The Market at 04:10PM ET
Dow: +122.10… | Nasdaq: +42.79… | S&P: +15.91…
NASDAQ Vol: 1.95 bln… Adv: 2222… Dec: 810…
NYSE Vol: 1.16 bln… Adv: 2407… Dec: 678…
Moving the Market
European markets rally despite more disappointing data from Germany (August Industrial Production -1.2% month-over-month; expected +0.2%)
Biotechnology outperforms after showing early volatility
Strong: Energy, Financials, Industrials, Materials, Health Care
Weak: Consumer Discretionary, Technology, Telecom Services, Utilities
[BRIEFING.COM] The stock market ended the Wednesday session on a higher note with the S&P 500 climbing 0.8% while the Nasdaq Composite (+0.9%) settled a bit ahead despite showing relative weakness in the early going.
Overall, the midweek session was very quiet, but there was some volatility present in the market as stocks surrendered their opening gains going into the afternoon, but returned into the middle of their ranges by the closing bell. It is worth noting that the pullback from opening highs occurred after the S&P 500 made a brief appearance above its 50-day moving average (1,997), which also served as resistance during afternoon action.
Similar to yesterday, commodity-sensitive energy (+1.3%) and materials (+1.3%) paced the opening move higher, but both sectors surrendered a portion of their gains as the session wore on. The energy sector was up nearly 2.5% at the start, but retreated from its high as crude oil erased its intraday gain. The energy component settled lower by 1.5% at $47.81/bbl after sliding from its intraday high in reaction to the latest Energy Information Administration's inventory report, which showed a 3.07 million barrel build.
Staying on the cyclical side, the largest sector by weight-technology (+0.4%)-underperformed throughout the day, but was able to climb off its low into the close. Large sector components like Apple (AAPL 110.67, -0.64), Alphabet (GOOGL 670.00, -1.64), and Oracle (ORCL 37.66, -0.07) lost between 0.2% and 0.6% while high-beta chipmakers outperformed, sending the PHLX Semiconductor Index higher by 1.5%.
The afternoon rebound in technology helped the Nasdaq overtake the S&P 500 while biotechnology also contributed to the late strength in the tech-heavy index. The iShares Nasdaq Biotechnology ETF (IBB 307.81, +5.90) climbed 2.0%, snapping its two-day skid, while the health care sector (+1.5%) settled in the lead.
Also of note, the consumer discretionary sector (+0.3%) struggled in the early going, but ended the day in the green despite an 18.8% plunge in the shares of Yum! Brands (YUM 67.70, -15.72) after the company reported disappointing results and guided below analyst expectations.
Unlike stocks, Treasuries spent the day in negative territory, ending the day with modest losses. Accordingly, the benchmark 10-yr yield rose three basis points to 2.07%.
Today's participation was well above average with more than 1.15 billion shares changing hands at the NYSE floor.
Economic data included Consumer Credit and MBA Mortgage Index:
Tomorrow, weekly Initial Claims will be reported at 8:30 ET (Briefing.com consensus 275,000) while the September FOMC Minutes will be released at 14:00 ET.
[BRIEFING.COM] The S&P 500 trades higher by 0.3% with one hour remaining in the session.
The Consumer Credit report for August was just released by the Federal Reserve and it showed an increase of $16.00 billion. That was lower than the Briefing.com consensus estimate of $19.50 billion. The prior month's credit growth was revised to $18.90 billion from $19.10 billion.
[BRIEFING.COM] Equity indices continue hovering near their recent levels with the S&P 500 (+0.5%) trading in-line with the Nasdaq Composite (+0.5%). The two indices have converged during afternoon action after the Nasdaq had struggled to keep pace with the market in the early going.
The early underperformance in the Nasdaq was due to losses in the technology sector, but the top-weighted group has narrowed its loss to 0.2% after being down more than 0.5%. Meanwhile, biotechnology has fared well after enduring a shaky start. The iShares Nasdaq Biotechnology ETF (IBB 308.40, +6.49) is now up 2.2% while the health care sector (+1.4%) holds the lead.
Elsewhere, Treasuries continue drifting near their lows with the 10-yr yield up three basis points at 2.07%.
[BRIEFING.COM] The major averages have returned into the neighborhood of their opening levels.
With a lack of economic data, we focus on today's mortgage purchasing applications report.
Mortgage applications increased 25.5% for the week ending October 3 after declining 6.7% during the week ending September 26.
On the surface, the increase in applications would suggest that home sales demand is improving. However, that would likely be an incorrect conclusion.
New regulations that will delay closings by six business days went into effect on October 3. There has been talk that the delay in closing could give a buying advantage to all-cash purchasers. Therefore, there was an incentive for mortgage holders to apply for loans before the new regulations took effect.
With applications pulled forward, the index should decline significantly next week.
[BRIEFING.COM] After slumping into negative territory earlier this morning, the major U.S. indices continue to drift back up towards their earlier session highs.
A look inside the Dow Jones Industrial Average shows Johnson & Johnson (JNJ 95.19, +1.77), Merck & Co (MRK 50.70, +0.90), and Boeing (BA 136.83, +2.20) are outperforming. JNJ and Merck are higher as the health care sector rallies back from recent weakness, pushing out the best sector performance in today's session. Boeing is also catching a bid as the industrial sector outperforms the broad market.
Conversely, Nike (NKE 121.78, -1.41) is the worst-performing Dow component following Yum (YUM 68.00, -15.42) and NuSkin's (NUS 35.13, -11.44) cautious commentary on China last night when they commented on their quarterly results.
For the week, the DJIA is +2.2% and now up 3.4% this month.
Elsewhere, the $21 bln 10-year note auction at the top of the hour (reopening) drew a high yield of 2.066% on a bid-to-cover of 2.59.
[BRIEFING.COM] The major averages are little changed at midday after sliding from their opening highs. The Nasdaq Composite hovers near its flat line while the S&P 500 (+0.1%) trades a bit ahead.
Equity indices began the midweek affair on a higher note after the overnight session featured another rally in Europe, which followed the release of disappointing economic data in Germany. Domestically, the key indices notched their highs during the opening hour, but they have backed away from those levels due to losses in a few influential sectors. Most notably, the top-weighted technology sector (-0.5%) has struggled since the early going, dragging the market down with it. Large sector components like Apple (AAPL 109.63, -1.68), Alphabet (GOOGL 660.57, -11.07), and Microsoft (MSFT 46.38, -0.37) hold losses between 0.8% and 1.7% while high-beta chipmakers have shown some relative strength. The PHLX Semiconductor Index remains higher by 0.2% with roughly half of its components trading in the green.
Elsewhere, the consumer discretionary sector (-0.3%) has also contributed to the pullback from early highs. A large portion of that weakness is due to a 17.8% dive in Yum! Brands (YUM 68.59, -14.83) after the company reported below-consensus results and issued guidance well below analyst expectations.
Also of note, the energy sector (+0.1%) had been up as much as 2.0% at the start, but the sector now trades near its flat line due to an intraday slide in crude oil futures. Currently, WTI crude is little changed at $48.47/bbl after hitting a session high near $49.70/bbl. The pullback in oil has taken place after the release of the latest inventory data, which showed a large build.
Treasuries have spent the first half of the day in the red with the 10-yr yield up two basis points at 2.06%.
Economic data reported this morning was limited to the weekly MBA Mortgage Index, which surged 25.5% to follow last week's 6.7% decline.
The Consumer Credit report for August will cross the wires at 15:00 ET (Briefing.com consensus $19.50 billion).
[BRIEFING.COM] The major averages have inched up off their lows, but they remain just above their unchanged levels. The S&P 500 (+0.2%) trades ahead of the Dow (+0.1%) and Nasdaq Composite (+0.1%), but small cap stocks have fared even better, evidenced by a 0.9% gain in the Russell 2000 (+0.9%).
For instance, high-beta chipmaker names continue showing strength with the PHLX Semiconductor Index trading higher by 0.4% despite the continued underperformance in the broader technology sector (-0.4%).
Similarly, biotechnology has charged to a new high after erasing its early loss. The iShares Nasdaq Biotechnology ETF (IBB 308.59, +6.68) is now up 2.2% while the health care sector (+1.3%) trades ahead of the remaining groups.
[BRIEFING.COM] Not much change in the market as the Dow (+0.1%), Nasdaq (-0.1%), and S&P 500 (+0.1%) continue hovering near their flat lines after surrendering their opening gains.
Despite the pullback from highs, the key indices continue holding solid gains for the week with two more sessions remaining before the weekend. The Dow has had the best showing so far this week, trading higher by 2.0% since Friday, while the S&P 500 and Nasdaq sport respective week-to-date gains of 1.5% and 0.7%.
It goes without saying that the current standing could change before the weekend, but it is worth noting that some volatility could enter the picture tomorrow afternoon once the Federal Reserve releases the minutes from its last meeting.
[BRIEFING.COM] Recent action saw the S&P 500 (unch) continue its retreat from opening highs due to losses in a couple influential sectors like technology (-0.7%) and consumer discretionary (-0.4%).
The top-weighted tech sector has struggled since the start, but the group has accelerated its decline not long ago. Meanwhile, the discretionary sector has been pressured by quick-service restaurant names and apparel retailers. Most notably, Yum! Brands (YUM 67.73, -15.69) has tumbled 18.7% in reaction to disappointing quarterly results and cautious guidance.
Also of note, the energy sector (+0.1%) was up near 2.0% at the start of the session, but the growth-sensitive group has retreated amid a pullback in crude oil. To that point, WTI crude has narrowed its gain to just 0.1% at $48.62/bbl after hitting a session high near $49.70/bbl. The pullback in oil has taken place after the release of the latest inventory data, which showed a large build.
[BRIEFING.COM] The major averages have backed away from their best levels of the day with the S&P 500 narrowing its gain to 0.4% while the Nasdaq Composite (unch) trades just above its flat line.
The tech-heavy Nasdaq underperformed yesterday due to weakness in biotechnology, but today, top-weighted tech names have forced the Nasdaq back to its flat line. The likes of Apple (AAPL 110.45, -0.86), Alphabet (GOOGL 663.87, -7.77), Microsoft (MSFT 46.33, -0.42), and Facebook (FB 92.13, -0.69) show losses between 0.7% and 1.1% while the technology sector (-0.2%) trades behind the remaining groups.
Also of note, the iShares Nasdaq Biotechnology ETF (IBB 300.98, -0.93) has returned into the red after enduring a volatile start to the trading day. That being said, the health care sector (+0.3%) continues trading in the green.
[BRIEFING.COM] The major averages have added to their early gains with the S&P 500 (+0.8%) now trading in-line with the Dow Jones Industrial Average (+0.8%).
In our opening update we highlighted the early weakness in biotechnology, but the iShares Nasdaq Biotechnology ETF (IBB 305.00, +3.09) has erased its early loss and now trades higher by 1.2%. The swift rebound in biotechnology has lifted the health care sector (+0.7%) into the green, leaving telecom services (-0.3%) as the lone decliner at this juncture.
Overall, the early action has featured broad-based buying with nearly six NYSE-listed issues trading in the green for each decliner.
[BRIEFING.COM] The major averages have climbed out of the gate with the Dow Jones Industrial Average (+0.8%) setting the pace for the second consecutive day.
Similar to yesterday, biotechnology has not taken part in the early rally with the iShares Nasdaq Biotechnology ETF (IBB 298.50, -3.41) trading lower by 1.1% at this time. Meanwhile, the health care sector trades lower by 0.4% while seven of the remaining nine groups trade in the green.
Once again, the energy sector (+2.4%) trades well ahead of its peers. The growth-sensitive sector has drawn early strength from crude oil, which has climbed 1.9% to $49.42/bbl.
Elsewhere, Treasuries remain just above their lowest levels of the day with the 10-yr yield up three basis points at 2.07%.
The stock market is on track for a higher open with S&P 500 futures trading ten points above fair value after enjoying a steady rally overnight.
The pre-market advance in futures has coincided with strength in European markets with the latter taking place despite the release of more disappointing economic data. Today, manufacturing data from Germany has disappointed with August Industrial Production (-1.2% month-over-month; +0.2% expected) coming in below estimates following yesterday's below-consensus August Factory Orders report (-1.4% month-over-month; +0.5% expected).
Domestically, the early morning action has been fairly subdued with investors receiving just a few earnings reports. Yum! Brands (YUM 70.52, -12.90) is on track to open lower by 15.5% after reporting below-consensus results and issuing guidance well below analyst expectations.
On the economic front, the weekly MBA Mortgage Index surged 25.5% to follow last week's 6.7% decline while the Consumer Credit report for August will cross the wires at 15:00 ET (Briefing.com consensus $19.50 billion).
Treasuries hover near their overnight lows with the 10-yr yield up four basis points at 2.08%.
The S&P 500 futures trade 11 points above fair value.
Markets in the Asia-Pacific region stayed on their rally track Wednesday, bolstered by the rebound in oil prices, which lifted energy stocks, and continued enthusiasm over the idea that the Federal Reserve will not raise rates in the near term. On a related note, the Bank of Japan kept its key policy rate unchanged at 0.10%, as expected. Japan's Nikkei faltered early Wednesday, but rallied late to finish with a 0.8% gain. China's stock market remained closed for holiday, but will re-open Thursday after a seven-day closure.
Major European indices trade higher across the board despite the release of more disappointing economic news. For the second day in a row, manufacturing data from Germany has disappointed with Industrial Production coming in below estimates following yesterday's below-consensus Factory Orders report.
Equity index futures continue holding solid pre-market gains with S&P 500 futures hovering nine points above fair value.
Meanwhile, the Dollar Index (95.41, -0.04) is little changed as the greenback continues consolidating against other currencies. Last evening, the dollar retreated slightly against the yen after the Bank of Japan made no changes to its monetary policy, leaving its key interest rate at 0.10%. The dollar/yen pair fell from 120.30 to 119.85 in reaction to the news, but that loss has been cut in half, pushing the currency pair back up to 120.10, which has been an area of congestion as of late.
U.S. equity futures hold solid pre-market gains after climbing steadily overnight. The S&P 500 futures hover ten points above fair value after hitting pre-market highs shortly after the start of the overnight session.
Meanwhile, Treasuries sit near their lows with the 10-yr yield up three basis points at 2.07%.
On the economic front, the weekly MBA Mortgage Index surged 25.5% to follow last week's 6.7% decline while the Consumer Credit report for August will be released at 15:00 ET (Briefing.com consensus $19.50 billion).
In U.S. corporate news of note:
Reviewing overnight developments:
[BRIEFING.COM] The stock market endured a shaky session on Tuesday with the Dow Jones Industrial Average (+0.1%) eking out a slim gain while the S&P 500 (-0.4%) and Nasdaq Composite (-0.7%) underperformed throughout the day.
For the second day in a row, the U.S. trading day began after the release of some disappointing economic data overseas. Today, it was Germany's Factory Orders report for August, which showed a 1.8% decline while the market had expected an increase of 0.5%. That being said, European equities were able to register gains after erasing their early losses, but the strength did not carry over the U.S. session as continued weakness in the biotech space kept the broader market under pressure.
Specifically, the iShares Nasdaq Biotechnology ETF (IBB 301.91, -11.29) lost 3.6% after surrendering 0.7% on Monday. On a related note, the health care sector tumbled 2.3% while most other influential sectors also struggled.
Similar to health care, heavily-weighted financials (-0.5%) and consumer discretionary (-0.7%) underperformed throughout the day while another influential group-technology (+0.2%)-climbed ahead of the broader market during afternoon action.
The largest sector by weight received support from the likes of Apple (AAPL 111.31, +0.53), Microsoft (MSFT 46.75, +0.12), and Intel (INTC 31.74, +0.53), but several other large components finished the day in negative territory. High-beta chipmakers struggled in the early going, but the PHLX Semiconductor Index added 0.3% after erasing a 1.5% decline.
Elsewhere among cyclical sectors, energy (+2.2%) and materials (+1.3%) continued their recent show of relative strength, extending their respective week-to-date gains to 5.1% and 4.0%. Commodity prices were behind today's charge as crude oil surged 4.9% to $48.53/bbl with reports suggesting oil traders have taken note of rising tensions in Syria.
Unlike stocks, Treasuries ended the day near their highs after a brief morning appearance in the red. The 10-yr note added a quarter of a point, pressuring its yield two basis points to 2.04%.
Today's participation was ahead of average as more than 950 million shares changed hands at the NYSE floor.
Economic data was limited to the August trade balance, which showed a deficit of $48.30 billion while the Briefing.com consensus expected the deficit to come in at $44.50 billion. The prior month's deficit was revised to $41.80 billion from $41.90 billion.
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET while the Consumer Credit report for August will cross the wires at 15:00 ET (Briefing.com consensus $19.50 billion).