Stock Market Update

[BRIEFING.COM] The standing of the major indices has been mixed throughout today's trade with the Nasdaq Composite and S&P 500 holding an edge over the Dow Jones Industrial Average and Russell 2000. Continued strength in NVIDIA (NVDA 123.35, +2.47, +2.1%), and a handful of other mega-cap stocks, has been largely responsible for the split performance in what has been an otherwise sluggish market.

Breadth figures reveal the weakness beneath the index surface. Decliners lead advancers by a 2-to-1 margin at the NYSE and a 13-to-7 margin at the Nasdaq. The equal-weighted S&P 500 is down 0.6%.

There isn't any intense selling pressure outside of some individual stocks. Rather, today's session has featured an orderly drift lower for the broader market in what can be labeled a consolidation trade after a big run.

Unlike yesterday, there has been a muted response to the People's Bank of China carrying on with more policy stimulus in the form of a 30-basis points reduction to its Medium-Term Lending Facility. Elsewhere, Sweden's Riksbank cut its policy rate by 25 basis points to 3.25% and hinted at a faster pace of easing in coming months.

The response to a better-than-expected new home sales report for August, and a strong 11% week-over-week increase in the MBA's Mortgage Applications Index, has also been muted.

There hasn't been a lot of movement in the S&P sectors. There is only one -- energy (-1.9%) -- that is up, or down, more than 1.0%. This sector is following oil prices lower, which is remarkable given a headline backdrop today that has featured reports of Hezbollah firing a missile at Tel Aviv. That missile was intercepted; nonetheless, it speaks to the escalating tension between the two parties. Still, Brent crude futures are down 2.0% to $72.98/bbl and WTI crude futures are down 2.5% to $69.79/bbl.

Health care (-0.7%) is the next worst-performing sector followed by financials (-0.6%) and consumer discretionary (-0.5%). The latter has been afflicted by Morgan Stanley downgrades of sector component Ford (F 10.44, -0.43, -4.0%) and General Motors (GM 45.47, -2.60, -5.4%) that were attributed to concerns about Chinese competition and deteriorating credit quality in the U.S. Morgan Stanley also downgraded Rivian Automotive (RIVN 11.19, -0.65, -5.5%).

Today's best-performing sectors include the utilities (+0.5%) and information technology (+0.4%) sectors.

Reviewing today's economic data:

• MBA Mortgage Applications Index +11.0% wk/wk with refinance applications +20% and purchase applications +1%
• August New Home Sales 716K (Briefing.com consensus 695K); Prior was revised to 751K from 739K
  • The key takeaway from the report is that new home sales, which are tabulated when contracts are signed, were better than expected in August, aided by lower pricing and sliding mortgage rates. Notably, the South was the only region that saw a pickup in sales month-to-month.