Stock Market Update

[BRIEFING.COM] The major indices have exhibited mixed action today, but moves in either direction are limited. Market breadth favors advancers, but margin are narrow due to a lack of conviction from either buyers or sellers. Advancers have a roughly 3-to-2 lead over decliners at the NYSE and a roughly 4-to-3 lead at the Nasdaq.

Losses in the semiconductor space after Micron's (MU 133.42, -8.94, -6.3%) earnings report have acted as a limiting factor for the broader market. NVIDIA (NVDA 124.61, -1.83, -1.5%) trades down in sympathy. The PHLX Semiconductor Index (SOX) is down 0.3%.

Meanwhile, gains in some mega cap names have provided some offsetting support. The Vanguard Mega Cap Growth ETF (MGK) shows a 0.4% gain. Strength in their mega cap components has propelled the consumer discretionary (+0.8%) and communication services (+0.6%) sectors to outperform the broader market. The information technology sector also shows a slim gain despite losses in its semiconductor components.

Some bank stocks are trading higher the Fed's stress test showed that the 31 large banks subject to the test this year have sufficient capital. The SPDR S&P Bank ETF (KRE) is trading 0.7% higher and the SPDR S&P Regional Banking ETF (KRE) shows a 0.6% gain.

Still, the S&P 500 financial sector is trading 0.2% lower.

Treasury yields are lower following this morning's data, but that hasn't translated into support for stocks. The 10-yr note yield sits at 4.28% and the 2-yr note yield sits at 4.70% now.

Reviewing today's economic data:

• May Adv. Intl. Trade in Goods -$100.6 bln; Prior was revised to -$98.0 bln from -$99.4 bln
• May Adv. Retail Inventories 0.7%; Prior 0.7%
• May Adv. Wholesale Inventories 0.6%; Prior 0.2%
• Weekly Initial Claims 233K (Briefing.com consensus 238K); Prior was revised to 239K from 238K; Weekly Continuing Claims 1.839 mln; Prior was revised to 1.821 mln from 1.828 mln
  • The key takeaway from the report is the elevated level of continuing jobless claims, which suggests laid-off workers are facing longer wait times before finding a new job, which would be a symptom of a softening labor market.
• May Durable Orders 0.1% (Briefing.com consensus -1.2%); Prior was revised to 0.2% from 0.7%; May Durable Orders -ex transportation -0.1% (Briefing.com consensus 0.2%); Prior 0.4%
  • The key takeaway from the report is that new orders for nondefense capital goods excluding aircraft -- a proxy for business spending -- declined 0.6% month-over-month.
• Q1 GDP- Third Estimate 1.4% (Briefing.com consensus 1.3%); Prior 1.3%; Q1 GDP Deflator - Third Estimate 3.1% (Briefing.com consensus 3.1%); Prior 3.0%
  • The key takeaway from the report is that it is dated (we're just days away from the end of Q2) so its impact should be limited; however, the slowdown in personal spending is noteworthy in light of more anecdotal evidence in the interim that suggests consumers, in aggregate, are reining in their discretionary spending.
• May Pending Home Sales -2.1% (Briefing.com consensus 2.3%); Prior -7.7%