Stock Market Update

[BRIEFING.COM] It is shaping up to be a solid session after a shaky start. Early losses in the mega cap space clipped index performance initially, but there was buying activity under the index surface through the entire session. 

Shortly after the open, advancers led decliners by a 5-to-2 margin at the NYSE and a 3-to-1 margin at the Nasdaq. The Dow Jones Industrial Average opened fractionally lower and quickly moved into positive territory while the Russell 2000 opened higher and extended its gain through the day.

Improvement in the S&P 500 and Nasdaq Composite coincided with mega cap stocks recovering from opening losses. Apple (AAPL 220.24, +2.39, +1.3%), Amazon.com (AMZN 183.30, +2.48, +1.3%), and NVIDIA (NVDA 115.95, +1.72, +1.5%) are standouts in that respect after trading down early on.

Tesla (TSLA 225.24, +9.19, +4.3%) is another winning standout in the mega cap space, maintaining a positive bias through the entire session after yesterday's 12% decline.

The upside bias stems from buy-the-dip interest after yesterday's disappointing price action led the the Nasdaq to suffer its worst decline (-3.6%) since October 2022.

Buying activity has led the S&P 500 to reclaim a posture above its 50-day moving average (5,432), which invited additional buying interest that has the major indices trading at session highs. 

This morning's economic releases were in-line with the market's soft landing expectation, which has also acted as support for equities. 

Losses are reserved for individual names with specific catalysts. Honeywell (HON 204.85, -8.80, -4.1%) and Ford Motor (F 11.39, -2.28, -16.6%) are losing standouts after reporting earnings news. Meanwhile, IBM (IBM 195.27, +11.29, +6.1%) and ServiceNow (NOW 847.71, +116.84, +16.0%) are winning standouts after reporting earnings.

Reviewing today's economic data:

• Q2 GDP-Adv. 2.8% (Briefing.com consensus 1.9%); Prior 1.4%; Q2 Chain Deflator-Adv. 2.3% (Briefing.com consensus 2.6%); Prior 3.1%
  • The key takeaway from the report is that it didn't show any breakdown in consumer spending. In fact, consumer spending growth accelerated, increasing 2.3% on the heels of a 1.5% increase in the first quarter.
• Weekly Initial Claims 235K (Briefing.com consensus 240K); Prior was revised to 245K from 243K; Weekly Continuing Claims 1.851 mln; Prior was revised to 1.860 mln from 1.867 mln
  • The key takeaway from the report is that there hasn't been an alarming jump in initial claims -- a leading indicator -- to even higher levels; therefore, a conclusion will be drawn that the labor market is seeing some normal slowing as opposed to a rapid deterioration.
• June Durable Orders -6.6% (Briefing.com consensus 0.4%); Prior 0.1%; June Durable Goods -ex transportation 0.5% (Briefing.com consensus 0.2%); Prior -0.1%
  • The key takeaway from the report is that the weakness was driven by a large drop in nondefense aircraft and parts orders, which are volatile. An added takeaway is that business spending in June was quite solid, evidenced by the 1.0% increase in new orders for nondefense capital goods excluding aircraft.