Stock Market Update

[BRIEFING.COM] The S&P 500 increased 0.1% on Monday, as gains in Apple (AAPL 284.00, +4.56, +1.6%) and energy stocks helped the benchmark index close at another record high. The Dow Jones Industrial Average (+0.3%) and Nasdaq Composite (+0.2%) also closed at new records. The Russell 2000 increased 0.1%. 

Price action was muted to start the holiday-shortened trading week, as the market traded with modest gains throughout the session. Leadership from Apple, which had its price target raised to $350 from $325 at Wedbush, was an influential force in the broader market. 

From a sector standpoint, the S&P 500 energy sector (+1.1%) outperformed amid strength in Apache (APA 26.53, +3.91, +17.3%), and the industrials sector (+0.6%) followed suit amid gains in Boeing (BA 337.55, +9.55, +2.9%) and 3M (MMM 178.47, +3.10, +1.8%). Conversely, the utilities (-1.0%) and real estate (-0.5%) sectors declined the most. 

Boeing shareholders reacted positively to Dennis Muilenburg resigning from his positions as CEO and Board director. 3M benefited from JP Morgan upgrading the stock to Neutral from Underweight. Apache pleased investors with a 50-50 oilfield venture with France's Total (TOT 55.04, +0.67, +1.2%). 

Although not market-moving, China's decision to lower import tariff rates on approximately 850 commodity products, effective Jan. 1, helped support the positive sentiment. On a related note, President Trump said the Phase One deal should be signed "very shortly." The market expects the deal to be signed in early January. 

In M&A activity, Cincinnati Bell (CBB 10.45, +2.73, +35.4%) agreed to be acquired by Brookfield Infrastructure (BIP 49.14, +0.78, +1.6%) for $2.6 billion in cash. Sports betting company DraftKings will become a public company through its combination agreement with Diamond Eagle Acquisition Corp (DEAC 10.84, +0.67, +6.6%).

U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased two basis points to 1.65%, and the 10-yr yield increased two basis points to 1.94%. The U.S. Dollar Index finished flat at 97.67. WTI crude increased 0.3%, or $0.15, to $60.53/bbl.

Reviewing Monday's economic data, which included New Home Sales and Durable Goods Orders for November:

• New home sales in November increased 1.3% m/m to a seasonally adjusted annual rate of 719,000 units (Briefing.com consensus 735,000) from a downwardly revised 710,000 (from 733,000) in October. On a yr/yr basis, new home sales were up 16.9%.
  • The key takeaway from the report is that it appears as if new home sales, like existing home sales, were crimped in November by a lack of available supply at more affordable price points.
• Total durable goods orders declined 2.0% m/m (Briefing.com consensus +1.4%) following a downwardly revised 0.2% increase (from 0.6%) in October. Excluding transportation, durable goods orders were unchanged, as expected, following a downwardly revised 0.3% increase (from 0.6%) in October.
  • The key takeaway from the report is that orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- were up just 0.1%, which left them up 0.7% yr/yr. Shipments of those goods, which factor into GDP computations, were down 0.3% from October.

Investors will not receive any economic on Tuesday, which will be a half-day of trading (stock market will close at 1:00 p.m. ET).

• Nasdaq Composite +34.8% YTD
• S&P 500 +28.6% YTD
• Russell 2000 +24.1% YTD
• Dow Jones Industrial Average +22.4% YTD