Stock Market Update

[BRIEFING.COM] The stock market opened mostly higher. The S&P 500 (+0.3%), Nasdaq Composite (+0.5%), and Dow Jones Industrial Average (+0.3%) trade up while the Russell 2000, which has outperformed this week, trades flat.

Strength in semiconductor-related names after Taiwan Semiconductor Manufacturing Company (TSM 207.14, +19.62, +10.5%) reported pleasing Q3 results, along with better-than-expected Q4 guidance, has contributed to the positive bias. The PHLX Semiconductor Index (SOX) sports a 1.9% gain.

Market participants are also digesting a slate of economic news. Weekly jobless claims, September retail sales, and the October Philadelphia Fed Index were better than expected, stirred the notion that the Fed won't be as aggressive with rate cuts.

Total industrial production decreased 0.3% month-over-month in September (Briefing.com consensus -0.1%) following a downwardly revised 0.3% increase (from 0.8%) in August. The capacity utilization rate fell to 77.5% (Briefing.com consensus 77.9%) from a downwardly revised 77.8% (from 78.0%) in August. Total industrial production declined 0.6% yr/yr while the capacity utilization rate was 2.2 percentage points below its long-run average.

The key takeaway from the report is that industrial production in September was pressured by two extraordinary factors, which implies a rebound in growth should follow as those extraordinary factors find correction. The Boeing strike held back growth by an estimated 0.3% and the effects of Hurricanes Helene and Milton subtracted an estimated 0.3%.

Business inventories rose 0.3% in August (Briefing.com consensus 0.3%) following a 0.3% increase in July (revised from 0.4%). The NAHB Housing Market Index rose to 43 in October (Briefing.com consensus 43) from 41 in September.