Stock Market Update

[BRIEFING.COM] Today's session started out similar to yesterday's session. That is, the major indices traded in lackluster fashion around their prior closing levels. The session also ended similar to yesterday's session, with the S&P 500 at a new record high.

The limited action in the early going was rooted in profit-taking activity, but stocks showed nice resilience to selling interest, which became its own upside catalyst by the close.

Strength in the mega cap and semiconductor spaces played an integral role in index gains. The PHLX Semiconductor Index (SOX) jumped 1.2%, and Microsoft (MSFT 414.77, +5.13, +1.3%), Apple (AAPL 244.87, +0.40, +0.2%), Alphabet (GOOG 187.13, +1.33, +0.7%), and Tesla (TSLA 360.56, +6.45, +1.8%) registered gains.

Outsized moves in either direction were mostly limited to companies that reported quarterly results. Occidental Petroleum (OXY 50.99, +2.15, +4.4%) and Devon Energy (DVN 37.57, +2.69, +7.7%) were standouts in that regard, boosting the energy sector (+0.7%). 

On the flip side, Celanese (CE 54.91, -15.00, -21.5%) and Toll Brothers (TOL 114.88, -7.17, -5.9%) logged big losses in response to disappointing results.

Market participants were digesting more talk about tariffs, but took it in stride due to a view that tariffs are more of a bargaining chip than a permanent feature. President Trump said the auto tariff rate will be in the neighborhood of 25% starting April 2, and that he is also considering tariffs for pharmaceuticals and semiconductors.

The market also received the Minutes from the January 28-29 FOMC meeting, which didn't contain any surprises. 

The 10-yr yield settled one basis point lower at 4.54% and the 2-yr yield settled three basis points lower at 4.27%. 

• Dow Jones Industrial Average: +4.9% YTD
• S&P 500: +4.5% YTD
• Nasdaq Composite: +3.9%
• S&P Midcap 400: +2.8% YTD
• Russell 2000: +2.4% YTD

Reviewing today's economic data:

• January housing starts declined 9.8% month-over-month to a seasonally adjusted annual rate of 1.366 million (Briefing.com consensus 1.400 million) from an upwardly revised 1.515 million (from 1.499 million) in December. Building permits rose 0.1% to a seasonally adjusted annual rate of 1.483 million (Briefing.com consensus 1.450 million) from a downwardly revised 1.482 million (from 1.483 million) in December.
  • The key takeaway from the report is that there was no growth in starts or permits for single-family housing units, which will contribute to ongoing affordability constraints in the existing home market, which is short on inventory. Single-unit starts were down 8.4% month-over-month while single-unit permits were flat.
• The weekly MBA Mortgage Index was down 6.6% after increasing 2.3% a week ago. The Purchase Index was down 5.9% while the Refinance Index fell 7.3%.

Looking ahead to Thursday, market participants receive the following data:

• 8:30 ET: February Philadelphia Fed Survey (Briefing.com consensus 20.5; prior 44.3), weekly Initial Claims (Briefing.com consensus 217,000; prior 213,000), and Continuing Claims (prior 1.850 mln)
• 10:30 ET: Weekly natural gas inventories (prior -100 bcf)
• 11:00 ET: Weekly natural gas inventories (prior +4.07 mln)