Stock Market Update

[BRIEFING.COM] The major averages are down at midday leading up to a three-day Memorial Day weekend with the S&P 500 (-0.7%) extending this week's loss to 2.6% while the Nasdaq (-0.9%) is now down 2.4% for the week.

The market was on track for a flat start to the Friday session, but President Trump's warning to the EU exerted immediate pressure on risk sentiment after the president said that a 50% tariff will be placed on imports from the bloc on June 1 due to a lack of progress in negotiations.

President Trump also singled out tech heavyweight Apple (AAPL 196.27, -5.09, -2.5%), saying that the company should pay a 25% tariff if it does not reorient its production to the U.S. Apple has narrowed some of its initial loss, but the top-weighted technology sector (-1.2%) remains at the bottom of today's leaderboard.

The overall weakness in technology is masking some relative strength among software stocks after Autodesk (ADSK 292.77, -2.23, -0.8%) and Intuit (INTU 718.64, +52.57, +7.9%) reported solid results. Autodesk, however, has not been able to sustain its early gain.

Besides technology, sectors like consumer discretionary (-0.9%) and communication services (-0.7%) are among today's laggards while utilities (+0.6%) outperform after struggling yesterday.

Treasuries trade in the green with the 10-yr yield down four basis points at 4.52%, but still up eight basis points for the week, while the 2-yr yield is down one basis point at 3.99% today and up one basis point for the week.

Today's economic data was limited to April new home sales, which surged 10.9% month-over-month to a seasonally adjusted annual rate of 743,000 units (Briefing.com consensus 679,000) from a downwardly revised 670,000 (from 724,000) in March. On a year-over-year basis, new home sales were up 3.3%.

The key takeaway from the report is that new home sales in April were bolstered by a decline in the median sales price; however, the excitement surrounding the headline beat was muted by the sharp downward revision to new home sales for March. Taking that revision into account, there wasn't a great deal of change in the March-April period compared to what economists knew and expected going into the April report.