Stock Market Update

[BRIEFING.COM] The stock market has had an eventful first half of the midweek session, with strong broad-based gains now significantly narrowed following a midday retreat. 

Equity futures moved sharply higher this morning after President Trump said in his address to the World Economic Forum that the U.S. would not use force to acquire Greenland. The S&P 500 (+0.2%), Nasdaq Composite (flat), and DJIA (+0.4%) all traded higher by around 1.0% as stocks advanced in broad fashion. 

While Trump's confirmation that the U.S. would not use force to acquire Greenland sent stocks higher, he maintained that it is still of utmost importance for the island to come under U.S. control. In response, the EU announced this morning a suspension of the Turnberry Deal, which would have suspended tariffs on all US industrial goods and established a tariff-rate quota system for a large number of US agri-food products entering the EU. 

Even still, stocks charted session highs until just before midday. 

Mega-cap stocks were among the first to show signs of weakness, with the Vanguard Mega Cap Growth ETF now down 0.3% after trading over 0.5% higher this morning. 

The top-weighted information technology sector (-0.3%) also moved into negative territory after sporting a gain wider than 1.0% for much of the session. Microsoft (MSFT 439.55, -14.97, -3.29%) is a Magnificent Seven laggard, while Oracle (ORCL 171.55, -8.37, -4.65%) and Palantir Technologies (PLTR 161.31, -7.22, -4.29%) slide even further. 

The PHLX Semiconductor Index (+1.5%) has shed nearly 2 percentage points as well, though it still holds a solid gain thanks to Intel (INTC 52.82, +4.26, +8.78%) and memory storage names such as Sandisk (SNDK 477.17, +24.05, +5.31%) and Micron (MU 384.03, +19.03, +5.21%). 

Today's intraday retreat also leaves the consumer discretionary (+0.1%) and financials (+0.2%) with just a fraction of their earlier gains. 

Meanwhile, the energy sector (+2.3%) has remained impervious to the broader market move, trading higher despite a flat price of oil as natural gas futures surge amid the polar vortex.  Halliburton (HAL 33.60, +1.54, +4.80%) is a notable mover after topping earnings estimates this morning. 

Elsewhere, defensive sectors are posting mixed performances so far. The health care sector (+1.2%) has steadily climbed throughout the session following an announcement from Moderna (MRNA 47.61, +4.61, +10.72%) and Merck (MRK 111.22, +1.76, +1.61%) that their melanoma vaccine has shown solid results after 5 years of data. 

The consumer staples (-0.4%) and utilities (-0.4%) sectors trade lower. 

Outside of the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.9%) have also seen their gains significantly narrowed after trading up as much as 1.5% this morning. 

Overall, the midday pullback reflects a cooling of early enthusiasm as investors reassess lingering trade and geopolitical risks. The major averages have temporarily stabilized, though the retreat has notably sent the S&P 500 back below its 50-day moving average (6,832) after reclaiming it this morning. 

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 14.1%; Prior 28.5%
• September Construction Spending -0.6% (Briefing.com consensus 0.0%); Prior was revised to 0.4% from 0.2%
• December Pending Home Sales -9.3% (Briefing.com consensus 0.7%); Prior 3.3%
• October Construction Spending 0.5% (Briefing.com consensus 0.2%); Prior -0.6%
  • The key takeaway from the report is that the rebound in October was driven by residential spending and specifically private residential improvements.