Stock Market Update

[BRIEFING.COM] The stock market has moved off its opening lows as the session has progressed, but major indices still show solid losses. The Dow Jones Industrial Average is 2.3% lower, the Russell 2000 sports a 2.5% decline, the S&P 500 is down 2.5%, and the Nasdaq Composite trades 3.0% lower. 

The global sell off that began last week in response to recession worries has continued, aided by the rapid strengthening in the yen against the dollar. This put continued pressure on the carry trade and helped send Japan's Nikkei (-12.4%) to its lowest level since early September.

The price action in Treasuries had the 2-yr yield briefly move below the 10-yr note yield for the first time in about 2 years. Buying dissipated, though, in response to a better-than-expected ISM Non-Manufacturing Index for July (51.4%; Briefing.com consensus 51.3%). The 10-yr note yield hit 3.67% earlier, but sits at 3.80% now. The 2-yr note yield hit 3.65% earlier, but sits at 3.90% now.

Today's action has the S&P 500 flirting with correction territory, trading about 10% below its high close on July 16. Just about everything is coming along for the downside ride. All 11 S&P 500 sectors are lower by at least 1.6%.

Only about 30 stocks in the S&P 500 are trading higher. Kellanova (K 70.94, +7.96, +12.6%) is the top performer from the group after reports that Mars is mulling an acquisition of the snack maker. ON Semiconductor (ON 70.61, +2.66, +3.9%) is another winning standout, going against the grain in the semiconductor space.

Reviewing today's economic data:

• July S&P Global US Services PMI - Final 55.0; Prior 56.0
• July ISM Non-Manufacturing Index 51.4% (Briefing.com consensus 51.3%); Prior 48.8%
  • The key takeaway from the report is that overall activity in the largest sector of the U.S. economy rebounded strongly with Indices for Business Activity and Employment jumping back into expansionary territory after contracting in June.