Stock Market Update

[BRIEFING.COM] The stock market was in solid form at the start of the session, attempting to build on yesterday's rebound. Gains quickly faded and the major indices ultimately settled with declines. 

The initial upside bias was driven by momentum following yesterday's session. Also, concerns about further unwinding of carry trade positions dissipated somewhat after the Bank of Japan's Deputy Governor Uchida said the bank will not raise rates during market instability and the yen weakened against the dollar (USD/JPY +1.9% to 147.10).

The subsequent downturn was driven by growth concerns that had been put on the backburner yesterday and earlier today. The afternoon retreat was broad and orderly. The S&P 500, which was trading up as much as 1.7% at its high, closed 0.8% lower. The equal-weighted S&P 500 was trading up 1.5% at its intraday high, but settled with a 0.7% decline.

Dow components Amgen (AMGN 312.50, -16.54, -5.0%) and Walt Disney (DIS 85.96, -4.01, -4.5%) underperformed after reporting earnings. Walt Disney's streaming business generated positive operating income for the first time, but demand is weakening for its theme parks. 

Airbnb (ABNB 113.01, -17.46, -13.4%) was another influential laggard after indicating that it is noticing slowing demand from U.S. guests.

Seven of the S&P 500 sectors closed lower and four of them declined more than 1.0%. The consumer discretionary (-1.4%) and information technology (-1.4%) sectors were among the worst performers, clipped by losses in mega cap constituents. Meanwhile, the utilities (+0.6%) and energy (+0.5%) sectors led the pack. 

The 10-yr note yield settled eight basis points higher at 3.97% and the 2-yr note yield settled two basis points higher at 4.00%. On a related note, today's $42 billion 10-yr note auction was poorly received.

• S&P 500: +9.0% YTD
• Nasdaq Composite:+7.9% YTD
• S&P Midcap 400: +3.3% YTD
• Dow Jones Industrial Average: +2.9% YTD
• Russell 2000: +0.4% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index 6.9%; Prior -3.9%
• Weekly EIA Crude Oil Inventories showed a draw of 3.73 million barrels following last week's draw of 3.44 million barrels

Looking ahead to Thursday, market participants will receive the following data:

• 8:30 ET: Weekly Initial Claims (Briefing.com consensus 242,000; prior 249,000) and Continuing Claims (prior 1.877 mln)
• 10:00 ET: June Wholesale Inventories (Briefing.com consensus 0.2%; prior 0.6%)
• 10:30 ET: Weekly natural gas inventories (prior +18 bcf)