Stock Market Update

[BRIEFING.COM] Today's trade features a positive bias, but the major indices haven't reflected that through the entire session. The S&P 500 (+0.2%), Nasdaq Composite (-0.03%), and Dow Jones Industrial Average (+0.3%) started the day below their prior closing levels, weighed down by losses in some heavily-weighted components. 

Alphabet (GOOG 192.47, -15.29, -7.4%) is chief among them, dropping sharply after failing to meet high expectations and issuing a stunning $75 billion capex plan for 2025. This decline has occurred from an elevated level after shares closed at an all-time high above $204 five days ago on January 31. 

Apple (AAPL 230.21, -2.59, -1.1%) is another influential decliner after a Bloomberg report that China is considering a probe into its App Store fees and policies.

Fellow Dow component Walt Disney (DIS 111.59, -1.72, -1.5%) is also under selling pressure today after reporting a decline in Disney+ subscribers. 

Many other names are moving higher today. Market breadth favors advancers by a roughly 2-to-1 margin at both the NYSE and at the Nasdaq. Buying interest also led the equal-weighted S&P 500 to trade 0.3% higher and eight of the 11 S&P 500 sectors to trade up. 

The rate-sensitive real estate (+1.3%) and utilities (+1.2%) sectors have led the pack amid falling market rates, followed by information technology (+1.2%), which has benefitted from an outsized gain in NVIDIA (NVDA 123.88, +5.23, +4.4%).

The 2-yr note yield is down five basis points to 4.17% and the 10-yr note yield is down ten basis points to 4.41%, running in response to weaker-than-expected Services PMI readings for January out of China, Europe, and the U.S. that have fostered some growth concerns.

Reviewing today's economic data:

• The December Trade Balance Report showed a widening in the deficit to $98.4 billion (Briefing.com consensus -$98.0 billion) from a downwardly revised $78.9 billion (from -$78.2 billion) in November. December exports were $7.1 billion less than November exports while December imports were $12.4 billion more than November imports.
  • The key takeaway from the report is that the big jump in imports was presumably a function of trying to get ahead of possible tariff actions.
• January S&P Global US Services PMI - Final 52.9 vs. 52.8 prior
• The ISM Services PMI decreased to 52.8% in January (Briefing.com consensus 53.9%) from a downwardly revised 54.0% (from 54.1%) in December. The dividing line between expansion and contraction is 50.0%, so the January reading reflects services sector activity expanding but at a slower pace than the prior month. January marked the 53rd time in 56 months that the Services PMI indicated expansion.
  • The key takeaway from the report is that the pace of expansion in the nation's largest sector decelerated in January. That will likely temper growth forecasts for the first quarter.