Stock Market Update

[BRIEFING.COM] The stock market has exhibited mixed action thus far. The major indices traded higher initially, but the opening move stalled when the S&P 500 was just below its all-time high (6,128). The S&P 500 and Nasdaq Composite briefly dipped below their prior closing levels in recent trading.

The mixed disposition follows this morning's economic data, which reflected ongoing inflation pressure and ignited concerns about growth. The retail sales report for January was noticeably weak and the industrial production report for January showed growth without any help from manufacturing or mining output (i.e., cold weather drove a spike in the output of utilities, which was cranking to meet demand for heat).

Treasury yields are lower in response. The 10-yr note yield is down six basis points to 4.47% and the 2-yr yield is down six basis points to 4.25%.

Mixed action in the mega cap space is another factor leading the major indices to trade in mixed fashion. NVIDIA (NVDA 137.48, +2.19, +1.6%) and Apple (AAPL 244.03, +2.50, +1.0%) are up nicely while Microsoft (MSFT 407.92, -2.62, -0.6%) and Amazon.com (AMZN 229.18, -1.18, -0.5%) trade lower.

There's still a positive bias under the index surface, but margins have narrowed compared to earlier in the session as buyer enthusiasm dissipated. After the open, advancers led decliners by a 3-to-1 margin at the NYSE and a 2-to-1 margin at the Nasdaq. Now, advancers have a 3-to-2 lead over decliners at the NYSE and an 11-to-10 lead at the Nasdaq.

Reviewing overnight developments:

• January Retail Sales -0.9% (Briefing.com consensus 0.0%); Prior was revised to 0.7% from 0.4%, January Retail Sales ex-auto -0.4% (Briefing.com consensus 0.3%); Prior was revised to 0.7% from 0.4%
  • The key takeaway from the report is that there was a notable pullback in spending on goods, something that can be attributed in part to abnormal weather. The full picture, however, points to a tired consumer after the holidays, raising the question as to whether that fatigue will persist because of inflation pressures or prove to be short-lived.
• January Export Prices 1.3%; Prior was revised to 0.5% from 0.3%
• January Export Prices ex-ag. 1.5%; Prior was revised to 0.4% from 0.3%
• January Import Prices 0.3%; Prior was revised to 0.2% from 0.1%
• January Import Prices ex-oil 0.1%; Prior 0.1%
• January Industrial Production 0.5% (Briefing.com consensus 0.3%); Prior was revised to 1.0% from 0.9%, January Capacity Utilization 77.8% (Briefing.com consensus 77.7%); Prior was revised to 77.5% from 77.6%
  • The key takeaway from the report is that the jump industrial production in January was rooted entirely in the volatile component of utilities output, which surged as cold temperatures boosted the demand for heating.
• December Business Inventories -0.2% (Briefing.com consensus 0.1%); Prior 0.1%