Stock Market Update

[BRIEFING.COM] A technical update by CrowdStrike (CRWD 304.96, -38.09, -11.1%) that had a flaw in it wreaked havoc around the globe today since it infiltrated Microsoft's (MSFT 437.11, -3.26, -0.7%) operating system and left IT managers scrambling to implement a fix that would get things running smoothly again after CrowdStrike identified the flaw and rolled back its update.

Reports indicated that there were major disruptions at airports around the world, that emergency management systems were not functioning properly, and that media companies, as well as many other businesses, had their normal business operations disrupted.

This upheaval set the tone for what was an otherwise underwhelming day for the stock market, which was saddled with negative responses to the earnings reports from Netflix (NFLX 633.34, -9.70, -1.5%), and Dow components American Express (AXP 242.52, -6.68, -2.7%) and Travelers (TRV 203.54, -17.06, -7.7%), along with a general sense that the stock market is in the midst of a consolidation period after its spirited run to record highs.

The latter has manifested itself in the mega-cap stocks, which were once again unable to hold a buy-the-dip trade today. The Vanguard Mega-Cap Growth ETF (MGK) had been up as much as 0.6% but finished with a 0.6% loss, leaving it down 4.0% for the week.

Similarly, the Philadelphia Semiconductor Index ran into more selling pressure. It declined 3.1% today, finishing at its lows, and was down 8.8% for the week.

Notwithstanding the losses registered by the major indices, there wasn't any concerted selling interest outside the semiconductor group and some individual stocks with news. The affliction for the market was that there wasn't any conviction on the part of buyers.

Decliners led advancers by a 9-to-5 margin at the NYSE and by a roughly 13-to-7 margin at the Nasdaq.

Nine of the 11 S&P 500 sectors finished lower with losses ranging from 0.1% (real estate) to 1.3% (information technology and energy). The health care sector (+0.5%) was a winning standout and the utilities sector (+0.1%) also qualified as a relative strength leader. The equal-weighted S&P 500 declined 0.7%, matching the loss for the market-cap weighted S&P 500, and the Russell 2000 fell 0.6%.

The 2-yr note yield increased five basis points to 4.51% and the 10-yr note yield increased five basis points to 4.24%. There was no U.S. economic data of note today.

• Nasdaq Composite:+18.1% YTD
• S&P 500: +15.4% YTD
• S&P Midcap 400: +8.4% YTD
• Russell 2000: +7.8% YTD
• Dow Jones Industrial Average: +7.0% YTD