Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.5%), Nasdaq Composite (+0.7%), and DJIA (+0.5%) have recovered from early declines and are now trading with modest gains as the market continues to navigate a steady stream of geopolitical and energy-related headlines.

Oil prices fell sharply yesterday after President Trump suggested the conflict in Iran may be nearing its end and said he is considering the possibility of the U.S. “taking over” the Strait of Hormuz.

Although crude extended its pullback this morning, stocks initially struggled to build on the relief as investors remained skeptical about the likelihood of a swift resolution to the conflict. Reuters reported that Iran indicated the blockade would remain in place until U.S. and Israeli strikes stop.

The major averages made a decisive move higher roughly an hour into the session after reports that the International Energy Agency had called an emergency meeting with member nations to review supply conditions and discuss whether strategic reserves could be released to stabilize the market if necessary.

Oil moved sharply lower in response, with crude currently trading $10.65 (-11.2%) lower at $84.12 per barrel. 

The energy sector (-0.5%) sits at the bottom of today's sector leaderboard as a result, currently one of just two sectors that hold a week-to-date loss. 

The health care sector (-0.1%) joins the energy sector in negative territory today but remains modestly higher for the week. Centene (CNC 38.74, -4.58, -10.57%) is one of the worst-performing S&P 500 names after the company's CEO said at a conference that Affordable Care Act membership declines could be worse than previously projected.

Meanwhile, the other nine S&P 500 sectors trade modestly higher, with most sectors flipping into positive territory shortly after the IEA energy headlines. 

The consumer discretionary sector (+0.7%) currently holds the widest gain, supported by relatively broad strength and decent gains in Tesla (TSLA 403.49, +4.81, +1.21%) and Amazon (AMZN 215.17, +1.68, +0.79%). 

Meanwhile, travel-related names such as Expedia Group (EXPE 233.04, -8.50, -3.52%) and cruise lines continue to struggle despite the move lower in oil prices. 

The information technology sector (+0.7%) holds an identical gain, supported by another strong session from its chipmaker components that push the PHLX Semiconductor Index 2.1% higher. Memory storage names such as Western Digital (WDC 278.66, +16.60, +6.33%) and Micron (MU 412.35, +23.03, +5.92%) are once again among the top movers for the second consecutive session. 

Ciena (CIEN 344.72, +26.18, +8.22%) holds the widest gain in the sector after AT&T (T 27.88, +0.34, +1.25%) announced a $250+ billion commitment over five years to expand its fiber, 5G wireless, and satellite networks across the U.S.

Elsewhere in the sector, software names are facing renewed pressure after a solid rebound last week and a modest gain yesterday. The iShares GS Software ETF is down 1.8%.

Outside of the S&P 500, the Russell 2000 (+0.9%) and S&P Mid Cap 400 (+0.5%) followed a similar path to that of the major averages this morning. 

The market now trades in a relatively stable range following this morning’s developments on the energy front, with investors awaiting further updates on whether the IEA will take action to release emergency reserves.

Reviewing today's data:

• February NFIB Small Business Optimism 98.8 (Briefing.com consensus 99.5); Prior 99.3
• February Existing Home Sales 4.09 mln (Briefing.com consensus 3.88 mln); Prior was revised to 4.02 mln from 3.91 mln
  
  • The key takeaway from the report is that sales increased despite continued pressure on affordability as median prices grew for the 32nd month in a row.