Stock Market Update

[BRIEFING.COM] The stock market was trading up in the early going, benefitting from a solid gain in NVIDIA (NVDA 130.78, -4.80, -3.5%). Shares had been up as much as 3.8% earlier, propelling the S&P 500 past the 5,500 level for the first time. The Nasdaq Composite was up as much as 0.4%, but closed with a 0.8% decline.

The major indices hit session lows as NVDA shares turned negative for the day. Declines in some other heavily-weighted names also had an outsized impact on index performance. Apple (AAPL 209.68, -4.61, -2.2%), Broadcom (AVGO 1734.56, -67.96, -3.8%), and Microsoft (MSFT 445.70, -0.64, -0.1%) were standouts in that respect. 

Many stocks participated in the pullback, though, due to normal consolidation efforts after a solid run this month. Decliners led advancers by an 11-to-10 margin at the NYSE and by a 4-to-3 margin at the Nasdaq. 

Still, the Dow Jones Industrial Average settled 300 points higher despite the downside bias elsewhere. A nice gain in Salesforce (CRM 241.80, +9.99, +4.3%) contributed to the outperformance of the Dow. 

Some of the S&P 500 sectors also closed higher. The energy sector led the pack, jumping 1.9% amid rising oil prices ($81.34/bbl, +0.63, +0.8%). The utilities (+0.9%) and financials (+0.9%) sectors were the next best performers. 

The information technology sector was the worst performer, logging a 1.6% decline due to losses in its mega cap components. 

Rising market rates acted as another limiting factor today. The 2-yr note yield settled three basis points higher at 4.73% and the 10-yr note yield climbed four basis points to 4.25%.

• Nasdaq Composite: +18.1% YTD
• S&P 500:+14.8% YTD
• S&P Midcap 400: +5.0% YTD
• Dow Jones Industrial Average: +3.8% YTD
• Russell 2000: -0.5% YTD

Reviewing today's economic data: 

• Weekly initial jobless claims totaled 238,000 (Briefing.com consensus 237,000) following a revised count of 243,000 last week (from 242,000). Continuing claims came in at 1.828 million following last week's revised count of 1.813 million (from 1.820 million).
  • The key takeaway from the report is that jobless claims have moved up a notch from lower levels to connote some softening in the labor market.
• Housing starts totaled 1.277 million in May (Briefing.com consensus 1.385 million) following a revised count of 1.352 million in April (from 1.360 million). Building permits totaled 1.386 million in May (Briefing.com consensus 1.455 million) following a count of 1.440 million in April. 
  • The key takeaway from the report is that it suggests the housing market will remain subject to inventory constraints that will create affordability pressures, barring a stronger pickup in listings of existing homes for sale that has been tough to come by with mortgage rates remaining high.
• The Philadelphia Fed Index dropped to 1.3 in June (Briefing.com consensus 6.5) from 4.5 in May.
  • The key takeaway from the report is that the indexes for new orders, shipments, and employment all remained negative while the prices paid component increased from 18.7 to 22.5.
• The Q1 Current Account Balance widened to -$237.6 billion (Briefing.com consensus -$203.0 billion) from a downwardly revised $221.8 billion (from -$194.8 billion).
  • The key takeaway from the report is that the widening in the deficit mostly reflected an expanded deficit on goods.
• The weekly EIA Crude Oil Inventories showed a draw of 2.55 million barrels versus last week's build of 3.73 million barrels

Looking ahead, Friday's economic calendar includes:

• 9:45 ET: Flash June S&P Global U.S. Manufacturing PMI (prior 51.3) and flash June S&P Global U.S. Services PMI (prior 54.8)
• 10:00 ET: May Existing Home Sales (Briefing.com consensus 4.10 mln; prior 4.14 mln) and May Leading Indicators (Briefing.com consensus -0.3%; prior -0.6%)
• 10:30 ET: Weekly natural gas inventories (prior +75 bcf)