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U.S. equities begin the week on a slightly higher note, as investors digest the U..S regulator's approval of the sale of First Republic Bank (NYSE:FRC)'s assets to JPMorgan Chase & Co. (NYSE:JPM).
Both the S&P 500 and the Dow Jones Industrial Average are slightly stronger, while the Nasdaq remained steady due to rising Treasury yields.
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The main underperformers of the day are U.S. Treasuries, with yields jumping dramatically across all maturities of the curve as investors perceive First Republic's resolution as lowering the risks of a banking meltdown.
Cues From Monday’s Trading:
Major U.S. equity indices edged higher, with both the S&P 500 and the Dow adding 0.3%, while the Nasdaq 100 was flat.
Small cap equities in the Russell 2000 were the outperformers, with the benchmark rising 0.5%.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq 100 | +0.05% | 13,258.17 | |
| S&P 500 Index | +0.34% | 4,183.18 | |
| Dow Industrials | +0.31% | 34,228.98 |
Analyst Color:
The last week’s rally was driven by larger companies as investors sought refuge in quality names amid the credit concerns brewing in the banking industry, which would be more of a problem for smaller businesses, said fund manager Louis Navellier. He noted that the Invesco QQQ Trust (NASDAQ:QQQ) hit the high for the year on the back of positive big tech earnings.
“If the Fed doesn't say they are done for now after next Wednesday's FOMC meeting, the market indexes appear vulnerable,” Navellier said.
Monday's Trading In Major US Equity ETFs: In midday trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.3% higher to $417.32, the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose 0.37% to $342.39 and the Invesco QQQ Trust (NASDAQ:QQQ) was 0.1% higher to $322.76, according to Benzinga Pro data.
Among sectors, the outperformers were the Utilities Select Sector SPDR Fund (NYSE:XLU) and the Industrials Select Sector SPDR Fund (NYSE:XLI), both up by 0.9%.
Losses hit the Energy Select Sector SPDR Fund (NYSE:XLK), down 0.9%, the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY), down 0.6% and the Real Estate Select Sector SPDR Fund (NYSE:XLRE), down 0.4%.
Latest Economic Data:
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- The Institute for Supply Management said the U.S. manufacturing purchasing managers’ index, or PMI, rose from 46.3 in March to 47.1 in April, beating expectations of 46.8. Among the different subindices, it's worth noting that input costs increased in April after falling somewhat the previous month.
The Commerce Department reported a 0.3% increase in construction spending in March, rising from the negative 0.3% recorded in February.
See also: How To Trade Futures
Stocks In Focus:
- First Republic shares tumbled close to 43% after the FDIC takeover. JPMorgan, which has agreed to buy its assets and deposits from the FDIC, rose over 3%.
- Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) was the best performer of the day among S&P 500 companies, up 8%, as the firm posted better than expected results in Q1.
- NVIDIA Corp. (NASDAQ:NVDA) rose 3.7%, on the back of positive AI sentiment.
- Chinese electric vehicle trio Li Auto, Inc. (NASDAQ:LI), XPeng, Inc. (NYSE:XPEV) and Nio, Inc. (NYSE:NIO) climbed following the release of April delivery data.
- IVERIC bio, Inc. (NASDAQ:ISEE) jumped over 17% after the retinal diseases-focused biopharma inked a deal to be acquired by Japanese pharma giant Astellas Pharma, Inc. (OTC:ALPMY).
- Rambus, Inc. (NASDAQ:RMBS), NXP Semiconductors N.V. (NASDAQ:NXPI), MicroStrategy, Inc. (NYSE:MSTR), MGM Resorts International (NYSE:MGM) and Lattice Semiconductor Corp. (NASDAQ:LSCC) are among the notable companies reporting after the bell.
Commodities, Bonds, Other Global Equity Markets:
Crude oil fell 1.8%, with a barrel of WTI-grade crude dropping to $75.20. The United States Oil Fund ETF (NYSE:USO) was 1.8% lower to $66.30 per share.
Treasury yields rose substantially, with the 10-year yield up by 13 basis points to 3.55% and the two-year yield also up 13 basis points to 4.13%. The iShares 20+ Year Treasury Bond ETF (NYSE:TLT) was 2.4% lower on the day.
The dollar continued to strengthen, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 0.5%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), fell 0.4% to 1.097.
European equity were mostly flat. The iShares MSCI Eurozone ETF (NYSE:EZU) tilted 0.2% higher.
Gold fell 0.35% to $1,982/oz. The SPDR Gold Trust (NYSE:GLD) was 0.4% lower to $184.2. Silver ticked 0.4% lower to $24.93, with the iShares Silver Trust (NYSE:SLV) falling 0.4% to $22.91 per share. Bitcoin (CRYPTO: BTC) fell 3.2% to $28,288.
Staff writer Piero Cingari updated this report midday Monday.
Photo via Shutterstock.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.