Stock Market Update

[BRIEFING.COM] The stock market opened to fresh record highs for the S&P 500 and Nasdaq Composite, but a wave of sell-the-news action in stocks that reported earnings before the open has the major averages posting modest losses at this juncture. 

Shares of Netflix (NFLX 1209.43, -64.74, -5.1%), 3M (MMM 151.66, -7.38, -4.6%), and American Express (AXP 305.75, -9.60, -3.0%) are all trading lower after beating EPS expectations and providing generally reassuring guidance.

The selling activity has been modest but relatively broad-based, with only four sectors trading in the green, and of those, only the consumer discretionary sector (+0.6%) and the lightly weighted utilities sector (+1.7%) sport gains greater than 0.5%.

Breadth figures have worsened throughout the session, with decliners now outpacing advancers by a 3-to-2 ratio on the NYSE and a nearly 11-to-8 ratio on the Nasdaq.

Today's economic data did little to influence the markets, as a slightly improved housing starts and building permits report was marred by a lack of strength in single-unit starts and permits.

The iShares US Home Construction ETF (ITB 94.67, -1.02, -1.1%) is down today as a result.

Treasuries are up today amid the sluggishness in the stock market, gaining additional support from Fed Governor Waller (voting FOMC member) advocating for a rate cut at the next meeting, though the actual possibility of this happening remains low.

The 10-year note yield is down 3 basis points at 4.42%. 

Reviewing today's data:

• June Housing Starts 1.321 mln (Briefing.com consensus 1.300 mln); Prior was revised to 1.263 mln from 1.256 mln, June Building Permits 1.397 mln (Briefing.com consensus 1.383 mln); Prior was revised to 1.394 mln from 1.393 mln
  • The key takeaway from the report is that there wasn't any strength in single-unit starts and permits, which is where the strength needs to be to help curtail the affordability constraints in an existing home market that is still relatively light on available inventory for sale.
• July Univ. of Michigan Consumer Sentiment - Prelim 61.8 (Briefing.com consensus 61.5); Prior 60.7
  • The key takeaway from the report is that consumer sentiment, while not strong, has improved in recent months along with inflation expectations.