Stock Market Update

[BRIEFING.COM] The stock market faced some early pressure following a trove of earnings data before the open that culminated in early losses in the information technology sector (-1.1%), though relatively broad-based performance elsewhere has mitigated some of the early losses. 

The pre-open action featured relative strength in the mega-cap stocks and some points of attrition for the broader market, with price setbacks for Coca-Cola (KO 69.46, -0.62, -0.9%), General Motors (GM 49.47, -3.74, -7.0%), Lockheed Martin (LMT 423.98, -36.55, -7.9%), Danaher (DHR 187.21, -0.86, -0.5%), Sherwin-Williams (SHW 333.00, -8.30, -2.4%), and Philip Morris International (PM 168.32, -12.16, -6.7%) following their earnings reports.

Chipmakers retreated this morning as NXP Semi (NXPI 226.66, -1.61, -0.7%) beat EPS expectations but failed to deliver upside guidance for the broader industry, with the PHLX Semiconductor Index down 1.9% as a result.

The losses have permeated through the mega-cap cohort, resulting in a 0.8% retreat in the Vanguard Mega Cap Growth ETF.

The broader market is performing well, however, with nine sectors trading within positive territory and smaller-cap stocks standing out. The S&P 500 holds a modest loss of 0.2%, while the Russell 2000 sports a gain of 0.4%, and the S&P Mid Cap 400 is up an even higher 0.8%.

Lower Treasury yields have helped support the rotation within the stock market, which has featured the outperformance of value stocks over growth stocks. The 2-yr note yield is down two basis points to 3.83%, and the 10-yr note yield is down four basis points to 4.33%.

Better-than-expected earnings results from homebuilders D.R. Horton (DHI 150.45, +19.23, +14.65%) and PulteGroup (PHM 119.40, +10.75, +9.89%), which were achieved with mortgage rates at elevated levels, have contributed to the outperformance of the value factor. The added boost in the homebuilding stocks has a lot to do with the thought of how much better the results can be if and when mortgage rates come down.

The iShares US Home Construction ETF is up 6.2% today as a result. 

Breadth figures denote the broader buying interest. Advancers lead decliners by a better than 2-to-1 margin at the NYSE and by a roughly 3-to-2 margin at the Nasdaq.