S&P, Nasdaq reverse course after touching record highs

Wednesday, 10 May, 2017

In London British Prime Minister Theresa May pledged on Tuesday to cap household energy prices if she is re-elected on June 8, sending share prices tumbling with the biggest market intervention since the sector was privatised nearly 30 years ago.

Energy stocks (-0.9%) dragged along the bottom of the 11 S&P industry groups, as USA crude oil fell 1.2% to $45.88/bbl; utilities stocks also declined 0.9%.

The S&P 500 posted 44 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 116 new highs and 58 new lows.

Markets around the world have been tearing higher in recent weeks, due in part to excitement about the French election and strong earnings reports from USA companies.

However, St Louis Fed President James Bullard said strong bond demand and low labour force growth would keep a lid on interest rates.

Volatility in the markets has fallen considerably after the French election's results, with the S&P 500 VIX Index, a measure of volatility in the S&P 500 Index, falling 2.4% to 10.30, its lowest level in 12 months.

S&P, Nasdaq reverse course after touching record highs
S&P, Nasdaq reverse course after touching record highs

The S&P 500 was down 3.08 points, or 0.12 per cent, at 2,396.21, reversing from an all-time high of 2,401.36. It has been climbing since hitting a low of 2.17 percent three weeks ago. This past weekend's presidential election in France also raised confidence that voters may be turning their back on a nationalistic brand of politics that could hurt global trade. Last week's jobs report gave reassurance that the USA economy is improving despite its weak showing at the start of the year, and companies have been turning in stronger profit reports. The US benchmark West Texas Intermediate fell 1 per cent to $45.96 a barrel, while Brent crude dropped 1.1 per cent to $48.79. The hotel operator cited improving trends around the world, from North America to Europe to Asia. Brent crude, the global standard, fell 61 cents to $48.73 per barrel.

Tyson Foods was the biggest S&P loser, down 6.08 percent after the meat processor reported a slump in quarterly profit.

The cash market closed mixed, but the futures market produced more pronounced reversal tops. Coach shares rose 4.8%.

Japan's Nikkei 225 index dipped 0.3 percent, while the Hang Seng in Hong Kong jumped 1.3 percent. Markets in South Korea are closed today. The euro slipped to $1.0928 from $1.0990 late Friday. The dollar rose to 114.28 yen from 113.07 yen, and the British pound slipped to $1.2927 from $1.2943. On the Nasdaq, 1,279 issues rose and 868 fell.

Sinclair lost 2.2 per cent.

Brokerages Set Enable Midstream Partners LP (ENBL) Price Target at $15.86
Magellan Midstream Partners L.P. (NYSE:MMP) now has an Average Broker Rating of 2.33. 99,366 shares of the stock were exchanged. The pipeline company reported $0.98 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.90 by $0.08.