Stock Market Update

[BRIEFING.COM] The stock market moved steadily higher today as strength in mega-cap technology lifted the major averages alongside improving broader-market participation. 

The S&P 500 (+0.5%) notched a fresh record closing high of 6,909.79, while the tech-heavy Nasdaq Composite (+0.6%) finished slightly higher and the DJIA (+0.2%) captured a more modest gain. However, the winning streak would not continue for the smaller-cap Russell 2000 (-0.6%) and S&P Mid Cap 400 (-0.3%), which finished lower after outperforming yesterday. 

The information technology sector (+1.0%) mounted a solid intraday climb from negative territory this morning, which helped the major averages move higher after largely trading flat. 

NVIDIA (NVDA 189.22, +5.53, +3.01%) and Broadcom (AVGO 349.32, +7.87, +2.30%) led the advance, though a majority of mega-cap tech names traded modestly higher. In sector-related news, the Office of the United States Trade Representative said tariffs on Chinese semiconductors will be implemented, though the rate will remain at 0% for the next 18 months.

Alphabet (GOOG 315.64, +4.31, +1.38%) was another mega-cap standout, helping the communication services sector (+1.0%) tie for the widest gain of the day. 

Of the seven S&P 500 sectors that finished higher, the energy sector (+0.6%) was the only other one to capture a gain wider than 0.3%. Crude oil futures settled today's session $0.37 higher (+0.6%) at $58.40 per barrel. 

Losses were just as modest, with the defensive consumer staples (-0.4%) and health care (-0.2%) sectors retreating the furthest while the industrials sector (-0.1%) finished just slightly lower. The real estate sector finished flat. 

Breadth steadily improved throughout the session. Decliners outpaced advancers by a roughly 2-to-1 clip on both exchanges this morning, though decliners would finish with a roughly 4-to-3 advantage on the NYSE and a roughly 7-to-4 edge on the Nasdaq. 

Still, weakness in the broader market saw the S&P 500 Equal Weighted Index (-0.3%) finish decidedly lower and underperform the market-weighted S&P 500 (+0.5%), which was a beneficiary of the Vanguard Mega Cap Growth ETF's solid 0.7% gain. 

Today's data slate saw the advance reading of Q3 GDP (4.3%; Briefing.com consensus 3.0%) come in well ahead of expectations. The indication of strong growth at a time when the Fed has been cutting rates invited some concerns about inflation turning out to be more persistent than previously thought, which in turn saw a modest decrease in the markets' expectations for further rate cuts in the near term. 

However, the data also painted a positive picture of the economy, which helped growth stocks outperform amid the low-volume session, sending the major averages higher for the second consecutive day this week. 

U.S. Treasuries had a mixed showing on Tuesday, as the 5-year note and shorter tenors reversed from their early highs to record modest losses while the long bond finished in the green, continuing yesterday's show of relative strength. The U.S. Treasury followed yesterday's weak 2-year note sale with a 5-year note offering that was also a bit disappointing, but record direct takedown prevented an uglier outcome.

The 2-year note yield settled up two basis points to 3.53%, and the 10-year note yield finished unchanged at 4.17%. 

The market will close at 1:00 p.m. ET tomorrow for the Christmas Eve holiday.

• Nasdaq Composite: +22.0% YTD
• S&P 500: +17.5% YTD
• Russell 2000: +13.9% YTD
• DJIA: +13.9% YTD
• S&P Mid Cap 400: +7.9% YTD

Reviewing today's data:

• Q3 GDP-Adv. 4.3% (Briefing.com consensus 3.0%); Prior 3.8%, Q3 GDP Deflator-Adv. 3.8% (Briefing.com consensus 2.7%); Prior 2.1%
  • The key takeaway from the report is that the U.S. economy was certainly running on the warm side in Q3. That will stir some concerns about the Fed's recent decision to cut rates in December and the risk of stoking increased inflation in pursuit of keeping the economy on a growth trajectory.
• October Durable Orders -2.2% (Briefing.com consensus 0.3%); Prior was revised to 0.7% from 0.5%, October Durable Goods - ex transportation 0.2% (Briefing.com consensus -1.1%); Prior was revised to 0.7% from 0.6%
  • The key takeaway from the report is that it was a better indicator of growth than meets the headline eye, evidenced by the 0.7% month-over-month increase in shipments and 0.5% month-over-month increase in new orders for nondefense capital goods excluding aircraft.
• November Industrial Production 0.2% (Briefing.com consensus 0.1%); Prior -0.1%, November Capacity Utilization 76.0% vs (Briefing.com consensus 77.4%); Prior 75.9%
  • The key takeaway from the report is that the uptick in November was driven entirely by mining output, which offset the absence of growth in manufacturing output and a 0.4% decline in utilities output.
• December Consumer Confidence 89.1 vs (Briefing.com consensus 89.0); Prior was revised to 92.9 from 88.7
  • The key takeaway from the report is that confidence sagged in December due largely to worries about labor market conditions.