Stocks closed mixed on Wednesday as the market’s rally petered out. Out of all major indexes, only the Dow Jones Industrial Average (DJIA) locked in a gain, continuing its longest string of daily wins since December. Meanwhile, the S&P 500 (SPX) ended the day unchanged, while the Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) saw small declines.
Only four of the S&P 500’s 11 sectors advanced, with the Utilities leading the gains by a large margin. After a strong showing in April, when the Utilities were the only ones to rise, the sector has continued marching onward, increasing its lead over the SPX. Although the S&P 500 is less than 1.5% below its recent high, the strong, continued outperformance of a strictly defensive sector like Utilities may not bode well for the rally’s endurance. However, a drop in the volatility index VIX suggests a positive outlook for the stock markets.
There was no major news moving the markets, with the only points of interest provided by earnings reports. However, the earnings season is winding down, and investors’ attention is locking on the crucial economic reports ahead. Next week, the CPI and the PPI reports are expected to trigger a fresh bout of anxiety over the Federal Reserve’s policy direction.
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