Stock Market Update

[BRIEFING.COM] The S&P 500 and Nasdaq Composite posted record closing highs yesterday. Today they advanced to new highs, but they were unable to retain that posture and closed the session with losses. The selling interest wasn't acute at the index level. That was reserved mostly for individual stocks, but to be fair, so were big gains.

Some geopolitical headlines got the market stirred up at times today, but otherwise it was a day of modest attrition for the indices after a big run.

The opening was dictated by a mixed reaction to earnings reports since yesterday's close. The S&P 500 information technology sector (-1.5%) was the main point of attraction in that regard. Texas Instruments (TXN 282.23, +45.92, +19.43%) led the semiconductor group to another win, whereas ServiceNow (NOW 84.94, -18.13, -17.59%) was knocked out of service after its earnings report, triggering a renewed fallout in the software stocks, which were also contending with a resumption of private-credit worries.

For the day, the Philadelphia Semiconductor Index was up 1.7%, and the iShares GS Software ETF (IGV 83.60, -5.14, -5.79%) was down nearly 6.0%.

Tesla (TSLA 373.60, -13.91, -3.59%) was another laggard of note, failing to benefit from its better-than-expected Q1 earnings result as investors focused instead on Elon Musk's vague declaration that a very significant increase in capex is expected. The consumer discretionary sector (-0.9%) felt the weight of losses in Tesla and most components, including lululemon athletica (LULU 141.66, -21.79, -13.33%), which named former Nike executive Heidi O'Neill as its new CEO. The stock's reaction made it clear that investors weren't impressed.

Elsewhere, the S&P 500 utilities (+2.8%), industrials (+1.8%), consumer staples (+1.7%), and real estate (+1.3%) sectors delivered some impressive percentage gains in a down market, boosted by healthy gains in the likes of NextEra Energy (NEE 96.25, +6.25, +6.94%), Dover (DOV 228.15, +11.98, +5.54%), Keurig Dr Pepper (KDP 28.53, +1.99, +7.50%), and Crown Castle (CCI 87.52, +1.51, +1.76%) following their earnings results.

The market hit an air pocket in the afternoon session amid reports that Iran's speaker had resigned and that Iran's air defenses were engaging hostile targets. Long story short, both reports were debunked, enabling the indices to recover most of what was lost in the knee-jerk selling that occurred after the initial reports.

A full recovery, though, was impeded by the underperformance of the mega-cap cohort and reservations about what could transpire overnight in the geopolitical arena.

WTI crude futures settled the session up 3.0% at $95.76/bbl. The 10-yr note yield was up three basis points to 4.32%.

• Russell 2000: +11.8% YTD
• S&P Mid Cap 400: +9.9% YTD
• Nasdaq Composite: +5.1% YTD
• S&P 500: +3.8% YTD
• DJIA: +2.6% YTD

Reviewing today's economic data:

• Initial jobless claims for the week ending April 18 increased by 6,000 to 214,000 (Briefing.com consensus: 212,000). Continuing jobless claims for the week ending April 11 increased by 12,000 to 1.821 million.
  • The key takeaway from the report is that there is nothing in the level of initial jobless claims—a leading indicator—that suggests the labor market is in a dire state.
• The preliminary April S&P Global U.S. Manufacturing PMI checked in at 54.0 vs. 52.3 prior.
• The preliminary April S&P Global U.S. Services PMI checked in at 51.3 vs. 49.8 prior.