MARKET SNAPSHOT: S&P 500 Snaps Four-day Losing Streak As Investors Await Tax Overhaul
By Sue Chang and Anora M. Gaudiano, MarketWatch
Lululemon soars after beating quarterly earnings estimates
The main U.S. stock benchmarks closed moderately higher Thursday, with the S&P 500 snapping a four-session losing streak on the back of gains in the technology, industrials and materials sectors. Traders focused on continued progress on tax legislation and looked ahead to the monthly jobs report due Friday.
What are indexes doing?
The S&P 500 index rose 7.71 points, or 0.3%, to 2,636.98, while the Dow Jones Industrial Average added 70.59 points, or 0.3%, to 24,211.48.
The tech-heavy Nasdaq Composite Index outpaced the other benchmarks and was up 36.47 points, or 0.5%, to 6,812.84.
What drove the markets?
Tech stocks made something of a comeback after taking a battering earlier this week. From Friday through Tuesday, the tech-heavy Nasdaq fell 1.6%, with analysts largely blaming the drop on profit-taking after a big rally and on concerns about how the U.S. tax overhaul will impact the tech sector.
Both the House and Senate have passed their own versions of the tax bill and now the two need to bridge their differences and agree on a final bill for President Donald Trump to sign. The Republican-led Senate late Wednesday agreed to begin formal negotiations (https://www.wsj.com/articles/senate-votes-to-begin-tax-overhaul-negotiations-with-house-1512609708) with the House, spurring hopes the final tax overhaul will be completed by a self-imposed deadline of Dec. 22.
Another reason for eyes to turn to Washington was the potential for a U.S. government shutdown. Trump is scheduled to meet congressional leaders on Thursday to discuss a bill to keep the government open. A bill to avoid a shutdown will also be up for a vote in the House on Thursday, after the House Rules Committee on Wednesday put together a temporary funding package.
Read:Here's how the stock market has handled past government shutdowns (http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2017-12-06)
Investors were also looking ahead to the closely watched nonfarm payrolls report out on Friday.
What are strategists saying?
"It's not unusual for investors to move away from tech stocks that had done exceptionally well this year and into the losing sectors, such as retail. But that rotation seems to be not very serious at this point," said Maris Ogg, president at Tower Bridge Advisors.
"We don't think the tech sector is that expensive and as long as they can grow their earnings, their prices should be sustained," Ogg said.
Meanwhile, Frank Cappelleri, a technical strategist at Instinet LLC, pointed out that over the past five years, the S&P 500 has undergone 17 losing streaks of at least four sessions. In the previous 16, excluding the one that ended Wednesday, the index was higher two weeks later 11 times, with average gains of 1.1%.
As for the nonfarm payroll due Friday, Lewis Alexander, chief U.S. economist at Nomura, projected an increase of 180,000 for November -- 175,000 from the private sector and 5,000 from government. Economists surveyed by MarketWatch are projecting an addition of 200,000.
Which stocks were in focus?
Dollar General Corp.(DG) rose 2.8% after the discount-store operator posted revenue that topped expectations.
Lululemon Athletica Inc.(LULU) rallied 6.4% after the apparel retailer late Wednesday reported third-quarter earnings and sales above estimates (http://www.marketwatch.com/story/lululemon-shares-jump-on-earnings-sales-beat-2017-12-06).
Okta Inc.(OKTA) shares rose 2.5% after the identity-management company late Wednesday posted quarterly results that beat forecasts (http://www.marketwatch.com/story/okta-shares-rally-as-results-top-street-revenue-rises-faster-than-sales-expenses-2017-12-06).
Citigroup Inc.(C) shares were down 0.6% after the bank said late Wednesday it's likely to take a $20 billion hit to profits (http://www.marketwatch.com/story/citigroup-likely-to-take-20-billion-hit-from-republicans-tax-plan-2017-12-07) under the new tax plans passed by Congress.
LendingClub Corp.(LC) shares tumbled 15% after the company lowered its outlook for the fourth quarter and delivered a lower-than-expected forecast for next year.
What are data saying about the economy?
Initial U.S. jobless claims (http://www.marketwatch.com/story/us-jobless-claims-fall-to-5-week-low-of-236000-2017-12-07), a way to measure layoffs, fell by 2,000 to 236,000 in the seven days ended Dec 2. Economists surveyed by MarketWatch had forecast claims to total 240,000.
Consumer credit for October is on the docket at 3 p.m. Eastern.
How did other markets fare?
Asian stocks closed mixed, while European equities were mostly higher (http://www.marketwatch.com/story/european-stocks-on-course-to-break-losing-streak-as-betting-shares-catch-a-bid-2017-12-07).
The ICE Dollar Index rose for a fourth straight session. Oil futures rebounded, while gold prices settled lower.
Bitcoin continued its rally, breaking through $16,000 (http://www.marketwatch.com/story/bitcoin-blasts-through-15000-milestone-soars-20-in-24-hours-2017-12-07), just a day after topping the $14,000 level (http://www.marketwatch.com/story/bitcoin-hitting-new-records-tops-200-billion-in-market-capitalization-2017-12-05) for the first time.
Sara Sjolin contributed to this report.
(END) Dow Jones Newswires
December 07, 2017 16:24 ET (21:24 GMT)Copyright (c) 2017 Dow Jones & Company, Inc.