U.S. Stocks Dip on North Korea Threat as Consumer Shares Advance

How China and the U.S. Could Deal With North Korea

U.S. stocks were mostly steady Tuesday as gains in consumer shares offset losses in utility and energy stocks. Equities ticked lower as a North Korean envoy said the country will proceed with a sixth nuclear test.

The S&P 500 was less than 0.1 percent lower to 2,397 at 4 p.m. in New York. The benchmark was little changed on Monday but still managed to close at a fresh record for the first time since early March. The Dow Jones Industrial Average lost 37 points to 20,976 Tuesday.

  • Nasdaq up 0.3%
  • Consumer discretionary shares up 0.5%, led by gains in Marriott (+6.4%), Under Armour (+4.2%) and Hanesbrands (+4%)
  • Financials drop 0.5% after early gains
  • Utility, telecom and real estate stocks at least 0.4% lower
  • 10-Year Treasury yield up 1 bp to 2.40%
  • Price movers:
    • Up: Marriott, CBOE, Analog Devices, United, Jacobs Engineering all jumped more than 2 standard deviations from 20-day avg price move
    • Down: Sealed Air, Tegna, TransDigm, Dentsply, Kellogg fell more than 2 std devs from avg
  • Volume in S&P 500 about 6.4% below 30-day average
    • Materials shares only group with elevated trading volume
    • Volume movers: Sealed Air, Baxter International, International Flavors & Fragrances, Tegna, Caterpillar all traded with volume at least 2x 30-day average
  • VIX up to 10
    • VIX is near multi-decade lows as U.S. labor-market strength and expanding earnings continue to buoy optimism over future growth, while investor concern about the future of Europe eased following Emmanuel Macron’s presidential victory in France
    • Volatility movers: Mead Johnson, Masco Corp., WW Grainger, Cintas, Ball Corp. have highest put/call volume ratio in the S&P 500
  • POLITICS:
    • North Korea’s ambassador to U.K. says it will proceed with sixth nuclear test, Sky reports; says “ready to turn to ashes any available strategic assets of the U.S.”
    • Moon Jae-in is poised to take power in South Korea as voters sought an end to nine years of conservative rule after the country’s biggest street protests since the 1980s
    • Trump’s top military advisers are urging him to send 3,000- 5,000 more U.S. troops to Afghanistan, a White House official said
  • ECONOMY:
    • Commerce Secretary Wilbur Ross says U.S. 3% growth target not achievable this year: Reuters interview
    • U.S. April Small Business Optimism falls to 104.5; est. 104
    • U.S. job openings rose to 5.743m in March from 5.682m prior month
    • Investors will study comments from Federal Reserve Bank of Minneapolis President Neel Kashkari later Tuesday for any clues on the U.S. central bank’s outlook
  • EARNINGS:
    • After-market Tuesday: Walt Disney Co (DIS US), TripAdvisor Inc (TRIP US), Electronic Arts Inc (EA US), Regency Centers Corp (REG US), Priceline Group Inc/The (PCLN US), News Corp (NWSA US), Microchip Technology Inc (MCHP US), NVIDIA Corp (NVDA US)
    • Pre-market Wednesday: Coty Inc (COTY US), Vulcan Materials Co (VMC US), Mylan NV (MYL US), Cimarex Energy Co (XEC US)

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