Stock Market Update

[BRIEFING.COM] The stock market closed mostly higher after a soft start to the week. Some buy-the-dip action contributed to the positive bias, which was boosted by surging shares of Tesla (TSLA 260.46, +46.83, +21.9%) after impressive Q3 earnings and a 2025 vehicle growth estimate. 

The upside bias was also related to a drop in market rates. The 2-yr yield settled two basis points lower at 4.07% and the 10-yr yield settled four basis points lower at 4.20%.

The S&P 500 settled 0.2% higher and the Nasdaq Composite closed up 0.8% compared to yesterday. The S&P 500 is still 0.9% lower since Friday and the Nasdaq Composite is 0.4% lower for the week. 

The Dow Jones Industrial Average (-0.3%) underperformed major indices due to losses in IBM (IBM 218.39, -14.36, -6.2%), Honeywell (HON 209.10, -11.24, -5.1%), and Boeing (BA 155.20, -1.86, -1.2%). IBM and Honeywell reported earnings results and Boeing trades down on news that workers voted 64% against accepting the latest contract proposal put forth by their employer.

Other influential names like Whirlpool (WHR 110.37, +11.09, +11.2%), Mattel (MAT 18.57, +0.79, +4.4%), Lam Research (LRCX 76.57, +3.71, +5.1%), and ServiceNow (NOW 956.58, +48.90, +5.4%) settled higher in response to earnings news, providing added support to the broader market. 

Union Pacific (UNP 230.75, -10.60, -4.4%), United Rentals (URI 824.99, -9.19, -1.1%), and Harley Davidson (HOG 31.67, -2.46, -7.2%) were among the names that traded down after reporting earnings results. 

The S&P 500 communication services sector was a top performer, jumping 3.2% thanks to Tesla and Amazon.com (AMZN 186.38, +1.67, +0.9%). The materials sector logged the largest decline, down 1.4% from yesterday.

• Nasdaq Composite: +22.7% YTD
• S&P 500: +21.8% YTD
• Dow Jones Industrial Average: +12.4% YTD
• S&P Midcap 400: +12.5% YTD
• Russell 2000: +9.5% YTD

Reviewing today's economic data: 

• Weekly Initial Claims 227K (Briefing.com consensus 246K); Prior was revised to 242K from 241K, Weekly Continuing Claims 1.897 mln; Prior was revised to 1.869 mln from 1.867 mln
  • The key takeaway from the report is that, while it might still contain some noise from the effects of the hurricanes, the initial claims data from both a seasonally adjusted and unadjusted basis connote a labor market that is still operating on solid ground that is a long way from recession-like territory.
• October S&P Global US Manufacturing PMI - Prelim 47.8; Prior 47.3
• October S&P Global US Services PMI - Prelim 55.3; Prior 55.2
• September New Home Sales 738K (Briefing.com consensus 713K); Prior was revised to 709K from 716K
  • The key takeaway from the report is that new home sales, which are tabulated when contracts are signed, likely enjoyed a tailwind from the drop in mortgage rates seen in September ahead of the FOMC decision, but with rates higher now than they were before the September 18 rate cut, it is reasonable to think October new home sales won't look as good.

Looking ahead, Friday's economic lineup includes:

• 8:30 ET: September Durable Orders (Briefing.com consensus -0.9%; prior 0.0%) and Durable Orders ex-transport (Briefing.com consensus -0.1%; prior 0.5%)
• 10:00 ET: Final October University of Michigan Consumer Sentiment (Briefing.com consensus 68.9; prior 68.9)