Stock Market Update

[BRIEFING.COM] The stock market extended this week's losses, reflecting ongoing profit-taking after last week's record highs and a huge run since the start of the year. The three major indices spent most of the morning near their prior closing levels before selling picked up in the afternoon. 

The S&P 500 (-0.3%), Nasdaq Composite (-0.3%), and Dow Jones Industrial Average (-0.4%) settled near their worst levels of the day. Downside moves in the major indices coincided with some mega caps reversing early gains. NVIDIA (NVDA 135.07, -3.74, -2.7%), Amazon.com (AMZN 225.04, -1.05, -0.5%), and Eli Lilly (LLY 799.58, -4.00, -0.5%) were among the influential laggards after a big year of gains. NVDA shares are 171.7% higher in 2024, AMZN shares are 48.1% higher since the start of the year, and LLY shares sit on a 37.2% gain.  

Significant moves were reserved for stocks with specific catalysts. Oracle (ORCL 177.74, -12.71, -6.7%) declined nearly 7% after a disappointing fiscal Q2 earnings report, missing the consensus EPS estimate compiled by FactSet, and issuing lower-than-expected guidance for fiscal Q3. 

Conversely, Alaska Air (ALK 61.29, +7.13, +13.2%) surged after announcing an impressive three-year strategic plan during its Investor Day, alongside fiscal year 2025 EPS guidance that exceeded current consensus expectations. Alphabet (GOOG 186.53, +9.43, +5.3%) rose as much as 6.2% at its peak after unveiling its new Willow quantum computing chip. Also, Piper Sandler named the stock to a "Top Pick."

Kroger (KR 60.73, +2.96, +5.1%) was another story stock, jumping after a report indicating that Kroger's M&A deal with Albertson's (ACI 18.51, -0.43, -2.3%) was blocked by a judge.

The lackluster performance of the major indices reflected a sense of caution ahead of tomorrow’s release of the November Consumer Price Index at 8:30 ET. Treasury yields edged higher in anticipation of the report. The 10-yr yield settled two basis points higher at 4.22% and the 2-yr yield settled two basis points higher at 4.15%.

• Nasdaq Composite: +31.2% YTD
• S&P 500: +26.5% YTD
• S&P Midcap 400: +18.4% YTD
• Russell 2000: +17.6% YTD
• Dow Jones Industrial Average: +17.4% YTD

Reviewing today's economic data: 

• November NFIB Small Business Optimism 101.7; Prior 93.7
• Q3 Productivity-Rev. 2.2% (Briefing.com consensus 2.2%); Prior 2.2%, Q3 Unit Labor Costs-Rev. 0.8% (Briefing.com consensus 1.9%); Prior 1.9%
  • The key takeaway from the report is the inflation-friendly indicator of unit labor costs rising in more modest proportions in the third quarter.

Wednesday's economic lineup includes:

• 7:00ET: Weekly MBA Mortgage Index (prior 2.8%)
• 8:30 ET: November CPI (Briefing.com consensus 0.3%; prior 0.2%) and Core CPI (Briefing.com consensus 0.3%; prior 0.3%)
• 10:30 ET: Weekly crude oil inventories (prior -5.07 mln)
• 14:00 ET: November Treasury Budget (prior -$257.0 bln)