Stocks Close With Mild Gains On Evergrande Uncertainty
4:02 pm Friday, September 24th, 2021
The major indices closed higher in a resilient session, as investors digest another jump in long-term interest rates and contemplate whether to take profits.
The 10-yr yield hit 1.46% earlier today after trading as low as 1.30% yesterday in a move that’s caught some investors off guard. Right now, the 10-yr yield is trading at 1.44%, or three basis points above yesterday’s settlement.
The increase in rates has helped the S&P 500 financials sector (+0.7%), but more directly the SPDR S&P Bank ETF (KBE 52.06, +0.64, +1.2%). The energy sector (+0.9%) is the best performer in the S&P 500, though, while the real estate (-1.1%), health care (-0.5%), and information technology (-0.1%) sectors lag.
Generally, buying interest has been kept in check — evident by no sector trading higher by more than 1.0% — amid a recognition that S&P 500 entered the session up 3.3% from its low on Monday. Sellers haven’t shown much conviction, either, amid a recognition that the S&P 500 has found support at its 50-day moving average (4439).
Looking at individual stocks, Nike (NKE) was down 6% after blaming supply chain issues for its downside revenue guidance. Costco (COST), on the other hand, is being rewarded for weathering the challenging environment with an EPS beat.
Separately, Evergrande’s debt problems remain in the news after the company reportedly failed to repay U.S. creditors yesterday. While interesting, the market continues to relegate the situation to more of a China-specific issue.
