Equities began the first session of May near their flat lines amid the lack of leadership from overseas as most global markets were closed for Labor Day. Despite the quiet open, small caps were active from the get-go as the Russell 2000 retreated as much as 1.1% during the first hour of action. The index halted its slide at the 200-day moving average (1113.73), which has been acting as an area of support since mid-April.
Meanwhile, the S&P 500 spent the bulk of the afternoon within four points of its flat line as individual sectors traded in mixed fashion. Most notably, consumer discretionary (+0.4%) and utilities (+0.3%) outperformed throughout the session, with the utilities sector extending its 2014 advance to 14.0%.
On the fixed income side, Treasuries rallied throughout the session, which was a bit perplexing. The benchmark 10-yr yield fell to 2.61%, settling not far above its lowest close of the year (2.58%).
That move was supported in part by the weaker than expected initial claims report, but the interesting thing was that it held up in the wake of the stronger than expected ISM Index and in front of the April employment report on Friday. The continued buying interest in the benchmark note, which has been seen all year, isn’t something one would expect to see if there was a strong belief that the economy is getting ready to hit escape velocity.
Participation was a bit below average as 682 million shares changed hands at the NYSE floor.