Stock Market Update

[BRIEFING.COM] The stock market traded in mixed fashion through most of the session. The major indices traded above and below their prior closing levels due to a lack of conviction from either buyers or sellers. The S&P 500 and Nasdaq Composite ultimately closed near their highs, though, thanks to a late surge of buying in some mega cap names.  

There was no specific new item to account for the afternoon climb that was driven by an ongoing inclination to buy on weakness, along with some short-covering activity. Apple (AAPL 233.22, +0.75, +0.3%) was among the influential beneficiaries of the increased buying after trading down as much as 0.9%.

Market breadth was still negative at the close, however. Decliners led advancers by a fractional margin at the NYSE and by an 11-to-10 margin at the Nasdaq. 

Outsized moves were mostly reserved for stocks that reported earnings. Qualcomm (QCOM 169.32, -6.54, -3.7%) was a standout in that regard, sparking selling interest in other semiconductor-related. Ford Motor (F 9.26, -0.75, -7.5%) and Skyworks Solutions (SWKS 65.60, -21.48, -24.7%) were also noticeable laggards, logging fresh 52-week lows in response to earnings.

Tapestry (TPR 82.20, +8.82, +12.0%), Ralph Lauren (RL 273.14, +24.14, +9.7%), and Phillip Morris (PM 145.32, +14.34, +11.0%), which each hit a 52-week high, were standouts on the winning side, along with Hershey (HSY 152.34, +6.42, +4.4%).

Separately, The 10-yr settled two basis points higher at 4.44% and the 2-yr yield settled three basis points higher at 4.21%.

• Dow Jones Industrial Average: +5.2% YTD
• S&P Midcap 400: +4.1% YTD
• Russell 2000: +3.5% YTD
• S&P 500: +3.4% YTD
• Nasdaq Composite: +2.5% YTD

Reviewing today's economic data:

• Q4 Productivity-Prel 1.2% (Briefing.com consensus 0.8%); Prior was revised to 2.3% from 2.2%, Q4 Unit Labor Costs-Prel 3.0% (Briefing.com consensus 2.6%); Prior was revised to 0.5% from 0.8%
  • The key takeaway from the report is that the productivity is on the rise, which will help temper inflation pressures. The 1.8% annualized rate of productivity growth in the current business cycle (starting Q4 2019) is higher than the 1.5% rate of the previous business cycle (Q4 2007 through Q4 2019).
• Weekly Initial Claims 219K (Briefing.com consensus 213K); Prior was revised to 208K from 207K, Weekly Continuing Claims 1.886 mln; Prior was revised to 1.850 mln from 1.858 mln
  • The key takeaway from the report is that there simply hasn't been a material increase in initial jobless claims, which would suggest there is some real weakening in the labor market. Hiring activity might have slowed, but the layoff activity does not impart an indication that employers think the economy is on the brink of a meaningful slowdown.

Looking ahead to Friday, market participants receive the following economic data:

• 8:30 ET: January Nonfarm Payrolls (Briefing.com consensus 155,000; prior 256,000), Nonfarm Private Payrolls (Briefing.com consensus 163,000; prior 223,000), Average Hourly Earnings (Briefing.com consensus 0.3%; prior 0.3%), Unemployment Rate (Briefing.com consensus 4.1%; prior 4.1%), and Average Workweek (Briefing.com consensus 34.3; prior 34.3)
• 10:00 ET: Preliminary February University of Michigan Consumer Sentiment (Briefing.com consensus 71.3; prior 71.1) and December Wholesale Inventories (Briefing.com consensus -0.5%; prior -0.2%)
• 15:00 ET: December Consumer Credit (Briefing.com consensus $13.4 bln; prior -$7.5 bln)