Stock Market Update

[BRIEFING.COM] The stock market started the week on a mixed note. The Nasdaq Composite (-0.4%) closed lower, clipped by losses in the mega cap space, while the S&P 500 (+0.2%), Russell 2000 (+0.2%), and Dow Jones Industrial Average (+0.9%) closed higher.

Buying picked up in the afternoon, but the overall vibe in the stock market was negative in the early going. The downside bias was related to rising market rates and ongoing concerns about inflation. The 10-yr yield rose another three basis points today to 4.80% and the 2-yr yield settled unchanged at 4.40%. The 30-yr bond yield settled just below 5.00%, up two basis points to 4.99%.

Rising oil prices ($78.99/bbl, +2.67, +3.6%) and the New York Fed's Survey of Consumer Expectations stoked the market's fears about higher inflation for longer. Expectations were unchanged at 3.0% at the one-year ahead horizon and increased to 3.0% from 2.6% at the three-year-ahead horizon. They declined to 2.7% from 2.9% at the five-year-ahead horizon.

There was no specific catalyst to account for the improvement in the stock market. Early on, market breadth favored decliners by a 3-to-2 margin at the NYSE and by a better than 2-to-1 margin at the Nasdaq. At the close, advancers led decliners by an 11-to-10 margin at the NYSE and decliners led advancers by a 4-to-3 margin at the Nasdaq. 

Outsized moves in the equity market were reserved for individual names with specific news items. UnitedHealth (UNH 541.14, +20.45, +3.9%) jumped in response to news that the U.S. proposed a 4.3% increase to Medicare Advantage plan payments, a $21 billion boost to insurers for Medicare payments, according to Bloomberg.

Moderna (MRNA 35.15, -7.10, -16.8%) was one of the biggest individual losers after slashing its FY25 revenue outlook.

Bank stocks outperformed in front earnings reports this week from big names in the sector. The SPDR S&P Bank ETF (KBE) gained 1.2%.

There was no US economic data of note today. 

• S&P Midcap 400: +0.1% YTD
• Nasdaq Composite: -1.2% YTD
• S&P 500: -0.8% YTD
• Russell 2000: -1.6% YTD
• Dow Jones Industrial Average: -0.6% YTD

Looking ahead, Tuesday's economic lineup features:

• 6:00 ET: December NFIB Small Business Optimism (prior 101.7)
• 8:30 ET: December PPI (Briefing.com consensus 0.3%; prior 0.4%) and Core PPI (Briefing.com consensus 0.2%; prior 0.2%)