The major averages began the new week on a modestly higher note. The S&P 500 settled higher by 0.3% with seven sectors registering gains, while the Russell 2000 (+1.0%) and Nasdaq Composite (+0.7%) outperformed. For its part, the Dow Jones Industrial Average (+0.1%) was limited to a slim gain as blue chip listings had a tough time keeping pace. 

 

Equity indices climbed from the opening bell with the early advance supported by upbeat action overseas. Furthermore, a slight improvement on the geopolitical scene was also cited for the improved sentiment. Specifically, a ceasefire was agreed upon in Gaza on Sunday, while pro-Russian separatists in east Ukraine also asked for a pause in fighting. 

 

The crisis in Ukraine was in the headlines during the day as conflicting reports about a potential humanitarian mission swirled about. The early reports suggested Ukraine's government agreed to allow a Red Cross-led operation with participation from Russia, Germany, and the United States, but subsequent headlines indicated Kiev never gave permission for Russian involvement. 

 

Despite the advance, today's session lacked clear sector leadership as the consumer staples sector (+0.8%) ended in the lead, while other countercyclical groups underperformed. Meanwhile on the cyclical side, consumer discretionary (+0.4%) and technology (+0.6%) outperformed, while energy (-0.2%) and financials (+0.2%) lagged throughout the session. 

 

Today's leading sector--consumer staples--drew strength from the shares of Sysco (SYY 37.44, +1.17), which rallied 3.2% in reaction to in-line earnings. Peer Dean Foods (DF 15.20, -0.61) was not as fortunate, falling 3.9% in reaction to a bottom-line miss and cautious guidance for the third quarter. In addition, the company withdrew its full-year guidance due to a volatile dairy commodity environment. 

 

Elsewhere among countercyclical sectors, the utilities space (-0.4%) widened its third-quarter loss to 7.0%, while health care (unch) lagged throughout the session. 

 

The health care sector ended on its session low, while the high-beta biotech group ended a bit below its early high. The iShares Nasdaq Biotechnology ETF (IBB 253.21, +1.72) gained 0.7% after being up 1.3% during the first two hours of action. Despite the afternoon slip, the biotech group still ended ahead of the S&P 500 and contributed to the outperformance of the Nasdaq. 

 

The tech-heavy index also received noteworthy support from its top component--Apple (AAPL 95.99, +1.25)--and chipmakers. Apple added 1.3%, while the PHLX Semiconductor Index rose 1.0% with all but two components posting gains. Micron (MU 30.74, +0.70) led the way, climbing 2.3%. 

 

Treasuries alternated between gains and losses before ending little changed. The benchmark 10-yr yield remained at 2.42%. 

 

Participation was well below average with fewer than 585 million shares changing hands at the NYSE. 

 

Tomorrow, the June Job Openings and Labor Turnover Survey will be released at 10:00 ET, while the Treasury Budget for July will cross the wires at 14:00 ET (Briefing.com consensus -$96.00 billion). 

S&P 500 +4.8% YTD 

Nasdaq Composite +5.4% YTD 

Dow Jones Industrial Average UNCH YTD 

Russell 2000 -1.8% YTD

 

Time	Cur.	Imp.	Event	Actual	Forecast	Previous
Tuesday, August 12
07:30	USD		NFIB Small Business Optimism		96.3	95.0
07:45	USD		Chain Store Sales (YoY)			4.5%
07:45	USD		Chain Store Sales (WoW)			0.2%
08:55	USD		Redbook (MoM)			-0.4%
08:55	USD		Redbook (YoY)			4.6%
10:00	USD		JOLTs Job Openings		4.74M	4.64M
11:30	USD		4-Week Bill Auction			0.020%
13:00	USD		3-Year Note Auction			0.992%
14:00	USD		Federal Budget Balance		-96.0B	71.0B
16:30	USD		API Weekly Crude Stock			-5.500M
16:30	USD		API Weekly Distillates Stocks			-0.544M
16:30	USD		API Weekly Gasoline Stock			-3.600M

Earnings Reports for Tuesday, August 12