Stock Market Update

[BRIEFING.COM] Today's trade features broad buying activity. The S&P 500 (+0.8%), Dow Jones Industrial Average (+0.8%), Nasdaq Composite (+0.9%), and Russell 2000 (+1.0%) all show solid gains thus far.

The upside bias is driven by carryover momentum and ongoing strength in the semiconductor space. The PHLX Semiconductor Index (SOX) shows a 1.5% gain today, bringing its gain this week to 6.4%. 

The equity market had a muted response to this morning's hotter-than-expected Producer Price Index for June and upward revisions to the numbers in May. Total PPI was up 0.2% versus an expected 0.1% increase and Core PPI was up 0.4% versus an expected 0.1% increase. 

Treasuries also had a muted response to the data. The 10-yr yield is up one basis point at 4.20% and the 2-yr note yield is down four basis points to 4.47%.

The broad based rally in stocks has ten of the 11 S&P 500 sectors trading higher led by information technology (+1.4%) and consumer discretionary (+1.3%). The communication services sector is alone in negative territory. 

Market participants are also digesting quarterly results from JPMorgan Chase (JPM 206.06, -1.40, -0.7%), Citigroup (C 64.50, -1.21, -1.8%), and Wells Fargo (WFC 56.80, -3.35, -5.6%), which garnered negative responses despite beating earnings estimates. 

Reviewing today's economic data:

• June PPI 0.2% (Briefing.com consensus 0.1%); Prior was revised to 0.0% from -0.2%; June Core PPI 0.4% (Briefing.com consensus 0.1%); Prior was revised to 0.3% from 0.0%
  • The key takeaway from the report is that the year-over-year rate for PPI and core PPI accelerated for the fifth month out of the last six with rising prices of services outweighing falling prices of goods in June.
• July Univ. of Michigan Consumer Sentiment - Prelim 66.0 (Briefing.com consensus 67.5); Prior 68.2
  • The key takeaway from the report was that it showed little change relative to June, as many consumers remained burdened by high prices, though inflation expectations dipped slightly.