Updated: 04-23-2018

The Market at 04:30PM ET
Dow: -14.25… | Nasdaq: -17.52… | S&P: +0.15…
NASDAQ Vol: 1.73 bln… Adv: 1176… Dec: 1630…
NYSE Vol: 730.0 mln… Adv: 1308… Dec: 1584…

Moving the Market

Treasury yields continue to rise; 10-yr approaches 3.0% for first time in over four years

Top-weighted technology sector underperforms, with chipmakers leading the retreat

Caution ahead of Alphabet (GOOG) earnings -- which will be released tonight

Sector Watch
Strong: Consumer Discretionary, Energy, Health Care, Telecom Services, Real Estate
Weak: Materials, Technology, Consumer Staples

04:30PM ET

[BRIEFING.COM] The stock market wobbled on Monday as investors braced for a busy week of corporate earnings and kept a close eye on Treasury yields, which rose to multi-year highs. The Nasdaq Composite (-0.3%) and the Dow Jones Industrial Average (-0.1%) each finished a step lower, notching their third and fourth straight losses, respectively, while the S&P 500 (unch) eked out a slim win, closing just a tick above its flat line. Volume was light once again on Monday, with just 730 million shares changing hands at the New York Stock Exchange (50-day moving average is 897 million).

Treasury yields were higher from the jump on Monday, with the yield on the benchmark 10-yr note nearly touching the psychologically important 3.0% mark in overnight trade -- getting as close as 2.998%. The 10-yr yield eventually settled two basis points above its Friday close at 2.97% -- which is its highest close in more than four years -- while the yield on the 2-yr note finished three basis points above its Friday close at 2.47% -- which is its highest close in more than seven years.

Stocks held up well considering the increased, "risk-free" return on U.S. Treasuries and considering the rise in the U.S. dollar -- which, by itself, doesn't bode well for foreign demand of U.S. goods. The U.S. Dollar Index rose 0.7% to 90.68 -- its highest close since mid-January. The greenback added 0.4% against the euro (1.2209) and 1.0% against the yen (108.72).

The S&P 500 sector standings were pretty evenly mixed between green and red, with six groups advancing and five declining. However, outside a 1.1% jump in the lightly-weighted telecom services sector, sector movement was modest, with no group adding/losing more than 0.6%. The energy sector (+0.6%) showed relative strength as WTI crude futures climbed 0.5% to $68.76 per barrel, while the top-weighted technology sector (-0.4%) was the weakest performer as chipmakers weighed; the PHLX Semiconductor Index dropped 1.3%.

In corporate news, Dow components Caterpillar (CAT 153.99, +0.74, +0.5%), Merck (MRK 60.25, +1.42, +2.4%), Exxon Mobil (XOM 79.57, +0.57, +0.7%), and Verizon (VZ 48.66, +0.76, +1.6%) all rose after receiving ratings upgrades, Kimberly-Clark (KMB 98.52, -1.51, -1.5%) slid after revealing that its first quarter margins were significantly impacted by commodity inflation, and Hasbro (HAS 86.12, +3.31, +4.0%) ended higher despite initially dropping as much as 4.6% after reporting worse-than-expected profits and sales for the first quarter.

Monday's economic data was limited to the Existing Home Sales report for March, which came in better-than-expected; existing home sales increased 1.1% month-over-month to an annualized rate of 5.60 million units (Briefing.com consensus 5.57 million). The key takeaway from the report remains the same: notable supply constraints continue to act as a drag on overall sales. The limited inventory -- and the high prices on available inventory -- is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are going to feel added affordability pressures from rising mortgage rates.

Looking ahead to Tuesday's data, investors will receive the FHFA Housing Price Index for February (Briefing.com consensus +0.5%), the S&P Case-Shiller Home Price Index for February (Briefing.com consensus +6.4%), New Home Sales for March (Briefing.com consensus 631K), and the Conference Board's Consumer Confidence Index for April (Briefing.com consensus 126.1).

  • Nasdaq Composite: +3.3% YTD
  • Russell 2000: +1.7% YTD
  • S&P 500: -0.1% YTD
  • Dow Jones Industrial Average: -1.1% YTD
Dow: -14.25… | Nasdaq: -17.52… | S&P: +0.15…
NASDAQ Adv/Dec 1176/1630. …NYSE Adv/Dec 1308/1584.

03:35PM ET

[BRIEFING.COM] Commodities moved lower overall today, evidenced by a 0.7% decline in the Bloomberg Commodity Index, which settled at 89.19.

  • Energy:
    • June Crude Oil futures rose $0.36 (0.53%) to $68.76/barrel
    • May Natural Gas settled $0.08 higher (3.01%) at $2.74/MMBtu
  • Metals:
    • June gold settled today's session down $24.40 (1.81%) at $1324.2/oz
    • May silver settled today's session $0.01 lower (3.83%) at $16.59/oz
    • May copper settled $0.01 lower (0.32%) at $3.11/lb

A rise in U.S. Treasury yields increased demand for the dollar, which, in turn, weighed on the commodity market; the U.S. Dollar Index jumped 0.7%.

Dow: -39.78… | Nasdaq: -21.09… | S&P: -2.22…
NASDAQ Adv/Dec 871/1485. …NYSE Adv/Dec 1212/1714.

02:55PM ET

[BRIEFING.COM] Equity indices are drifting near their session lows moving into the final hour of trading, showing losses between 0.3% and 0.5%.

There are quite a few notable names in the next batch of earnings reports; Alphabet (GOOG 1066.34, -6.62) will be reporting its quarterly results following today's closing bell, while Verizon (VZ 48.48, +0.58), United Tech (UTX 122.94, -0.14), Caterpillar (CAT 152.98, -0.37), Lockheed Martin (LMT 356.42, +4.43), 3M (MMM 215.75, -2.00), Coca-Cola (KO 43.74, 0.00), Travelers (TRV 137.08, +0.24), and Eli Lilly (LLY 79.71, +0.65) are all set to report tomorrow morning.

This week will be the busiest of the first quarter earnings season, with more than one third of S&P 500 companies on the docket.

Dow: -111.90… | Nasdaq: -47.35… | S&P: -10.60…
NASDAQ Adv/Dec 725/1722. …NYSE Adv/Dec 1018/1900.

02:30PM ET

[BRIEFING.COM] The major averages have made new session lows since our last update as the S&P 500 dipped into the red, alongside the Dow and the Nasdaq. The trio now sport losses between 0.3% and 0.5% apiece.

Heavily-weighted NASDAQ 100 constituents Apple (AAPL 164.51, -1.21, -0.7%), Netflix (NFLX 318.31, -9.46, -2.9%), Amazon (AMZN 1,518.58, -8.90, -0.6%), NVIDIA (NVDA 223.40, -5.31, -2.3%), and Micron (MU 48.96, -1.66, -3.3%) drag the index lower.

A tweet from the Toronto Police in last half hour state that a white van has struck 'numerous' pedestrians. The report preceded a trim to today's gains in the S&P/TSX Composite which now stands about +0.6% higher at about 15,579. The Canadian dollar also took a modest hit (against the U.S. dollar) following the headlines, but currently sits near its previous marks down 0.6% at 1.2846.

Dow: -79.22… | Nasdaq: -37.26… | S&P: -5.30…
NASDAQ Adv/Dec 826/1680. …NYSE Adv/Dec 1078/1828.

02:00PM ET

[BRIEFING.COM] The major averages are little changed since our last update.

A nearly 1.1% fall in gold futures has the yellow metal settled near one-month lows at $1,324.00/oz on Monday. A few short weeks ago the precious metal was at a high mark, but rising yields and strength in the dollar have brought gold back slightly.

To that end, treasury yields are seeing a strong move higher today as the yield on the benchmark 10-yr bond is up two basis points at 2.98% with the 2-yr yield up one basis point at 2.47%. The continuing rise in yields has helped push the U.S. Dollar Index to near three-month highs, up about 0.7% to 90.93 at this point.

Dow: -9.69… | Nasdaq: -1.47… | S&P: +1.08…
NASDAQ Adv/Dec 1021/1554. …NYSE Adv/Dec 1364/1538.

01:30PM ET

[BRIEFING.COM] The major U.S. indices are currently trading mixed as stocks lack conviction ahead of a busy week of earnings reports. 

A look inside the Dow Jones Industrial Average shows that Goldman Sachs (GS 248.61, -3.35), Procter & Gamble (PG 73.05, -0.75), & Wal-Mart (WMT 86.49, -0.49) are underperforming.

Conversely, Merck & Co. (MRK 60.30, +1.47) is the best-performing Dow component after being upgraded to Buy from Neutral at Goldman and added to their Conviction Buy List.

Effectively flat on the day, the DJIA is currently up 1.5% this month. 

Dow: -9.86… | Nasdaq: -6.84… | S&P: +0.75…
NASDAQ Adv/Dec 980/1642. …NYSE Adv/Dec 1296/1593.

01:00PM ET

[BRIEFING.COM] The stock market is trying to break a two-session losing streak today, but buyers have lacked conviction, resulting in some choppy trading. The S&P 500 is currently flat, hovering near the bottom of its daily range, while the Nasdaq and the Dow are down 0.1% apiece.

Investors are keeping a close watch on Treasury yields today, which have risen to fresh multi-year highs. The benchmark 10-yr yield is up three basis points at 2.98% -- its highest level since January 2014 -- after nearly touching 3.0% overnight, and the 2-yr yield is up three basis points at 2.47% -- its highest level since August 2008. The rise in yields has helped underpin the U.S. Dollar Index, which is up 0.6% at 90.89 -- its best level since mid-January.

Four of the eleven S&P 500 sectors are higher this afternoon, but movement has been pretty limited. On the upside, the lightly-weighted telecom services sector is the top performer with a gain of 0.7%, followed by the consumer discretionary and health care sectors, which are up just 0.4% apiece. On the downside, materials is the worst-performing sector with a modest loss of 0.2%.

In earnings news, Hasbro (HAS 65.44, +2.61) was down as much as 4.6% earlier in the session after reporting worse-than-expected profits and sales for the first quarter this morning, but has since bounced back and is currently up 3.1%. Meanwhile, Alaska Air (ALK 69.28, +3.89) is up 6.0% after beating bottom-line estimates for Q1.

Looking ahead, tech giant Alphabet (GOOG 1075.22, +2.27) -- the parent company of Google -- will report earnings following today's closing bell, and many other notable names will be reporting later this week -- which is the busiest week of the first quarter earnings season. That realization has left some investors on the sidelines today.

Today's economic data was limited to the Existing Home Sales report for March, which came in better-than-expected; existing home sales increased 1.1% month-over-month to an annualized rate of 5.60 million units (Briefing.com consensus 5.57 million). The key takeaway from the report remains the same: notable supply constraints continue to act as a drag on overall sales. The limited inventory -- and the high prices on available inventory -- is crimping affordability, particularly for first-time buyers; moreover, all prospective buyers are going to feel added affordability pressures from rising mortgage rates.

Dow: -6.93… | Nasdaq: -3.18… | S&P: +2.07…
NASDAQ Adv/Dec 989/1633. …NYSE Adv/Dec 1292/1578.

12:25PM ET

[BRIEFING.COM] The S&P 500 has been slipping as of late, cutting its gain to 0.2% from 0.4%.

Shares of Alaska Air (ALK 69.88, +4.54) are up 6.9% today, hitting their best level in three months, after the airline reported better-than-expected first quarter earnings this morning. Other airlines have followed Alaska higher, pushing the U.S. Global Jets ETF (JETS 31.97, +0.21) up 0.7%.

In Europe, the major bourses opened the week on a positive note, finishing with gains between 0.3% and 0.5%.

Dow: +1.29… | Nasdaq: +16.31… | S&P: +5.21…
NASDAQ Adv/Dec 1175/1486. …NYSE Adv/Dec 1372/1492.

12:00PM ET

[BRIEFING.COM] The tech-heavy Nasdaq Composite is outperforming today, currently sporting a gain of 0.5%.

Influential Nasdaq components like Apple (AAPL 166.42, +0.70), Microsoft (MSFT 95.80, +0.79), Facebook (FB 167.68, +1.40), Alphabet (GOOG 1075.79, +2.83), and Amazon (AMZN 1535.93, +9.89) are all higher today, holding gains between 0.3% and 0.9%.

Chipmakers -- which are well-represented in the Nasdaq -- are lagging a bit though, evidenced by the flat performance of the PHLX Semiconductor Index. Micron (MU 49.65, -0.96) is showing particular weakness, down 1.9%.

Dow: +31.97… | Nasdaq: +35.04… | S&P: +9.19…
NASDAQ Adv/Dec 1386/1291. …NYSE Adv/Dec 1524/1326.

11:25AM ET

[BRIEFING.COM] The S&P 500 has jumped to a fresh session high in recent trading, extending its gain to 0.4%. The Dow, meanwhile, is up 0.2%.

Several Dow components were upgraded this morning, including Caterpillar (CAT 154.56, +1.31), Exxon Mobil (XOM 79.13, +0.14), Merck (MRK 59.65, +0.82), and Verizon (VZ 48.27, +0.37); shares of those four companies are currently up between 0.2% and 1.4%. Caterpillar, Exxon, and Verizon are all scheduled to report earnings this week, while Merck is scheduled to deliver its quarterly results next week.

Alphabet (GOOG 1080.14, +7.18), meanwhile, will be the first giant to report this week, with its results coming after today's closing bell.

Dow: +35.12… | Nasdaq: +45.62… | S&P: +10.73…
NASDAQ Adv/Dec 1490/1218. …NYSE Adv/Dec 1585/1230.

10:55AM ET

[BRIEFING.COM] Stocks are drifting near their unchanged marks this morning as investors demonstrate a lack of conviction.

The consumer discretionary, technology, health care, utilities, telecom services, and real estate sectors are in the green, sporting gains between 0.2% and 0.4%, while the financials, energy, materials, and consumer staples groups are in the red, holding losses between 0.2% and 0.3%. The industrial sector is flat.

In the bond market, the benchmark 10-yr yield is still on track for its highest close in more than four years, but is down from its overnight high; the 10-yr yield is two basis points above its Friday close and two basis points below its overnight high, hovering at 2.97%.

Dow: -19.59… | Nasdaq: +27.18… | S&P: +4.67…
NASDAQ Adv/Dec 1419/1360. …NYSE Adv/Dec 1416/1347.

10:30AM ET

[BRIEFING.COM] Commodities are mostly lower as the US Dollar index (+0.5%) breaks out to a three-month high. The Bloomberg Commodity index is down 1%.

Industrial metals are getting hit after the US Treasury said it would push back implementation of the sanctions against large Russian-owned Rusal, easing supply concerns. Aluminum futures are down over 7%, below $2,300 while Palladium is down 6% and Nickel is down 5%.

Precious Metals are lower in the face of the strong dollar. June Gold futures are down 1% ($14.00) at $1,324.00 while May silver futures (which also have an industrial component) are down 3% ($0.50) at $16.66.

June WTI crude oil futures are down 1.4% or $0.98 at $67.42/barrel. June natural gas futures are up less than a penny 0.1% at $2.77/MMBtu.

Elsewhere in the commodity space, orange juice and coffee futures are both up over 1%.

Dow: +11… | Nasdaq: +19.17… | S&P: +4.7…
NASDAQ Adv/Dec 1329/1259. …NYSE Adv/Dec 1457/1406.

10:05AM ET

[BRIEFING.COM] Equity indices have slipped to their flat lines in recent trading, giving back their modest opening gains.

Just in, existing home sales increased 1.1% in March to an annualized rate of 5.60 million units (Briefing.com consensus 5.57 million). The February reading was revised to 5.54 million (from 5.38 million).

Dow: +16.62… | Nasdaq: +4.57… | S&P: +3.71…
NASDAQ Adv/Dec 1379/1413. …NYSE Adv/Dec 1380/1288.

09:40AM ET

[BRIEFING.COM] The major averages are modestly higher in the opening minutes, sporting gains of around 0.2% apiece.

Most sectors are in positive territory, but gains have been limited; no group is up more than 0.4%. The energy sector (-0.4%) shows relative weakness, while the industrials (+0.4%) and technology (+0.3%) sectors are exhibiting relative strength.

As a reminder, Existing Home Sales for March (Briefing.com consensus 5.57 million) will be released at 10:00 AM ET.

Dow: +40.57… | Nasdaq: +17.65… | S&P: +3.70…
NASDAQ Adv/Dec 1444/1279. …NYSE Adv/Dec 1329/1240.

09:10AM ET
[BRIEFING.COM] S&P futures vs fair value: +7.00. Nasdaq futures vs fair value: +24.30.

The stock market is on course for a modestly higher open, as the S&P 500 futures are trading seven points, or 0.3%, above fair value.

Treasury yields have come down from earlier levels, but are still hovering near multi-year highs. The yield on the benchmark 10-yr Treasury note, for instance, was up at 2.996% overnight, but has since come down to 2.968% -- which still puts it two basis points above Friday's close and on track for its highest close since January 2014.

Dollar demand has increased amid the rise in Treasury yields, sending the U.S. Dollar Index higher by 0.4% to 90.44 -- its highest level in more than seven weeks.

In corporate news, shares of Hasbro (HAS 79.00, -3.81) are down 4.6% in pre-market trading after the toymaker missed earnings and revenue estimates for the first quarter. Conversely, shares of Caterpillar (CAT 155.50, +2.25) are up 1.5% following an upgrade at Citigroup, and shares of Merck (MRK 60.18, +1.35) are up 2.3% following an upgrade at Goldman -- which also put the company on its 'Conviction Buy List'. Alphabet (GOOG 1077.97, +5.01) will report its quarterly results following today's close.

On the data front, today's lone economic report -- Existing Home Sales for March (Briefing.com consensus 5.57 million) -- will be released at 10:00 AM ET.


08:50AM ET
[BRIEFING.COM] S&P futures vs fair value: +7.30. Nasdaq futures vs fair value: +26.80.

The S&P 500 futures are trading seven points, or 0.3%, above fair value.

Equity indices in the Asia-Pacific region began the week on a modestly lower note while markets in Southeast Asia underperformed as U.S. Treasury yields continued climbing. Over the weekend, North Korea announced that it will stop nuclear and ICBM testing. While the news represents a positive turn, it should be noted North Korea is claiming that recent tests were sufficient to prove the effectiveness of its weapons. (Editor's note: an earlier comment indicated North Korea's pledge to cease nuclear testing was contingent on the removal of U.S. forces from the Korean Peninsula. That is not the case and the comment has been corrected to exclude that reference). Separately, China's Defense Minister Wei Fenghe said that Beijing is ready to provide security guarantees for the One Belt, One Road project. China's Ministry of Commerce acknowledged that U.S. Treasury Secretary Steven Mnuchin expressed desire to travel to Beijing to negotiate trade issues.

  • In economic data:
    • Japan's April Manufacturing PMI 53.3 (expected 53.4; last 53.1)
    • Singapore's March CPI +0.2% year-over-year (expected 0.5%; last 0.5%)
    • Hong Kong's March CPI +2.6% year-over-year (last 3.1%)

---Equity Markets---

  • Japan's Nikkei shed 0.3%. Alps Electric, SUMCO, TDK, Nikon, Daikin Industries, Trend Micro, Dainippon Screen Manufacturing, and Fast Retailing lost between 0.9% and 2.3%. On the upside, Dai-ichi Life Insurance, Komatsu, J Front Retailing, Shizuoka Bank, and Matsui Securities gained between 1.1% and 4.1%.
  • Hong Kong's Hang Seng lost 0.5%. Apple suppliers Sunny Optical Tech and AAC Technologies surrendered 6.9% and 1.9%, respectively. Financials like Hang Seng Bank, ICBC, Bank of China, and China Life Insurance lost between 0.3% and 0.8%.
  • China's Shanghai Composite slipped 0.1%. Tianjin Capital Environmental Protection Group, Inner Mongolia First Machinery Group, Avicopter, Shede Spirits, and Shanghai Jinjiang International Hotels Development posted losses between 7.3% and 10.0%.
  • India's Sensex added 0.1%. Financials like IndusInd Bank, Yes Bank, Kotak Mahindra Bank, SBI, and AXIS Bank rose between 0.1% and 3.6% while peers ICICI Bank and HDFC Bank lost 0.9% and 1.4%, respectively.

Major European indices trade little changed. French President Emmanuel Macron is making an official State visit to Washington. The two leaders will dine at George Washington's Mount Vernon estate tonight. European Commission Vice President Vadis Dombrovskis said that eurozone creditors are preparing a debt relief offer for Greece. Mr. Dombrovskis added that some relief might be offered up front with other relief measures would be unlocked after a delay. In Italy, the center-right alliance won a small regional vote in Molise. Keep in mind that a coalition deal at the national level remains elusive.

  • In economic data:
    • Eurozone April Manufacturing PMI 56.0 (expected 56.6; last 56.6) and Services PMI 55.0 (expected 54.8; last 54.9)
    • Germany's April Manufacturing PMI 58.1 (expected 57.6; last 58.2) and Services PMI 54.1 (expected 53.9; last 53.9)
    • France's April Manufacturing PMI 53.4, as expected (last 53.7) and Services PMI 57.4 (expected 56.6; last 56.9)

---Equity Markets---

  • UK's FTSE is flat. Consumer names like GKN, Compass, Dixons Carphone, Diageo, Kingfisher, Unilever, Next, and Associated British Foods show losses between 0.7% and 1.2%. On the upside, financials like Direct Line Insurance, Old Mutual, Lloyds Banking, and RBS are up between 0.2% and 1.6%.
  • Germany's DAX is up 0.2%. Fresenius, Henkel, Vonovia, Linde, and Bayer are down between 0.8% and 3.5% while Deutsche Bank, Lufthansa, Allianz, and Commerzbank hold gains between 0.5% and 1.2%.
  • France's CAC is higher by 0.2%. Consumer names like Pernod Ricard, Danone, L'Oreal, and Carrefour are down between 0.5% and 2.7%. Conversely, STMicroelectronics, TechnipFMC, Total, BNP Paribas, Credit Agricole, and AXA are up between 0.5% and 0.9%.

08:28AM ET
[BRIEFING.COM] S&P futures vs fair value: +5.80. Nasdaq futures vs fair value: +22.50.

The S&P 500 futures are trading six points, or 0.2%, above fair value.

Stocks have had a positive month overall, evidenced by the 1.1% month-to-date rise in the S&P 500. The energy sector has led this month's advance, surging 8.7%, followed by the materials sector, which is up 3.6% for the month. Five other sectors are also in the green for the month, but none hold a gain of more than 1.7%.

On the downside, consumer staples is the worst-performing sector with a month-to-date loss of 4.4%. Three other groups are also in the red for the month, showing losses between 0.4% and 2.9%.


08:00AM ET
[BRIEFING.COM] S&P futures vs fair value: +1.00. Nasdaq futures vs fair value: +9.50.

The stock market enters the week on a two-session skid, hoping that some good earnings news can lure buyers away from the sidelines. Equity futures are currently pointing towards a flat open, with the S&P 500 futures trading just one point above fair value.

More than one third of S&P 500 companies are set to report their quarterly results this week, making it the busiest week of the first quarter earnings season. There are quite a few tech-related names on the calendar, including Alphabet (GOOG) -- which will report tonight -- Facebook (FB), Qualcomm (QCOM), Visa (V), PayPal (PYPL), eBay (EBAY), and Twitter (TWTR) -- which will report on Wednesday -- and Amazon (AMZN), Microsoft (MSFT), and Intel (INTC) -- which will report on Thursday.

As for non-tech names, Caterpillar (CAT), 3M (MMM), and Coca-Cola (KO) will report on Tuesday, Boeing (BA), Chipotle Mexican Grill (CMG), and Ford (F) will report on Wednesday, UPS (UPS) and Starbucks (SBUX) will report on Thursday, and energy giants Exxon Mobil (XOM) and Chevron (CVX) will report on Friday.

There's also several notable pieces of economic data due out this week, including Existing Home Sales for March (Briefing.com consensus 5.57 million) -- which will be released at 10:00 AM ET this morning -- New Home Sales for March (Briefing.com consensus 631K) -- which will be released on Tuesday -- Durable Orders for March (Briefing.com consensus 1.9%) -- which will be released on Thursday -- and the advance reading of first quarter GDP (Briefing.com consensus 2.1%) -- which will be released on Friday.

U.S. Treasuries are under pressure this morning, sending yields to multi-year highs across the curve. The benchmark 10-yr yield, for instance, is currently up three basis points at 2.98%, which is its highest level since January 2014. Meanwhile, the 2-yr yield is up three basis points at 2.47% -- its highest level since August 2008.

In currencies, the U.S. Dollar Index is up 0.4% at 90.47 -- its best level in more than seven weeks.

In U.S. corporate news:

  • Caterpillar (CAT 155.39, +2.14): +1.4% after shares were upgraded to 'Buy' from 'Neutral' at Citigroup.
  • Merck (MRK 60.03, +1.20): +2.0% after shares were upgrade to 'Buy' from 'Neutral' at Goldman; added to 'Conviction Buy List'.
  • Kimberly-Clark (KMB 101.97, +1.94): +1.9% after reporting better-than-expected earnings and revenues for Q1 and raising its sales guidance for FY18.
  • Hasbro (HAS 72.26, -6.55): -7.9% after missing earnings and revenue estimates for the first quarter.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a modestly lower note while markets in Southeast Asia underperformed as U.S. Treasury yields continued climbing. Japan's Nikkei -0.3%, Hong Kong's Hang Seng -0.5%, China's Shanghai Composite -0.1%, India's Sensex +0.1%.
    • In economic data:
      • Japan's April Manufacturing PMI 53.3 (expected 53.4; last 53.1)
      • Singapore's March CPI +0.2% year-over-year (expected 0.5%; last 0.5%)
      • Hong Kong's March CPI +2.6% year-over-year (last 3.1%)
    • In news:
      • Over the weekend, North Korea announced that it will stop nuclear and ICBM testing. While the news represents a positive turn, it should be noted North Korea is claiming that recent tests were sufficient to prove the effectiveness of its weapons. (Editor's note: an earlier comment indicated North Korea's pledge to cease nuclear testing was contingent on the removal of U.S. forces from the Korean Peninsula. That is not the case and the comment has been corrected to exclude that reference).
      • China's Defense Minister Wei Fenghe said that Beijing is ready to provide security guarantees for the One Belt, One Road project. China's Ministry of Commerce acknowledged that U.S. Treasury Secretary Steven Mnuchin expressed desire to travel to Beijing to negotiate trade issues.
  • Major European indices trade little changed. UK's FTSE -0.1%, Germany's DAX -0.1%, France's CAC -0.1%.
    • In economic data:
      • Eurozone April Manufacturing PMI 56.0 (expected 56.6; last 56.6) and Services PMI 55.0 (expected 54.8; last 54.9)
      • Germany's April Manufacturing PMI 58.1 (expected 57.6; last 58.2) and Services PMI 54.1 (expected 53.9; last 53.9)
      • France's April Manufacturing PMI 53.4, as expected (last 53.7) and Services PMI 57.4 (expected 56.6; last 56.9)
    • In news:
      • French President Emmanuel Macron is making an official State visit to Washington. The two leaders will dine at George Washington's Mount Vernon estate tonight.
      • European Commission Vice President Vadis Dombrovskis said that eurozone creditors are preparing a debt relief offer for Greece. Mr. Dombrovskis added that some relief might be offered up front with other relief measures would be unlocked after a delay.
      • In Italy, the center-right alliance won a small regional vote in Molise. Keep in mind that a coalition deal at the national level remains elusive.

07:31AM ET
[BRIEFING.COM] S&P futures vs fair value: +1.50. Nasdaq futures vs fair value: +9.50.

06:55AM ET
[BRIEFING.COM] S&P futures vs fair value: +1.50. Nasdaq futures vs fair value: +4.80.

06:55AM ET
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[BRIEFING.COM] Stocks retreated for the second day in a row on Friday, with shares of tech giant Apple (AAPL 165.72, -7.08, -4.1%) falling sharply. The S&P 500 lost 0.9%, the Dow Jones Industrial Average dropped 0.8%, and the tech-heavy Nasdaq Composite declined 1.3%, but all three major averages managed to maintain modest gains for the week.

Friday's selling was broad-based, with 10 of 11 S&P 500 sectors finishing in the red. The technology (-1.5%) and consumer staples (-1.7%) groups were the worst-performing sectors, while the financial space (+0.1%) finished at the top of the sector standings with a slim gain. Stocks were modestly lower at the opening bell, but selling accelerated after the S&P 500 breached its 50-day moving average (2687). The major averages finished a step above their session lows thanks to a late rally.

Apple led the tech sector lower on Friday, with its shares dropping 4.1%, following cautious commentary from analysts, who warned that iPhone sales could slow in the coming months. These concerns flowed from the weak guidance that Taiwan Semi (TSM 38.95, -0.58, -1.5%) gave on Thursday, which was attributed, in part, to softer smartphone demand. Apple shares did find some support at their 200-day moving average though, closing right on top of the key technical level.

Meanwhile, in the financial sector, shares of Wells Fargo (WFC 52.56, +1.02) had a positive showing, rallying 2.0%, after the big bank agreed to pay $1 billion to settle loan abuse allegations. Wells Fargo's positive performance helped underpin the financial group, but a steepening of the yield curve was likely the more influential factor; the 2s10s spread ticked up two basis points to 51 basis points -- up from 42 basis points on Tuesday. The benchmark 10-yr yield ended four basis points higher at 2.95% -- its highest level in more than four years.

On the earnings front, shares of General Electric (GE 14.54, +0.55) jumped 3.9% after the Dow component reported better-than-expected earnings and revenues for the first quarter and reaffirmed its guidance for fiscal year 2018. Shares of fellow industrial giant Honeywell (HON 150.57, +2.44) also climbed following upbeat Q1 results, adding 1.7%.

In politics, the Democratic National Committee filed a lawsuit on Friday against the Russian government, the Trump campaign, and the WikiLeaks organization, alleging that they conspired to tilt the 2016 presidential election in Mr. Donald Trump's favor. The news had a negligible impact on trading.

Investors didn't receive any economic data on Friday.

  • Nasdaq Composite: +3.5% YTD
  • Russell 2000: +1.9% YTD
  • S&P 500: -0.1% YTD
  • Dow Jones Industrial Average: -1.0% YTD

Week In Review: Holding On

The U.S. stock market notched its second consecutive weekly advance this week, but big losses on Thursday and Friday left a bad taste in investors' mouths going into the weekend. The S&P 500 added 0.5% this week, while the Dow Jones Industrial Average and the Nasdaq Composite climbed 0.4% and 0.6%, respectively.

Wall Street kicked off the week on a positive note, breathing a sigh of relief after a U.S.-led strike on Syria over the weekend -- which was in response to a suspected chemical attack from the Syrian government on the rebel-held town of Douma -- turned out to be less dramatic than many had feared. Russian President Vladimir Putin -- who supports Syrian President Bashar al-Assad -- condemned the attack, saying additional strikes could invite chaos in global affairs, but made no mention of a military response to this particular incident -- leading investors to believe that the dust has settled for now.

The bullish bias carried over into Tuesday's session, as investors turned their attention to the earnings front. Netflix (NFLX) soared nearly 10% on Tuesday, hitting a new all-time high, after crushing subscriber growth estimates for the first quarter and issuing upbeat guidance for Q2. Goldman Sachs (GS) had a blow-out first quarter, easily beating both earnings and revenue estimates, but its shares struggled to advance on Tuesday, putting the investment bank on a long list of financial names that have failed to rally on upbeat results.

Stocks moved higher once again on Wednesday, but only modestly so, as IBM (IBM) weighed on investor sentiment. Shares of the tech giant tumbled 7.5% in the midweek session after the company's above-consensus first quarter profits and revenues were overshadowed by its disappointing gross margin rate, the quality of its revenue (more from hardware and less from cloud), and its relatively conservative profit guidance for fiscal year 2018. Meanwhile, energy shares outperformed as crude oil futures returned to their highest level in more than three years.

On Thursday, the market registered its first loss of the week, with consumer staples shares pacing the retreat. Shares of tobacco giant Philip Morris (PM) plunged 15.6% after the company reported a decline in cigarette shipment volume for the first quarter and slower-than-expected growth for its IQOS product -- which heats tobacco instead of burning it. Meanwhile, Apple supplier Taiwan Semi (TSM) led a broad tech retreat after its first quarter earnings and revenues came in below estimates; the chipmaker also lowered its guidance for Q2.

Wall Street ended the week with another disappointing performance on Friday. The technology sector showed relative weakness once again, with its top component by market cap -- Apple (AAPL) -- sliding 4.1% after several analysts raised concerns about the prospect of iPhone sales being weaker than expected. Financials provided some relief though. Financial giant Wells Fargo (WFC) was particularly strong, adding 2.0%, after agreeing to pay $1 billion to settle loan abuse allegations.

In the end, seven S&P sectors finished with weekly gains, while four finished with weekly losses. The energy group (+2.6%) was the top-performing group, as WTI crude futures advanced 1.5% over five sessions, closing Friday at $68.38 per barrel. Conversely, the consumer staples sector (-4.4%) was the worst performer by a large margin, extending its 2018 loss to 11.8%; for comparison, the S&P 500 has slipped 0.1% year to date. In general, growth-sensitive sectors outperformed defensive ones, although the top-weighted technology group (-0.2%) bucked this trend.

The yield curve ultimately steepened this week, but not before the 2s10s spread hit a 10-year low. Fed officials generally don't appear to be worried about a still low 2s10s spread -- which closed at 51 basis points on Friday -- leading the market to still believe that there will be at least three rate hikes this year in total.

Dow: -201.95… | Nasdaq: -91.93… | S&P: -22.99…
NASDAQ Adv/Dec 1079/1810. …NYSE Adv/Dec 979/1960.

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