Story
Chips Fall While Dow Rallies
September 16, 2024
With this week's much anticipated rate cut on the horizon, a degree of caution gripped the major averages as the Fed's September 18th meeting still looks like a toss-up between a quarter basis point or half basis point cut. Rate sensitive tech stocks which led much of the year's rally, fell back on Monday with the Philadelphia Semiconductor Index losing 70.04 points (-1.41%), as its 50-day MA crossed below its 100-day MA, which did some damage to the NASDAQ. However, the DJIA managed to post a fresh all-time high led by gains from Intel (INTC +6.36%). Sectors which outperformed were led by Utilities (XLU) and Financial (XLF) sectors, all rising more than 1.3% during the session while Consumer Discretionary (XLY) was the lone sector to finish in the red. The DJIA gained 228.30 points (0.55%) and closed at 41622.08. The S&P 500 finished higher by 7.07 points (0.13%) and settled at 5633.09, while the NASDAQ tumbled 91.85 points (-0.52%) to close at 17592.13.
Breadth was positive with advancing issues beating declining issues by 5:2 on the NYSE and 340 units on the NASDAQ. Advancing volume was 71% on the NYSE and 54% on the NASDAQ. VIX was higher by 0.57 points (+3.44%) and settled at 17.13. Crude oil gained $1.90 (2.77%), as the October contract closed at $70.55 a barrel. Gold prices lost $0.30 (-0.01%) and finished at $2610.40 an ounce. Bitcoin (BTC) closed the session at $57,716.50.
Key secondary indexes such as the small-cap Russell 2000 and DJ transportation settled close to a bullish MACD crossover and accompanied by rising momentum which bodes well for the market in the short to intermediate-term. Bets are increasing that the Fed may deliver something other than a 25-basis point cut according to the CME Fed Watch Tool that increased the odds to 61% that a 50-basis point cut may be appropriate to combat recessionary fears.
Earnings releases to watch on Tuesday include: Ferguson Enterprises (FERG).
Tuesday Market Moving Economic Calendar: Retail Sales, Industrial Production, Business Inventories and Housing Market Index.
By Richard Cuvilly
Get a