Stock Market Update

[BRIEFING.COM] The stock market had a mixed showing. The market initially moved higher in response to some economic releases and to solid quarterly results from Alphabet (GOOG 176.14, +5.00, +2.9%). The S&P 500 was up as much as 0.3% and the Nasdaq Composite was up as much as 0.4% at the highs of the day.

This morning's data featured ADP's private-sector payroll estimate, which increased by a larger-than-expected 233,000 in October and the September numbers were revised higher. Also, the advance Q3 GDP report reflected solid growth in the economy, boosted by consumer spending.

Early buying enthusiasm faded, though, with no specific catalyst to account for the deterioration. Ultimately, the S&P 500 settled 0.3% lower than yesterday and the Nasdaq Composite declined 0.6%.

Many stocks pulled back from session highs, but downside moves were relatively limited. The equal-weighted S&P 500 declined 0.2% compared to yesterday's close.

Semiconductor stocks extended opening losses in the afternoon trade, adding pressure to the major indices. Chipmakers showed weakness through the entire session after earnings and soft Q4 revenue guidance from Advanced Micro Devices (AMD 148.60, -17.65, -10.6%).

The initial rally in the stock market occurred despite volatile action in the Treasury market today. The 10-yr yield hit 4.20% at its lowest level and settled at 4.27%. 

• Nasdaq Composite: +24.0% YTD
• S&P 500: +21.9% YTD
• Dow Jones Industrial Average: +11.8% YTD
• S&P Midcap 400: +12.8% YTD
• Russell 2000: +10.2% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index -0.1%; Prior -6.7%
• October ADP Employment Change 233K (Briefing.com consensus 105K); Prior was revised to 159K from 143K
  • The key takeaway from the report is that the payroll gains were broad based by sector, region, and establishment size, underscoring the point that economic activity remains solid and not at all consistent with an economy on the cusp of a recession.
• Q3 GDP-Adv. 2.8% (Briefing.com consensus 3.0%); Prior 3.0%, Q3 Chain Deflator-Adv. 1.8% (Briefing.com consensus 2.3%); Prior 2.5%
  • The key takeaway from the report is that GDP growth was powered by healthy levels of consumer spending. Personal consumption expenditures increased 3.7%. That was the strongest growth rate since the first quarter of 2023 and well in excess of the prior 10-quarter average of 2.3%. The PCE component contributed 2.46 percentage points to real GDP growth in the third quarter.
• September Pending Home Sales 7.4% (Briefing.com consensus 2.5%); Prior 0.6%

Friday's economic calendar features:

• 8:30 ET: September Personal Income (Briefing.com consensus 0.4%; prior 0.2%), Personal Spending (Briefing.com consensus 0.4%; prior 0.2%), PCE Prices (Briefing.com consensus 0.2%; prior 0.1%), and Core PCE Prices (Briefing.com consensus 0.2%; prior 0.1%), Q3 Employment Cost Index (Briefing.com consensus 1.0%; prior 0.9%), weekly Initial Claims (Briefing.com consensus 229,000; prior 227,000), and Continuing Claims (prior 1.897 mln)
• 9:45 ET: October Chicago PMI (Briefing.com consensus 47.5; prior 46.6)
• 10:30 ET: Weekly natural gas inventories (prior +80 bcf)