Stock Market Update

[BRIEFING.COM] Stocks have taken a step back from yesterday's advance as the market lacks both the mega-cap leadership and broad strength of the previous session. The S&P 500 (-0.6%), Nasdaq Composite (-0.6%), and DJIA (-0.8%) are lower across the board today, though they remain mostly higher for the week. 

Seven S&P 500 sectors are lower, and while stocks are nearing session lows, the losses remain relatively modest in nature. 

The top-weighted information technology sector (-0.9%) is among the retreating sectors as a majority of its components trade lower. Software stocks are just modestly lower, but the PHLX Semiconductor Index is down 1.1% with particular weakness across memory storage names such as Seagate Tech (STX 405.67, -18.47, -4.35%) and Western Digital (WDC 284.28, -12.28, -4.14%). 

NVIDIA (NVDA 186.41, -1.57, -0.84%) is a "magnificent seven" laggard, though its losses are modest in comparison to its advance yesterday. 

The consumer discretionary sector (-0.9%) was another top mover yesterday, but moves modestly lower amid mixed reactions to a sizable slate of earnings reports. eBay (EBAY 86.58, +4.40, +5.35%) and DoorDash (DASH 179.55, +6.17, +3.56%) move higher, while Carvana (CVNA 319.10, -42.43, -11.74%), Pool (POOL 227.73, -27.60, -10.81%), and Booking Holdings (BKNG 3897.99, -372.00, -8.71%) face sharp retreats. 

Performance is mixed across other cyclical sectors today. 

The energy sector (+0.6%) remains higher but has steadily seen its early gains eroded throughout the session. Occidental Petro (OXY 51.10, +3.99, +8.47%) is up nicely following earnings, while the price of oil climbs $1.46 (+2.2%) to $66.51 per barrel as the likelihood of a conflict between the U.S. and Iran remains imminent. 

Some gains are also seen across aerospace and defense names such as Lockheed Martin (LMT 663.76, +13.95, +2.15%) and Huntington Ingalls (HII 433.31, +8.42, +1.98%), adding support to the industrials (+0.4%) sector. Deere (DE 669.86, +76.59, +12.91%) is the sector's top performer after topping earnings estimates. 

Meanwhile, the financials sector (-1.4%) is the worst-performing S&P 500 sector, with particular weakness across asset managers such as Apollo Global Management (APO 117.14, -8.22, -6.56%) and Blackstone (BX 125.52, -7.38, -5.55%). Financial Times reported that Blue Owl Capital (OWL 11.12, -1.20, -9.71%) has halted redemptions in its private retail debt fund, which could signal some stress within the group, though the company has since refuted the report. 

The utilities sector (+1.0%) is now the top performer amid the risk-off positioning today. However, the health care sector (-0.7%) faces broad weakness, and the consumer staples sector (-0.3%) is also lower. Walmart (WMT 126.67, +0.05, +0.04%) has faced some choppy price action in response to its earnings release, moving lower in the premarket before trading as much as 2.5% higher this morning. The company reported a narrow earnings beat but issued disappointing guidance. 

Outside of the S&P 500, the Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.5%) are modestly lower, reflecting a more cautious approach after yesterday's rally. 

Overall, today's pullback appears orderly, with leadership narrowing and some profit-taking emerging after yesterday's strong advance, though the midday pressure has now seen the bulk of yesterday's strength erased. 

Reviewing today's data:

• Weekly Initial Claims 206K (Briefing.com consensus 225K); Prior was revised to 229K from 227K, Weekly Continuing Claims 1.869 mln; Prior was revised to 1.852 mln from 1.862 mln
  • The key takeaway from the report is its confirmatory signal that the labor market is still operating in a low-firing environment.
• February Philadelphia Fed Index 16.3 (Briefing.com consensus 8.5); Prior 12.6
• December Trade Balance -$70.3 bln (Briefing.com consensus -$55.8 bln); Prior was revised to -$53.0 bln from -$56.8 bln
  • The key takeaway from the report is that the wider deficit will detract from Q4 GDP growth estimates.
• January Pending Home Sales -0.8% (Briefing.com consensus 1.4%); Prior was revised to -7.4% from -9.3%
• December Adv. Intl. Trade in Goods $98.5 bln; Prior $82.8 bln
• December Adv. Retail Inventories 0.0%; Prior -0.5%
• December Adv. Wholesale Inventories 0.2%; Prior 0.2%
• December Lending Economic Index -0.2%; Prior -0.3%