Stock Market Update

[BRIEFING.COM] The stock market recovered a bit today following sharp declines yesterday in response to the news about DeepSeek. The S&P 500 closed 0.9% higher than its prior close and the Nasdaq Composite jumped 2.0%, closing near their best levels of the day. The Dow Jones Industrial Average (+0.3%) and Russell 2000 (+0.2%) also closed in positive territory. 

The upside action was led by mega caps and chipmakers, and NVIDIA (NVDA 128.86, +10.44, +8.8%) was chief among them after logging its largest single-day loss in market capitalization ever in yesterday's session. Shares were trading higher through most of the session, but buying picked up in the afternoon trade.

Gains were still muted, though, compared to the scope of yesterday's declines. NVDA shares plunged 17% yesterday and the PHLX Semiconductor Index (SOX), which closed 1.1% higher today, sank 9.2% yesterday. 

Microsoft (MSFT 447.05, +12.49, +2.9%) and Meta Platforms (META 674.33, +14.45, +2.2%), which report quarterly results after Wednesday's close, along with Apple (AAPL 238.26, +8.40, +3.7%), which reports earnings after Thursday's close, were among the top performers in today's trade.

The buying interest in mega caps and semiconductor shares didn't pass through to the broader equity market. The equal-weighted S&P 500 closed 0.5% lower and eight of the 11 S&P 500 sectors registered losses ranging from 0.2% (financials) to 1.5% (consumer staples). 

This price action was influenced by mixed responses to earnings news from names like Royal Caribbean (RCL 265.25, +28.43, +12.0%), Boeing (BA 177.78, +2.62, +1.5%), General Motors (GM 50.04, -4.88, -8.9%), and Lockheed Martin (LMT 457.45, -46.24, -9.2%).

• Dow Jones Industrial Average: +5.4% YTD
• S&P Midcap 400: +4.0% YTD
• S&P 500: +3.2% YTD
• Russell 2000: +2.6% YTD
• Nasdaq Composite: +2.2% YTD

Reviewing today's economic data:

• December Durable Orders -2.2% (Briefing.com consensus 0.4%); Prior was revised to -2.0% from -1.1%, December Durable Goods - ex transportation 0.3% (Briefing.com consensus 0.5%); Prior -0.1%
  • The key takeaway from the report, though, is the understanding that new orders for nondefense capital goods excluding aircraft -- a proxy for business spending -- were up 0.5% on the heels of a 0.9% increase in November, thereby softening the disappointment of the headline number.
• November FHFA Housing Price Index 0.3%; Prior was revised to 0.5% from 0.4%
• November S&P Case Shiller Home Price Index 4.3% (Briefing.com consensus 4.2%); Prior 4.2%
• January Consumer Confidence 104.1 (Briefing.com consensus 108.1); Prior was revised to 109.5 from 104.7
  • The key takeaway from the report is that consumers, in general, remained pessimistic about future employment prospects.

Looking ahead to Wednesday, market participants receive the following economic data:

• 7:00 ET: Weekly MBA Mortgage Index (prior 0.1%)
• 8:30 ET: December advance International Goods Trade Balance (prior -$102.9 bln), advance Retail Inventories (prior 0.3%), and advance Wholesale Inventories (prior -0.2%)
• 10:30 ET: Weekly crude oil inventories (prior -1.02 mln)