Sarhan in CNBC: Dow up 100 points as Goldman gains; dollar in focus

Monday, May 2, 2016 2:37pm

U.S. stocks traded higher Monday, the first trading day of the month, with consumer discretionary and consumer staples leading advancers.

The Dow Jones industrial average traded about 100 points higher, as Goldman Sachs contributed most of the gains.

Apple, the biggest weight on the blue chips index, extended recent declines to weigh on the Nasdaq composite, which struggled to hold opening gains. The Nasdaq posted its first seven-day losing streak Friday since an eight-day losing streak ended Jan. 11.

Shares of Apple held about 1 percent lower in afternoon trade, tracking for its first eight-day losing streak since 1998. The stock lost about 14 percent in April, its worst month since January 2013.

A 7.5 percent decline in shares of Chinese internet giant Baidu also weighed on the Nasdaq.

S&P 500 held higher, with consumer discretionary and consumer staples leading advancers.

“We saw some selling Thursday and Friday so just a bit of a rebound this morning,” said Adam Sarhan, CEO of Sarhan Capital.

Traders also noted some support for stocks from weakness in the U.S. dollar index.

The index hit its lowest since Aug. 24, while the euro topped $1.15 to its highest since Aug. 26, 2015.

The dollar index last traded about 0.46 percent lower, with the euro near $1.153 and the yen at 106.42 yen against the greenback as of 1:02 p.m. ET.

Gold hit a high of $1,306 earlier in the session, its highest level since Jan. 22, 2015.

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In the Treasury market, the 2-year yield was a touch lower around 0.78 percent and the 10-year yield higher near 1.85 percent.

In economic news, ISM manufacturing for April was 50.8, down from 51.8 in March. Construction spending for March rose 0.3 percent.

“It’s going to take time for manufacturing to turn the corner,” said Ryan Sweet, director of real-time economics at Moody’s Analytics.

“ISM still north of neutral threshold, 50, is somewhat encouraging,” he said.

The final Markit U.S. manufacturing PMI fell to 50.8 in April from 51.5 in March.

The major economic data for the week is the nonfarm payrolls report, due Friday.

“I think the market is now going to obviously shift to the economic data and probably less emphasis on earnings as the earnings season winds down,” said Peter Cardillo, chief market economist at First Standard Financial.

Over the weekend, China’s official manufacturing PMI was 50.1 in April, down from 50.2 the prior month, while the services read was 53.5 in April, compared with 53.8 in March.

In afternoon trade, the Dow Jones industrial average traded up 78 points, or 0.45 percent, to 17,852, with Goldman Sachs leading advancers and Apple the greatest laggard.

The S&P 500 rose 9 points, or 0.44 percent, to 2,074, with consumer discretionary leading eight sectors higher and energy and information technology the decliners.

The Nasdaq composite rose 10 points, or 0.2 percent, to 4,786.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 15.2.

About three stocks advanced for every two decliners on the New York Stock Exchange, with an exchange volume of 445 million and a composite volume of 1.9 billion.

U.S. crude oil futures for June delivery declined $1.11 to $44.81 a barrel on the New York Mercantile Exchange.

Gold futures for June delivery gained $5.80 to $1,296.30 an ounce as of 1:07 p.m. ET.

On tap this week:


Earnings: AIG, Anadarko Petroleum, General Growth Properties, Vornado Realty, Sturm Ruger, Tenet Healthcare, Texas Roadhouse, Owens-Illinois

2 p.m. Senior loan officer survey

5:30 p.m. San Francisco Fed President John Williams, Milken Institute


Earnings: Pfizer, Halliburton, HSBC, Archer Daniels Midland, Clorox, Estee Lauder, Hyatt, Malinckrodt, Sprint, Starwood Hotels, Valero Energy, Vulcan Materials, GrubHub, NY Times, Avis Budget, CBS, Illumina, Mylan Labs, Western Union, Etsy, Glu Mobile, Live Nation Entertainment, Match Group, Newfield Exploration, Noodles & Co., Papa John’s, Potbelly, Zillow

Vehicle sales

10:30 a.m. Cleveland Fed President Loretta Mester

7 p.m. Atlanta Fed President Dennis Lockhart


Earnings: AB InBev, Priceline, Royal Dutch Shell, Siemens, Time Warner, Humana, IntercontinentalExchange, Zoetis, Cedar Fair, Kate Spade, Shopify, Shutterstock, Virtu Financial,, 21st Century Fox, MetLife, Allstate, Fitbit, Kraft Heinz, Murphy Oil, Tesla Motors, Transocean, Whole Foods, Eldorado Gold, GoDaddy, Weight Watchers, Yamana Gold, Zynga

7 a.m.: Mortgage applications

8:15 a.m. ADP employment

8:30 a.m. International trade; productivity and costs

9:45 a.m. Services PMI

10 a.m. ISM nonmanufacturing; factory orders

10:30 a.m.: Oil inventories

6:30 p.m. Minneapolis Fed President Neel Kashkari


Earnings: Alibaba, Merck, Chesapeake Energy, Discovery Communications, Kellogg, Regeneron, MGM Resorts, Scripps Networks Interactive, AMC Networks, Avon Products, Fortress Investment, SeaWorld, Time, Activision Blizzard, Cerner, Motorola Solutions, News Corp., Square, Tableau Software, Dreamworks Animation, El Pollo Loco, FireEye, Herbalife, TrueCar, Wingstop, Yelp

7:30 a.m.: Challenger Job-Cut report

8:30 a.m. Initial claims

10:30 a.m.: Natural gas inventories

11:50 a.m. St. Louis Fed President James Bullard

7:15 p.m. Atlanta Fed’s Lockhart, Dallas Fed President Rob Kaplan, St. Louis Fed’s Bullard, San Francisco Fed’s Williams at Hoover Conference


Earnings: ArcelorMittal, Cigna, Willis Towers Watson, Madison Square Garden, Berkshire Hathaway

8:30 a.m. Employment report

1 p.m.: Oil rig count

3 p.m.: Consumer credit

*Planner subject to change.


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