Stock Market Update

[BRIEFING.COM] The stock market started the session on a softer note, responding to rising geopolitical tension. This followed reports that President Putin had reduced Russia's threshold for using nuclear weapons, that Ukraine had fired U.S.-made missiles into Russia, and that Russian Foreign Minister Lavrov had described the attack on Russia as an "escalation signal."

Stocks have largely shaken off fears about the situation in Ukraine for now and the bond market is not trading in a panicky-fashion, which helped stabilize the equity market. The 10-yr yield is down three basis points to 4.38% and the 2-yr yield is down one basis point to 4.27%. 

Some defense-related stocks have still outperformed the broader equity market today in response to the geopolitical developments. Northrop Grumman (NOC 492.72, +4.04, +0.8%), Boeing (BA 144.56, +0.72, +0.5%), and Lockheed Martin (LMT 532.99, +2.03, +0.4%) are among the influential names in the space.

Market breadth was negative shortly after the open, but reflects more mixed action now. Shortly after the open, decliners led advancers by a 2-to-1 margin at the NYSE and by a 4-to-3 margin at the Nasdaq. Now, decliners lead advancers by an 11-to-10 margin at the NYSE while advancers lead decliners by a fractional margin at the Nasdaq.

Dow component Walmart (WMT 87.34, +3.26, +3.9%) has been an influential winner through the session following its earnings report. This price action has contributed to the gain in the S&P 500 consumer discretionary sector (+0.3%). The information technology (+0.6%) and communication services (+0.4%) sectors have also held up well today, reflecting relative strength in the mega cap space.

Reviewing today's economic data:

• October Housing Starts 1.311 mln (Briefing.com consensus 1.340 mln); Prior was revised to 1.353 mln from 1.354 mln, October Building Permits 1.416 mln (Briefing.com consensus 1.441 mln); Prior was revised to 1.425 mln from 1.428 mln
  • The key takeaway from the report is that it included some weather impact from the hurricanes, evidenced by a 10.2% month-over-month decline in starts in the South -- the nation's largest homebuilding region -- but overall it was a generally soft report on a year-over-year basis with total starts down 4.0% and total permits down 7.7%.