoin BTC/USD was 0.3% lower to $34,934.

Staff writer Piero Cingari updated this report midday Monday. 

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