Stock Market Update

[BRIEFING.COM] There's a positive bias in today's trade, but price action has been lackluster overall. Advancers lead decliners by a 5-to-3 margin at the NYSE and by a 4-to-3 margin at the Nasdaq. The major indices trade at session highs with modest gains. 

The muted action follows solid gains this week that brought the market back to levels seen in front of last week's sharp selloff. The S&P 500 is 3.9% higher than last Friday and the Nasdaq Composite sits on a 5.4% gain this week.

Today's lackluster showing also follows a disappointing housing starts and building permits report for July and a negative response to earnings results from chip equipment maker Applied Materials (AMAT 208.31, -3.52, -1.7%).

None of the S&P 500 sectors are moving more than 0.5% in either direction. The heavily-weighted communication services (+0.5%), financials (+0.5%), consumer discretionary (+0.4%), and information technology (+0.3%) sectors lead the pack while the real estate (-0.4%) and industrial (-0.2%) sectors show some of the "biggest" declines.

The energy sector is also underperforming the index, trading down 0.1% amid falling commodity prices. WTI crude oil futures are down 1.7% to $75.66/bbl and natural gas futures are down 3.1% to $2.13/mmbtu.

Moves in individual stocks have been relatively limited also. Tapestry (TPR 40.46, +1.26, +3.2%), which is adding to yesterday's gain following decent Q4 results, is the biggest advancer in the S&P 500 and Amcor (AMCR 10.30, -0.54, -5.0%), which reported earnings, is the biggest decliner.

The 10-yr note yield is down three basis points to 3.90% and the 2-yr note yield is down two basis points to 4.08%. 

Reviewing today's economic data:

• July Building Permits 1.396 mln (Briefing.com consensus 1.440 mln); Prior was revised to 1.454 mln from 1.446 mln, July Housing Starts 1.238 mln (Briefing.com consensus 1.350 mln); Prior was revised to 1.329 mln from 1.353 mln
  • There is some chatter that Hurricane Beryl had some influence over the disappointing data, yet that isn't a totally adequate excuse given the decline in single-unit starts and permits in the West where Hurricane Beryl had zero impact. The key takeaway, then, is that conditions in the residential construction market remain soft with higher rates acting as a constraint.
• August Univ. of Michigan Consumer Sentiment - Prelim 67.8 (Briefing.com consensus 66.7); Prior 66.4
  • The key takeaway from the report is that sentiment in August was swayed by political developments, yet the take-home point is that inflation is still the top concern among consumers.