Stock Market Update

[BRIEFING.COM] The stock market trades mostly lower on the final session of the week. The major indices are in a steady decline, driven by consolidation efforts after the recent run that led the S&P 500 to a fresh record high. 

The S&P 500 trades 1.1% lower, the Nasdaq Composite shows a 1.4% decline, and the Dow Jones Industrial Average trades 1.3% below its prior close.

Fallout in shares of UnitedHealth (UNH 463.50, -38.92, -7.8%) following a Wall Street Journal report that the DOJ has launched a civil fraud investigation into UNH's Medicare Advantage billing practices has contributed to the loss in the DJIA. UNH is the second heaviest component in the price-weighted average. 

UNH's loss is not the only factor weighing down the Dow. 23 of the 30 components are lower in today's broad retreat. Market breadth also reflects broad selling interest. Decliners lead advancers by a roughly 2-to-1 margin at both the NYSE and at the Nasdaq.

The overall downside vibe is related in part to concerns about growth after today's economic data. The preliminary February S&P Global US Services PMI fell to contraction territory (i.e. below 50), the final University of Michigan Consumer Sentiment report for February dropped to 64.7, and existing home sales declined 4.9% month-over-month in January.

Treasuries saw increased buying in response to the data, another indication of growth concerns. The 10-yr yield dropped to 4.43% from 4.49%.

Reviewing today's economic data:

• February S&P Global US Manufacturing PMI - Prelim 51.6; Prior 51.2
• February S&P Global US Services PMI - Prelim 49.7; Prior 52.9
• January Existing Home Sales 4.08 mln (Briefing.com consensus 4.06 mln); Prior was revised to 4.29 mln from 4.24 mln
  • The key takeaway from the report is that existing home sales are being suppressed by affordability constraints that are rooted in elevated home prices, which are tied to limited inventory, and elevated mortgage rates.
• February Univ. of Michigan Consumer Sentiment - Final 64.7 (Briefing.com consensus 67.8); Prior 67.8
  • The key takeaway from the report is that the weakening in sentiment cut across groups by age, income, and wealth, and was attributed largely to worries about imminent price increases driven by tariff actions.