Stock Market Update

[BRIEFING.COM] The stock market powered up at today's open, energized by positive responses to earnings reports from Dell (DELL 114.52, +3.78, +3.4%), Autodesk (ADSK 262.23, +4.00, +1.6%), lululemon athletica (LULU 256.21, -2.80, -1.1%), Marvell (MRVL 76.42, +6.58, +9.4%), and MongoDB (MDB 285.74, +40.02, +16.03), and some pleasing economic data, namely the Personal Income and Spending report for July.

Around mid-morning, however, there was a power outage so to speak that sucked the energy out of the major indices and rolled them into negative territory. There wasn't a news catalyst for the reversal, which looked to be a function of selling interest in front of the Labor Day holiday weekend and possibly some month-end activity.

At their highs of the morning, the Nasdaq, S&P 500, Russell 2000, and Dow Jones Industrial Average were up 1.1%, 0.7%, 0.6%, and 0.4%, respectively. Those gains faded away as the large-cap/mega-cap stocks faded away from higher levels and a general sense of attrition took root.

Advancers had been outpacing decliners by a 2-to-1 margin at the NYSE and by an 11-to-6 margin at the Nasdaq. That line has since flipped. Decliners now lead advancers by a nearly 2-to-1 margin at the NYSE and by a 3-to-2 margin at the Nasdaq.

Earlier, ten of the 11 S&P 500 sectors were trading higher with only the energy sector (-0.6%) in negative territory as it dealt with sliding oil prices ($73.75, -2.16, -2.9%) tied to a Reuters report that OPEC+ is likely to raise its output by 180,000 barrels per day in October. Now, there are five sectors trading lower with losses ranging from 0.02% (utilities) to 0.5% (energy), so nothing material in a thinly-traded market that would like to hurry up the closing bell to get on with the three-day weekend.

The consumer discretionary sector (+0.5%) is today's best-performing sector, led by Amazon (AMZN 175.13, +3.01, +1.8%) and Tesla (TSLA 209.51, +3.23, +1.6%).

Reviewing today's economic data:

• Personal income was up 0.3% month-over-month in July (Briefing.com consensus 0.2%) following an unrevised 0.2% increase in June. Personal spending jumped a healthy 0.5% (Briefing.com consensus 0.5%) following a 0.3% increase in June. The PCE Price Index was up 0.2% (Briefing.com consensus 0.2%), leaving it up 2.5% year-over-year, unchanged from June. The core-PCE Price Index was up 0.2% (Briefing.com consensus 0.2%), leaving it up 2.6% year-over-year, unchanged from June.
  • The key takeaway from this report is the recognition that it meshes nicely with the market's prevailing view that the U.S. economy will be able to avoid a hard landing and that the Fed will cut its policy rate because inflation is moving back toward the 2% goal.
• The August Chicago PMI checked in at 46.1 versus 45.3 in July. A number below 50.0 is indicative of a contraction in activity; however, the improvement versus July suggests the pace of contraction slowed in August.
• The final reading for the August University of Michigan Index of Consumer Sentiment crossed at 67.9 (Briefing.com consensus 67.8) versus the preliminary reading of 67.8.
  • The key takeaway from the report is that consumers' short-run and long-run economic outlook improved.