The Market at 04:15PM ET
Dow: +53.62… | Nasdaq: +26.26… | S&P: +9.86…
NASDAQ Vol: 1.51 bln… Adv: 1873… Dec: 985…
NYSE Vol: 732.8 mln… Adv: 1971… Dec: 979…
Moving the Market
U.K. PMI readings disappoint
Quarterly reports and guidance remain in focus
Oil extends loss
Heavily-weighted Financials and Consumer Discretionary outperform
Strong: Telecom Services, Utilities, Consumer Staples, Financials, Consumer Discretionary
[BRIEFING.COM] The stock market ended an upbeat week on a higher note as the major averages soared to new all-time highs. The broader market maintained its bullish posture as investors examined a hodgepodge of quarterly earnings reports. Other focal points impacting today's trade included strengthening in the dollar, weakness from the oil pit, and key sector leadership from the technology (+0.5%), consumer discretionary (+0.5%), and financial (+0.6%) sectors. The Nasdaq Composite (+0.5%) finished in-line with the S&P 500 (+0.5%) and ahead of the Dow Jones Industrial Average (+0.3%).
Equity indices began the day on a choppy note as participants eyed a relatively flat finish in global bourses. Across the pond, the first batch of post-Brexit regional PMI readings came in on a mixed note as the United Kingdom's July Manufacturing PMI (49.1; last: 52.1) and July Services PMI (47.4; expected last: 52.3) each showed noticeable contractions. On the flipside, eurozone PMI fared better, but July Manufacturing PMI (51.9; last: 52.8) and July Services PMI (52.7; last: 52.8) both declined from their June readings.
The benchmark index slipped during the first hour of trade, finding its bearings after the preliminary reading of U.S. Markit Manufacturing PMI (52.9; last: 51.3) for July came in better than expected. The major averages rallied off their opening low as heavily-weighted industrials (+0.1%) and technology (+0.5%) erased their opening losses. All ten sectors finished in the green as financials (+0.6%), telecom services (+1.3%), and utilities (+1.3%) led the pack. The remaining gainers ended with upticks between 0.1% (industrials) and 0.5% (consumer discretionary).
The financial sector (+0.6%) extended its weekly gain to 0.7%, compared to a gain of 0.6% in the benchmark index. In the group, asset management companies outperformed as they rebounded alongside Bank of New York Mellon (BK 39.19, +0.59). Additionally, Dow component American Express (AXP 64.28, +0.85) outperformed as it rebounded in sympathy with Visa (V 79.91, +1.12). The credit service name beat bottom-line estimates for the quarter and announced an additional $5 billion in share buybacks. Separately, E*TRADE (ETFC 25.81, +0.59) climbed 2.3% as investors responded to a 10.5% increase in revenue year-over-year.
The consumer discretionary space (+0.5%) outperformed as restaurant names gained alongside Chipotle Mexican Grill (CMG 442.48, +24.41). The stock rallied 5.8% after reporting better-than-feared quarterly results. Elsewhere, Panera Bread (PNRA 215.54, +5.59) and Buffalo Wild Wings (BWLD 140.77, +6.12) gained 2.7% and 4.6%, respectively. The two names are slated to report earnings next Tuesday. On the flipside, 21st Century Fox (FOXA 27.11, -0.07) underperformed after Fox News CEO Roger Ailes resigned from his position.
In the technology space (+0.5%), Dow component Microsoft (MSFT 56.57, +0.77) outperformed, extending its weekly advance to 5.3%. The high-beta chipmakers ended the day in-line with the broader sector as the group moved higher in sympathy with Advanced Micro (AMD 5.84, +0.62). The stock spiked 11.9% after beating estimates for the quarter and raising its third-quarter outlook. On the flipside, Skyworks (SWKS 64.81, -6.11) underperformed as inventory fears outweighed positive quarterly results.
The heavily-weighted industrial sector (+0.1%) finished above its flat line as rail names and airlines rebounded. Union Pacific (UNP 92.85, +1.92) jumped 2.1% after falling 3.4% yesterday. Dow component General Electric (GE 32.06, -0.53) rounded out the price-weighted index after reporting a 16.0% loss in organic orders. Elsewhere, Honeywell (HON 115.61, -3.05) finished lower by 2.6% after its top line failed to impress investors.
The U.S. Dollar Index (97.36, +0.36) settled higher as the yen, euro, and pound each slipped against the greenback. The dollar/yen pair finished higher by 0.2% (106.07) while the single currency ticked lower by 0.4% against the buck (1.0978). Separately, sterling fell 1.0% against the dollar (1.3098).
The Treasury complex finished on a mixed note with the yield on the 10-yr note rising one basis point to 1.56%.
Today's trading volume was below the recent average as fewer than 733 million shares changed hands on the NYSE floor.
There was no economic data of note released today. Monday's economic calendar will also be empty, but data will pick up later in the week with a Wednesday release of the FOMC's July Policy Statement.
Week in Review: Stocks Climb to Record(er) Highs
The stock market flirted with its first weekly decline in four weeks, but steady buying interest on Friday helped equities secure yet another round of weekly gains. The S&P 500 added 0.6% while the Nasdaq Composite (+1.4%) outperformed.
Quarterly earnings were in focus throughout the week, but more results will be released in coming weeks with 75.4% of S&P 500 members still due to report their earnings. So far, blended earnings for the second quarter are down 3.6% with energy (-78.2%) and materials (-10.1%) showing the largest blended declines while sectors like telecom services (+6.1%) and consumer discretionary (+8.5%) have shown blended earnings growth.
Next week will feature more quarterly reports, but central banks will be back in the spotlight, starting with a Wednesday policy statement from the Federal Reserve. The Fed will be followed by the Bank of Japan, which will announce the results of its meeting on Friday.
Investors have not shown much concern about the upcoming Fed meeting, considering the fed funds futures market implies just a 2.4% chance of a rate hike being announced on Wednesday. Rate hike expectations for the next two meetings remain subdued while the implied probability of a rate hike in December sits at 47.8%.
[BRIEFING.COM] As the stock market enters its final hour of trade for the week, the Nasdaq Composite (+0.5%) trades ahead of the S&P 500 (+0.4%) and the Dow Jones Industrial Average (+0.2%). The three indices sport weekly gains between 0.2% and 1.4%.
Nine sectors trade in the green as utilities (+1.3%), telecom services (+1.1%), and financials (+0.5%) lead the pack. The remaining gainers show upticks between 0.1% (energy) and 0.5% (consumer discretionary). On the flipside, the heavily-weighted industrial sector (-0.3%) sports the only loss.
In the technology space (+0.4%), PayPal (PYPL 37.29, -2.83) displays relative weakness despite reporting in-line earnings. Additionally, the company announced that it will entering into a strategic partnership with Visa (V 79.51, +0.72). Wells Fargo downgraded PayPal on the news, citing potential pressure on its funding costs and operating margins. Wells Fargo lowered its designation on the stock to "Market Perform" from "Outperform."
WTI crude ended its day lower by 1.1% ($44.21/bbl; -$0.50), extending its weekly loss to 2.5%.
[BRIEFING.COM] The S&P 500 (+0.4%) floats near its best level of the day, testing resistance near the 2174 price level. The benchmark index has extended its weekly gain to 0.5%.
The commodity-sensitive energy (UNCH) sector flirts with its flat line, responding to a pickup in crude oil. WTI crude trades lower by 1.6% ($44.05/bbl, -$0.70) after rebounding from the $43.80/bbl price level. Strengthening in the dollar has kept pressure on the energy component as the U.S. Dollar Index (97.49, +0.49) jumps 0.5%.
In the sector, Schlumberger (SLB 81.05, +1.03) has gained 1.3% after beating bottom-line estimates for the quarter. Separately, Dow component Exxon Mobil (XOM 93.79, -0.05) trades flat as the stock underperforms inside the price-weighted index. For the week, the oil major has declined by 1.4%, compared to a decline of 1.6% in the broader energy sector.
The Treasury complex continues to trade on a mixed note as the yield on the 10-yr note sits unchanged at 1.55%. The yield on the 10-yr note has slipped three basis points from last week's settlement at 1.58%.
[BRIEFING.COM] The major averages have floated sideways as the Nasdaq Composite (+0.5%) trades ahead of the S&P 500 (+0.4%) and the Dow Jones Industrial Average (+0.2%).
The consumer discretionary space (+0.5%) trades ahead of the broader market as restaurant names display relative strength. Chipotle Mexican Grill (CMG 437.09, +19.02) has rallied 4.6% as better-than-feared quarterly results bolster the beleaguered restaurant operator. The company missed top- and bottom-line estimates for the quarter and reported that comparable-store sales fell 23.6% year-over-year. The positive price action has also boosted the sub-group as Panera Bread (PNRA 214.62, +4.67) and Buffalo Wild Wings (BWLD 140.69, +6.04) gain a respective 2.2% and 4.5% ahead of next Tuesday's quarterly reports.
Media names underperform in the group as 21st Century Fox (FOX 27.14, -0.04) and Disney (DIS 97.84, -0.17) lose 0.1% and 0.2%, respectively. 21st Century Fox has been under pressure after Fox News CEO Roger Ailes resigned from his position last evening.
On the commodities front, gold ended its pit session lower by 0.6% ($1,323.20, -$7.90), extending its weekly loss to 0.3%.
[BRIEFING.COM] The major U.S. indices are effectively unchanged since our prior update as stocks continue to sport small gains in today's quiet session.
A look inside the Dow Jones Industrial Average shows that American Express (AXP 64.26, +0.83), DuPont (DD 68.60, +0.75), and Verizon (VZ 55.96, +0.59) are outperforming. American Express shares are recovering from yesterday's earnings driven decline, while DuPont is higher amid an outperformance in the materials sector. Verizon, trading in-line with telecom peers, is seeing increased interest today following reports it is near a deal to acquire Yahoo's (YHOO 39.33, +0.48) core internet assets for ~$5 bln.
Conversely, General Electric (GE 31.92, -0.67) is the worst-performing Dow component following this morning's quarterly report. GE, whose shares were up more than 21% over the last 12 months going into today's session, reported better than expected quarter and reaffirmed its 2016 guidance. Following the report, Standpoint Research initiated coverage on shares with a sell rating.
Heading into the close, the DJIA is set to close out the week higher by 0.15%.
[BRIEFING.COM] The stock market trades on a higher note at midday as equities extend their weekly advance. The broader market has shown marked resilience today, shrugging off a downturn in crude oil, a rally in the dollar, and weakness in industrials (-0.3%). A reversal in cyclical sectors has added to today's positive tone as technology (+0.4%), consumer discretionary (+0.4%), and financials (+0.6%) outperform. The Nasdaq Composite (+0.5%) trades ahead of the S&P 500 (+0.3%) and the Dow Jones Industrial Average (+0.1%).
The major averages began the day on a modestly lower note as quarterly reports and guidance from the likes of General Electric (GE 31.90, -0.68) and Honeywell (HON 114.60, -4.06) pressured the broader market. The benchmark index notched a session low (2163.20) in the first hour of trade, climbing off that level after the release of the U.S. Markit Manufacturing PMI reading (52.9; last: 51.3) for July.
Equities ticked higher through the morning, carving out session highs in the early afternoon. Additionally, while the benchmark index was establishing a new session high (2173.13), crude oil was ebbing towards a fresh low. At this juncture, WTI crude trades lower by 2.1% ($43.84/bbl; -$0.91), succumbing to pressure from a stronger dollar. At midday, eight sectors trade in the green as financials (+0.6%), utilities (+1.2%), and telecom services (+1.2%) outperform. The remaining gainers sport upticks between 0.1% (health care) and 0.5% (consumer staples). On the flipside, energy (-0.1%) and industrials (-0.3%) show the only losses.
The economically-sensitive financial sector (+0.6%) demonstrates relative strength as asset management names and investment brokerages outperform. Bank of New York Mellon (BK 39.13, +0.53) has gained 1.4% as the stock rebounds from yesterday's 3.5% post-earnings selloff. The company reported yesterday that its assets under management slipped 2.0% year-over-year. Elsewhere, E*TRADE (ETFC 25.76, +0.54) has gained 2.2% as investors respond to a 10.5% increase in revenue year-over-year.
In the technology space (+0.4%), software names demonstrate relative strength as Adobe Systems (ADBE 97.81, +1.47) increases 1.5%. Additionally, Dow component Microsoft (MSFT 56.38, +0.58) has gained 1.1%, extending its weekly advance to 5.0%. Conversely, Skyworks (SWKS 64.61, -6.30) underperforms in the PHLX Semiconductor Index (+0.4%). The chipmaker has tumbled 8.9% as inventory fears outweigh an otherwise positive quarter. The iPhone supplier's quarter has also weighed on Apple (AAPL98.69, -0.73) as investors look ahead to next week's earnings report.
The Dow Jones Transportation Average (+1.0%) displays relative strength as rail names and airlines recover from yesterday's earnings-related selling. Union Pacific (UNP 92.51, +1.58) has jumped 1.7% after sliding 3.4% yesterday. In the broader industrial sector, Dow component General Electric (GE 31.90, -0.69) rounds out the price-weighted index after reporting a 16.0% loss in organic orders. Elsewhere, Honeywell (HON 114.58, -4.07) trades lower by 3.4% after its top line failed to impress investors.
The U.S. Dollar Index (97.44, +0.44) floats off its best level of the day as the euro and pound sport losses against the buck. The single currency has lost 0.5% against the greenback (1.0967) while sterling has fallen 1.0% against the dollar (1.3104).
The Treasury complex trades on a mixed note as the yield on the 10-yr note slips one basis point to 1.55%
There was no economic data of note released today.
[BRIEFING.COM] The major indices hover near their best levels of the day as the Nasdaq Composite (+0.6%) trades ahead of the S&P 500 (+0.3%) and the Dow Jones Industrial Average (+0.1%).
The economically-sensitive financial sector (+0.5%) trades in-line with the broader market, extending its weekly gain to 0.7%. Asset management names display relative strength as the sub-group trades higher in sympathy with Bank of New York Mellon (BK 39.13, +0.53). The stock has rebounded 1.4% following yesterday's 3.5% post-earnings decline. Separately, E*TRADE (ETFC 25.76, +0.54) has jumped 2.2% after reporting a bottom-line beat on in-line revenue. The investment brokerage reported that its top-line grew 10.5% year-over-year to $474 million. The broader financial sector has gained 3.5% in July, which compares to a gain of 3.6% in the benchmark index.
The U.S. Dollar Index (97.50, +0.51) floats near its best level of the day as the yen, euro, and pound continue to sport modest losses against the buck. The dollar/yen pair trades higher by 0.4% (106.28) while the single currency has lost 0.6% against the greenback (1.0960). Separately, sterling has fallen 1.1% against the dollar (1.3090).
[BRIEFING.COM] The Nasdaq Composite (+0.5%) and the S&P 500 (+0.3%) have each carved out new session highs, extending their weekly gains to 0.4% and 1.3%, respectively.
The health care sector (+0.1%) has crossed above flat line in recent action as biotechnology outperforms. The iShares Nasdaq Biotechnology ETF (IBB 281.54, +1.29) has advanced 0.5%, extending its weekly gain to 3.2%. Conversely, medical equipment names weigh on the broader sector. Stryker (SYK 116.50, -6.05) has declined by 4.9% after lowering its third quarter earnings outlook below analysts' estimates. However, the company reported above-consensus results for the second quarter and increased its revenue outlook for the fiscal year. Elsewhere, specialty pharmaceutical names trade lower in sympathy with Valeant Pharmaceuticals (VRX 23.49, -0.96). The stock has declined 4.0% after the FDA raised concerns regarding the manufacturing process for the company's new open angle glaucoma medication.
Treasuries continue to inch off their lows as yields pullback throughout the complex. The yield on the 10-yr note remains higher by one basis point at 1.56%.
[BRIEFING.COM] The major indices have inched lower in recent action as the S&P 500 (+0.1%) trades one point below its best level of the day. Separately, the domestically-facing Russell 2000 (+0.4%) outperforms.
The influential technology sector (+0.1%) floats narrowly above its flat line while high-beta chipmakers continue to underperform. In the group, Skyworks (SWKS 64.50, -6.41) has declined by 9.1% as concerns regarding remaining inventory overshadow an otherwise positive quarter. The quarterly report from the iPhone supplier has weighed on Apple (AAPL 98.67, -0.76) as investors look ahead to next Tuesday's earnings release. Elsewhere, fellow large cap Facebook (FB 120.48, -0.13) has also been under pressure after BTIG Research downgraded the stock to "Neutral" from "Buy." The firm cited an unattractive risk/reward ratio and rising expectations regarding the company's growth prospects. Conversely, Advanced Micro (AMD 5.70, +0.48) outperforms after beating estimates and raising its guidance for the third quarter.
On the commodities front, WTI crude trades lower by 1.2% ($44.22/bbl; -$0.53) while safe haven gold has declined 0.7% to $1,321.10/ozt.
[BRIEFING.COM] The Nasdaq Composite (+0.3%) and the S&P 500 (+0.2%) have inched up in recent action, establishing new session highs. Interestingly enough, the move higher corresponded with a sustained downturn in crude oil.
The heavily-weighted industrial sector (-0.4%) has moved off its session low as the group trims an opening decline of 0.9%. In the space, diversified machinery names demonstrate relative weakness as General Electric (GE 31.98, -0.61) and Honeywell (HON 114.09, -4.57) decline by 1.9% and 3.9%, respectively. Dow component General Electric rounds out the price-weighted index after reporting that organic orders declined 16.0%. Separately, Boeing (BA 132.10, -1.43) has lost 1.1% after announcing that it would be recording $2.1 billion in charges related to various manufacturing programs. The company is scheduled to report earnings on July 27. The broader industrial sector has declined 1.3% this week, leading only energy (+0.3%; week-to-date: -1.4%) over that period.
The Treasury complex has inched off its low, but the yield on the 10-yr note remains higher by two basis points at 1.58%.
[BRIEFING.COM] The major averages have ticked higher in recent action as the S&P 500 (UNCH) and the Nasdaq Composite (UNCH) each float near their flat lines. For the week, the two indices sport gains of 0.2% and 0.9%, respectively.
The leaderboard remains little changed as heavily-weighted health care (-0.1%), technology (-0.2%), and industrials (-0.8%) sport the largest losses. Conversely, countercyclical consumer staples (+0.3%), utilities (+0.5%) and telecom services (+1.5%) outperform.
The high-beta chipmakers demonstrate relative weakness, evidenced by the 0.1% loss in the PHLX Semiconductor Index. In the group, Skyworks (SWKS 64.31, -6.61) has tumbled 9.3% as largely in-line quarterly results elicit selling pressure.
The U.S Dollar Index (97.13, +0.13) has ticked higher in recent action as the euro, Canadian dollar, and pound each sport losses against the greenback. The euro/dollar pair trades lower by 0.1% (1.1015) while the buck has gained 0.2% against the commodity-sensitive Canadian dollar (1.3115). Separately, the dollar has ticked higher by 0.1% against the safe-haven yen (105.93).
[BRIEFING.COM] The stock market began its day on a flat note as the Nasdaq Composite (-0.2%) trades behind the S&P 500 (-0.1%) and the Dow Jones Industrial Average (-0.1%).
Six sectors trade in the green as consumer staples (+0.3%) and energy (+0.3%) trail telecom services (+0.8%). The remaining gainers sport upticks between 0.1% (consumer discretionary) and 0.2% (utilities). On the flipside, heavily-weighted technology (-0.4%) and industrials (-0.8%) round out the board.
In the consumer discretionary space (+0.1%), footwear names display relative weakness as the sub-group trades lower in sympathy with Skechers USA (SKX 25.60, -6.60). The stock has plunged 20.5% after missing analysts' estimates for the quarter and lowering its outlook for the third quarter.
The Dow Jones Transportation Average (+0.1%) displays relative strength as airlines rebound. The U.S. Global Jets ETF (JETS 22.44, +0.19) has gained 0.9%, trading higher in sympathy with American Airlines (AAL 36.01, +1.05). The stock has rallied 3.1% after beating bottom-line estimates for the quarter and projecting an improvement in unit revenue in the second half of the year.
On the commodities front, WTI crude trades lower by 0.6% ($44.49/bbl; -$0.26) while gold has declined 0.8% to $1,320.70/ozt.
The stock market is on track for a flat open as the S&P 500 futures trade two points above fair value.
Index futures inched higher overnight, buoyed by a rebound in crude oil and a mixed set of quarterly reports. The earnings season continues to wear on as positive results from Visa (V 79.48, +0.69) and Stanley Black & Decker (SWK 116.61, +1.64) help to take the sting off disappointing elements in reports from General Electric (GE 31.83, -0.76) and Honeywell (HON 115.25, -3.41). For its part, WTI crude trades lower by 0.3% ($44.62/bbl; -$0.13) after rebounding from the $44.30/bbl price level.
Global indices trade on a flat note as participants look ahead to next week's central bank meetings. The Federal Reserve is scheduled to release its July policy statement on Wednesday while the Bank of Japan will conclude its meeting on Friday. On that note, Japan's Nikkei (-1.1%) underperformed overnight amid an early bid in the yen. The safe-haven currency has retreated over the week as investors eye potential stimulus measures from the country.
On the corporate front, Yahoo! (YHOO 38.79, -0.06) has ticked lower by 0.2% after reports indicated that Verizon (VZ 55.17, -0.20) is closing in on a deal to acquire the web portal's core business. Verizon is one of five bidders said to have entered final-round offers. Chipotle Mexican Grill (CMG 408.20, -9.87) trades lower by 2.4% after missing top- and bottom-line expectations for the quarter. Additionally, Telsey Advisory Group lowered its target price on the restaurant chain to $400 from $420.
There is no economic data scheduled for today.
The S&P 500 futures trade two points above fair value.
Equity indices across the Asia-Pacific region ended the week on a mostly lower note with investors focusing on the yen once again. The Japanese currency displayed strength in early evening hours after Bank of Japan Governor Haruhiko Kuroda once again said that there is no need nor possibility for implementing helicopter money. Separate reports suggested the country's government may deploy fiscal stimulus between JPY20 trillion and JPY30 trillion.
Major European indices trade on a flat note as the U.K.'s FTSE (+0.4%) outperforms. Investors received PMI readings from the region today, with most coming in ahead of expectations.
Equity futures remain little changed as the S&P 500 futures trade two points above fair value.
In company specific news, industrial large cap Honeywell (HON 115.85, -2.81) trades lower by 2.4% after reporting a mixed quarter. The company beat bottom-line estimates, but did not live up to revenue estimates. Additionally, Honeywell's revenue outlook is below analysts' estimates, projecting a 4.0% to 6.0% year-over-year increase to between $10.00 billion and $10.19 billion. Elsewhere, V.F. Corp (VFC 62.50, -0.67) has slipped 1.1% after missing top-line estimates and lowering its sales outlook for fiscal year 2016.
The U.S. Dollar Index (97.10, +0.10) trades modestly higher as the euro, yen, and pound each sport losses against the greenback. The single currency has slipped 0.1% against the buck (1.1015) while the dollar/yen pair has gained 0.3% (106.1). Cable has tumbled 1.0% (1.3096) as investors weigh the implications of disappointing July PMI readings. Separately, the dollar/Canadian dollar pair trades lower by 0.2% (1.3063).
U.S. equity futures hover below overnight highs as the S&P 500 futures trade two points above fair value. Futures ticked higher overnight as investors evaluated the latest batch of U.S. quarterly reports. On that note, Dow component General Electric (GE 31.90, -0.69) topped forecasts for the quarter, but has been under pressure as investors eye declining industrial orders.
Across the pond, the United Kingdom's July Purchasing Manager Indices disappointed as Manufacturing PMI (49.1; last: 52.1) and Services PMI (47.4; expected last: 52.3) each indicated noticeable contractions. Conversely, Eurozone PMI fared better post-Brexit as July Manufacturing PMI (51.9; last: 52.8) and July Services PMI (52.7; last: 52.8) each showed narrower reductions. For its part, WTI crude trades flat ($44.76/bbl, +$0.01) after trimming a larger overnight loss.
The Treasury complex trades lower as the yield on the 10-yr note rises two basis points to 1.58%.
There is no economic data of note scheduled to be released today.
In U.S. corporate news of note:
Reviewing overnight developments:
[BRIEFING.COM] The major averages ended the Thursday affair under moderate selling pressure, pulling back from their recent rally to new all-time highs. The heavyweight industrial group (-1.0%) paced the retreat as weaker-than-expected quarterly reports and guidance weighed on the sector. Additionally, a leg lower in oil futures and the weakness in the financial (-0.5%) and technology (-0.5%) groups added to the negative tone. The Dow Jones Industrial Average (-0.4%) finished in-line with the S&P 500 (-0.4%) and behind the Nasdaq Composite (-0.3%).
The major averages began the day on a flat note as investors weighed a plethora of earnings reports and recently-released economic data. The European Central Bank released its latest policy statement this morning, deciding to maintain its assets purchase program and its interest rate corridor. The decision was largely expected after the Bank of England stated earlier in the month that it was too early to assess the economic impact of the United Kingdom's exit from the European Union. However, ECB President Mario Draghi stated that the central bank is ready to act should the need arise.
Equity indices teetered near their flat lines into the late morning as leadership from heavily-weighted technology (-0.5%) and health care (+0.4%) kept the market afloat. However, the benchmark index ebbed lower through the afternoon as a persistent downturn in crude oil weighed on equities. The S&P 500 (-0.4%) violated technical support near the 2166 price level in the early afternoon, drifting to the 2160 area. The major averages inched off that level in the final hour as eight sectors finished in the red. Materials (-0.6%), energy (-0.9%), and industrials (-1.0%) underperformed while the remaining decliners finished with losses between 0.3% (consumer staples) and 0.5% (technology). Conversely, health care (+0.4%) and utilities (+0.6%) finished above their flat lines.
The Dow Jones Transportation Average (-1.3%) finished well behind the benchmark index as airlines lagged. The U.S. Global Jets ETF (JETS 22.25, -0.79) fell 3.4% as disappointing results and guidance from Southwest Air (LUV 37.32, -4.71) weighed. The company stated that third-quarter revenue per available seat mile is expected to decline between 3.0% and 4.0% year-over year. Separately, Union Pacific (UNP 90.93, -3.19) underperformed among rail names after lowering its full-year volume estimates.
Defense names underperformed in the broader industrial sector (-1.0%) as Lockheed Martin (LMT 254.14, -2.53) and Raytheon (RTN 134.90, -3.28) fell by 1.0% and 2.4%, respectively. Today's loss extended Lockheed's post-earnings retreat to 0.8%. Elsewhere, General Electric (GE 32.59, -0.19) ticked lower by 0.6% ahead of tomorrow morning's earnings report. The broader sector has declined 0.9% this week, compared to a 0.2% gain in the benchmark index.
The high-beta chipmakers displayed relative weakness, evidenced by the 1.3% decline in the PHLX Semiconductor Index. In the group, Intel (INTC 34.27, -1.42) fell by 4.0% after disappointing investors with its top-line results. Conversely, iPhone supplier Qualcomm (QCOM 59.98, +4.16) rallied 7.5% after beating top- and bottom-line estimates for the quarter.
The heavyweight health care sector (+0.4%) outperformed amid relative strength in biotechnology. The sub-group traded higher in sympathy with Biogen (BIIB 282.45, +20.04) after the company reported top- and bottom-line beats for the quarter. Health care service plans also outperformed after Humana (HUM 171.53, +13.12) increased its outlook for the year. However, it is worth mentioning that the sub-group was under early selling pressure after the Department of Justice announced that it is seeking to block mergers between Anthem (ANTM 139.00, +3.53) & Cigna (CI 140.32, +7.21) and Aetna (AET 118.30, +1.81) & Humana.
The U.S. Dollar Index (96.94, -0.26) settled modestly lower as the euro and the yen gained ground against the greenback. The single currency ticked higher by 0.1% against the buck (1.1022) while the dollar/yen pair finished lower by 1.1% (105.76). The move in the yen was prompted by commentary out of Japan, which called into question the size and nature of potential easing measures.
The Treasury complex finished higher with yields slipping throughout the group. The yield on the 10-yr note settled lower by three basis points at 1.56%.
Today's trading volume was below the recent average as fewer than 803 million shares changed hands on the NYSE floor.
Today's economic data included weekly initial claims, July Philadelphia Fed Survey, FHFA Housing Price Index for May, Existing Home Sales for June, and June Leading Indicators:
There is no economic data of note scheduled to be released tomorrow.