Stock Market Update

[BRIEFING.COM] U.S. stocks bounced back on Tuesday, recovering a bulk of yesterday's losses as investors bought the dip amid waning coronavirus concerns. The Nasdaq Composite led the rebound with a 1.4% gain, while the S&P 500 (+1.0%), Dow Jones Industrial Average (+0.7%), and Russell 2000 (+0.9%) followed behind. 

The day began with modest gains, as the market looked past disappointing earnings reports from 3M (MMM 165.56, -10.07, -5.7%) and Pfizer (PFE 38.14, -2.02, -5.0%), then stocks climbed higher soon after the Conference Board released its Consumer Confidence Index for January. That index rose to 131.6 (Briefing.com consensus 128.0) from 128.2 in December. 

All 11 S&P 500 sectors contributed to the rally, including five that rose at least 1.0%. The information technology sector (+1.9%) led the charge on the back of Apple (AAPL 317.69, +8.74, +2.8%), which was set to release its earnings report after the close. Shares got an added lift on reports Apple asked suppliers to raise iPhone production levels by more than 10% over the last year.

The Philadelphia Semiconductor Index, which was among yesterday's worst-performing groups, rose 2.4%. The consumer staples sector, which was among yesterday's best-performing groups, increased just 0.1%.

As for the coronavirus, there weren't too many positive developments on the situation, as more cases and deaths were confirmed in China with additional travel restrictions enacted. Investors, however, appeared placated by the fact that it remained under control in the U.S. Any negative impact to earnings growth, thus, might be transitory or minimal.

In other earnings news, United Technologies (UTX 152.86, +1.83, +1.2%) and Lockheed Martin (LMT 437.17, +4.79, +1.1%) were some of the more notable companies today that beat top and bottom-line estimates.

U.S. Treasuries gave back some of their recent gains, sending yields modestly higher. The 2-yr yield increased three basis points to 1.46%, and the 10-yr yield increased four basis points to 1.64%. The U.S. Dollar Index finished flat at 97.98. WTI crude rose 0.7%, or $0.39, to $53.40/bbl. 

Reviewing Tuesday's economic data:

• The Conference Board's Consumer Confidence Index rose to 131.6 in January (Briefing.com consensus 128.0) from an upwardly revised 128.2 (from 126.5) in December.
  
  •  The key takeaway from the report is that the survey group remains optimistic about the overall situation, as nearly 41% of respondents described business conditions as good while 49% of respondents believed that jobs are plentiful.
• Total durable goods orders rose 2.4% m/m in December (Briefing.com consensus +0.5%) following a downwardly revised 3.1% decline (from -2.0%) in November. Excluding transportation, durable goods orders slipped 0.1% (Briefing.com consensus +0.3%) on the heels of a downwardly revised 0.4% decline (from 0.0%) in November.
  • The key takeaway from the report is that nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- declined 0.9% after increasing just 0.1% in November. Shipments of these goods, which factor into GDP computations, were down 0.4% following a 0.3% decline in November.
• The S&P Case-Shiller Home Price Index increased 2.6% yr/yr in November (Briefing.com consensus 2.5%) following a 2.2% yr/yr increase in December.

Looking ahead, investors will receive the following on Wednesday: an FOMC Rate Decision, Pending Home Sales for December, the weekly MBA Mortgage Applications Index, and the Advance reports for Wholesale Inventories, Retail Inventories, and Trade in Goods.

• Nasdaq Composite +3.3% YTD
• S&P 500 +1.4% YTD
• Dow Jones Industrial Average +0.7% YTD
• Russell 2000 -0.6% YTD