Stock Market Update

[BRIEFING.COM] The stock market closed with gains after yesterday's slide. The major indices closed off session highs, though, as buyer enthusiasm dissipated and some mega caps turned lower. Apple (AAPL 223.29, -2.62, -1.2%) was a standout in that respect, closing lower in response to earnings. Amazon.com (AMZN 197.93, +11.53, +6.2%) provided some offsetting support after its earnings results. 

The upside bias stemmed from buy-the-dip interest and was in reaction to this morning's economic data, which supported the belief that the Fed will stay on a steady rate-cut path. The October jobs report was much weaker than expected, showing a huge miss relative to expectations even when accounting for the effects of the hurricanes and strikes.

Nonfarm payrolls increased by 12,000 and private nonfarm payrolls decreased by 28,000. Also, the ISM Manufacturing Index was weaker than expected in October.

Treasuries had a volatile response to the data, keeping buying efforts in check in the equity market. The 10-yr yield dropped as low as 4.23% in response to the data, but settled at 4.36%, which is eight basis points higher than yesterday.

The equal-weighted S&P 500 still eked out a 0.1% gain and five S&P 500 sectors closed higher. The consumer discretionary sector was a standout, jumping 2.4% thanks to the gain in AMZN. The information technology sector was the next best performer, settling 0.6% higher.

On the flip side, the rate-sensitive real estate (-1.1%) and utilities (-2.3%) sectors were the worst performers in response to rising rates.

• Nasdaq Composite: +21.5% YTD
• S&P 500: +20.1% YTD
• Dow Jones Industrial Average: +11.6% YTD
• S&P Midcap 400: +11.6% YTD
• Russell 2000: +9.0% YTD

Reviewing today's economic data:

• October Nonfarm Payrolls 12K (Briefing.com consensus 120K); Prior was revised to 223K from 254K, October Nonfarm Private Payrolls -28K (Briefing.com consensus 105K); Prior was revised to 192K from 223K, October Avg. Hourly Earnings 0.4% (Briefing.com consensus 0.3%); Prior was revised to 0.3% from 0.4%, October Unemployment Rate 4.1% (Briefing.com consensus 4.1%); Prior 4.1%, October Average Workweek 34.3 (Briefing.com consensus 34.2); Prior was revised to 34.3 from 34.2
  • The key takeaway from the report is that it has reinvigorated the market's view that the Fed will stay on a steady rate-cut path that will include cutting the target range for the fed funds rate by 25 basis points at next week's FOMC meeting and again at the December FOMC meeting.
• October S&P Global US Manufacturing PMI - Final 48.5; Prior 47.8
• October Construction Spending 0.1% (Briefing.com consensus 0.0%); Prior was revised to 0.1% from -0.1%
  • The key takeaway from the report is that private construction activity was subdued in September.
• October ISM Manufacturing Index 46.5% (Briefing.com consensus 47.6%); Prior 47.2%
  • The key takeaway from the report is that it has reinforced the understanding that conditions in the U.S. manufacturing sector remain weak.

Looking ahead to Monday, market participants will receive the September Factory Orders report at 10:00 ET.