Stock Market Update

[BRIEFING.COM] The stock market opened to a solid rebound in its mega-cap and tech names, which steadily broadened throughout the day, sending the major averages higher and widening their week-to-date gains past 1.0%. 

The tech-heavy Nasdaq Composite (+0.9%) led the way, with the S&P 500 (+0.6%) and DJIA (+0.3%) also capturing gains. Meanwhile, the small-cap Russell 2000 (+1.3%) and S&P Mid Cap 400 (+1.4%) outperformed as investors rotated back out of more defensive holdings today. 

After a retreat yesterday (and an underwhelming week for that matter), it was unclear how the market's largest names would perform today, especially given Tesla's (TSLA 449.09, +10.12, +2.31%) earnings miss. While Tesla held a loss of nearly 4.0% early on, it remained contained, as other mega-caps showed early strength. Even more encouragingly, Tesla would go on to reverse its early loss as sentiment improved throughout the session, helping the consumer discretionary sector (+0.7%) rise above its flatline. 

Elsewhere in the sector, Las Vegas Sands (LVS 56.89, +6.27, +12.39%) captured one of the widest gains across S&P 500 names after topping estimates and increasing its quarterly dividend. 

The information technology sector (+1.0%) was a driver of the index-level gains, supported by a combination of semiconductor and mega-cap strength. 

A beat-and-raise earnings report from Lam Research (LRCX 147.54, +6.29, +4.45%) saw the PHLX Semiconductor Index rise 2.5%, with NVIDIA (NVDA 182.16, +1.88, +1.04%) among the names that also contributed to a 0.8% advance in the Vanguard Mega Cap Growth ETF. 

The industrials sector (+1.3%) was another top performer today as Honeywell (HON 220.67, +14.06, +6.81%) moved higher after a beat-and-raise report of its own, while earnings strength from Dow (DOW 24.52, +2.82, +13.00%) boosted the materials sector (+1.0%). 

The energy sector (+1.3%) finished similarly, widening this week's gains as crude oil futures settled today's session $3.27 higher (+5.6%) at $61.78 per barrel after the Treasury Department announced sanctions on Russian oil giants Rosneft and Lukoil.

Meanwhile, the defensive consumer staples (-0.4%), utilities (flat), and health care (flat) sectors lagged as investors focused on growth-oriented plays today. The Invesco S&P 500 High Beta ETF closed 1.7% higher after retreating yesterday. 

The real estate sector (-0.1%) also closed slightly lower.

Market sentiment was further lifted by growing optimism over a potential trade deal between the U.S. and China. CNBC reported that President Trump will travel to Asia next week, where he is expected to sign trade agreements with 12 countries. He will meet with Chinese President Xi on October 30 to discuss a potential deal covering soybeans, rare earth metals, nuclear weapons, and TikTok. Trump noted that he does not want China to face the threatened 157% tariffs, calling them unsustainable.

The market ultimately benefitted from a number of tailwinds, with today's advance setting the major averages up for solid week-to-date gains. Tomorrow brings the delayed release of the September Consumer Price Index (Briefing.com consensus: +0.4%), which will be an important gauge for the market's rate cut expectations given the recent data vacuum. 

Additionally, while Tesla (TSLA 449.09, +10.12, +2.31%), Lam Research (LRCX 147.54, +6.29, +4.45%), and IBM (IBM 285.00, -2.51, -0.87%) all reversed course from significant early losses, Netflix (NFLX 1113.59, -2.78, -0.25%) has yet to prompt any buy-the-dip interest, putting further pressure on earnings reports to dazzle heading into next week's mega-cap earnings reports. 

U.S. Treasuries ended Thursday with losses across the curve, as longer tenors dipped from their best levels of the month while the 2-year note deepened last week's reversal from its October high. The 2-year note yield settled up four basis points to 3.48%, and the 10-year note yield settled up four basis points to 3.99%. 

• Nasdaq Composite: +18.8% YTD
• S&P 500: + 14.6% YTD
• Russell 2000: +11.3% YTD
• DJIA: +9.9% YTD
• S&P Mid Cap 400: +5.1% YTD

Reviewing today's data:

• Existing home sales increased 1.5% month-over-month in September to a seasonally adjusted annual rate of 4.06 million (Briefing.com consensus 4.05 million) from an unrevised 4.00 million in August. Sales were up 4.1% on a year-over-year basis.
  • The key takeaway from the report is that home sales in September were aided by falling mortgage rates, which eased (but did not negate) affordability constraints for some home buyers.