Stock Market Update

[BRIEFING.COM] The session started a little shaky, but stocks quickly shifted into rally-mode as investors digested NVIDIA's (NVDA 146.67, +0.78, +0.5%) Q3 earnings report. Shares of NVDA initially traded lower due to profit-taking activity and due to a slight deceleration in its revenue growth rate. The report was solid overall, though, and the company said demand for its Blackwell chip is "staggering."

There was a positive bias under the index surface through the entire session despite the early weakness in NVDA. Other mega caps were weak through the entire session as money rotated away from those names into other areas of the market. 

The S&P 500 (+0.5%), Dow Jones Industrial Average (+1.1%), and Russell 2000 (+1.7%) closed near their best levels of the session. The Nasdaq Composite trailed its peers, closing fractionally higher than yesterday.

Broad buying activity left the Invesco S&P 500 Equal Weight ETF (RSP) 1.3% higher today and left nine out of the 11 S&P 500 sectors higher. Five sectors were higher by 1.0% or more, led by utilities (+1.8%), financials (+1.3%), consumer staples (+1.2%), and industrials (+1.2%).

The industrial sector was boosted by an earnings-related gain in Deere & Co. (DE 437.54, +32.58, +8.1%). Meanwhile, the communication services sector was the worst performer by a wide margin, dropping 1.7%, due to a sizable decline in Alphabet (GOOG 169.24, -8.09, -4.6%) after reports that the DOJ is pushing for a forced sale of Chrome and potentially Android.

The Treasury market closed with losses after a stronger-than-expected Existing Home Sales report for October (3.96 mln; Briefing.com consensus 3.90 mln), which followed another decrease in weekly jobless claims (to 213,000 form 219,000), and a disappointing Philadelphia Fed Survey (-5.5; Briefing.com consensus 7.0).

The 10-yr yield settled three basis points higher at 4.43% and the 2-yr yield settled four basis points higher at 4.35%.

• Nasdaq Composite: +26.4%
• S&P 500: +24.7%
• S&P Midcap 400: +18.2%
• Russell 2000: +16.6%
• Dow Jones Industrial Average: +16.4%

Reviewing today's economic data:

• Weekly Initial Claims 213K (Briefing.com consensus 221K); Prior was revised to 219K from 217K, Weekly Continuing Claims 1.908 mln; Prior was revised to 1.872 mln from 1.873 mln
  • The key takeaway from the report is that the rising trend for continuing jobless claims connotes a softening labor market whereby it has become more challenging to find a new job after being laid off.
• November Philadelphia Fed Index -5.5 (Briefing.com consensus 7.0); Prior 10.3
• October Existing Home Sales 3.96 mln (Briefing.com consensus 3.90 mln); Prior was revised to 3.83 mln from 3.84 mln
  • The key takeaway from the report is that more inventory is becoming available, but with the ongoing increase in the median home price and mortgage rates remaining elevated, affordability constraints will persist, capping total sales potential.
• October Leading Home Sales -0.4% (Briefing.com consensus -0.3%); Prior was revised to -0.3% from -0.5%

Friday's economic lineup features:

• 9:45 ET: Flash November S&P Global U.S. Manufacturing PMI (prior 48.5) and flash November S&P Global U.S. Services PMI (prior 55.0)
• 10:00 ET: Final November University of Michigan Consumer Sentiment (Briefing.com consensus 73.0; prior 73.0)