U.S. stock market averages gained back on Wednesday most of what they lost the day before, especially the market indexes that have Apple as a member. The NASDAQ 100, the 100 biggest stocks by market capitalization on NASDAQ (with AAPL shares accounting for roughly 13% of total index market cap), increased 0.8% today, essentially what it lost on Tuesday. AAPL’s 3% price gain today accounted for nearly one-half of the NASDAQ 100’s advance.
In the S&P 500, the gain in AAPL shares today contributed roughly one-quarter of the S&P 500 index’s 0.4% gain. The Dow, which does not have Apple as a constituent, managed a 0.3% advance on Wednesday. The two big-cap market benchmarks each recovered a little more than half of Tuesday’s declines today. The S&P 500 closed Wednesday at 1996, climbing back to within 0.6% of last Friday’s all-time high.
Not surprisingly, given Apple’s strong recovery, information technology (+0.8%) was the leading market sector in the S&P 500 today. It was followed closely by health care stocks (+0.7%), which have moved solidly to the head of the S&P’s 10 market sectors over the past several weeks in terms of total return in 2014 (+17%, on top of 2013’s 42% return).
VIX, the stock market’s implied volatility measure, retreated to 12.9 Wednesday, down 0.6 from Tuesday’s 4-week high reading of 13.5. Apple’s bouncing around of the past 2 days, which may have as much to do with the rise and fall of market hype as with any longer-term fundamental considerations, has been the prime mover in this week’s modestly higher market volatility. AAPL shares are up 28% year to date, trailing other high flyers such as Tesla (+87%), Facebook (+42%) and Netflix (+32%).
On the down side today – and there was a down side, as 2 stocks in the S&P 500 declined for every 3 that rose – energy stocks were once again losers, with the sector dropping another 0.3% Wednesday. This comes on top of the 2.1% decline seen in the first two days of the week. The utilities group has been similarly bad: down 0.4% today, after falling 1.9% on Monday and Tuesday. West Texas Intermediate grade crude oil prices fell to $91.67 a barrel, an 8-month low. Overall, the CRB commodities futures index fell 0.75% Wednesday, with nickel and coffee prices each falling more than 5%.
One week ahead of the Federal Open Market Committee’s September policy meeting, Treasury bond prices fell for the fourth day in five. The 10-year Treasury note dropped 10/32nds in price, its yield ticking up 4 basis points to 2.54%. The 30-year TIPS bond fell more than a point in price, its yield also rising 4 bps to 1.02%, its first foray above 1% since mid-July.
Reports/dates/facts/links to watch for over the next week:
- September 11: U.S. weekly jobless claims; U.S. Treasury monthly statement (August).
- September 12: U.S. retail sales (September); UofM/Reuters consumer sentiment report (mid-September). China industrial production (August).
- September 15: U.S. industrial production for August; NY Fed Empire State manufacturing index for September.
- September 16: German ZEW survey for September; U.S. same store sales for the latest week; U.S. PPI-FD for August.
- September 17: U.S. CPI for August; FOMC economic and rate forecasts; Yellen post-FOMC-meeting press conference.
- September 18: Scotland’s independence referendum.
Copyright © 2014 by Wright Investors’ Service, Inc. The views expressed in this blog reflect those of Wright Investors’ Service, Inc. and are subject to change. Statements and opinions therein are based on sources of information believed to be accurate and reliable, but Wright Investors’ Service, Inc. makes no representations or guarantees as to the accuracy or completeness thereof. These views should not be relied upon as investment advice.