Stock Market Update

[BRIEFING.COM] The stock market has a growth problem on its hands today. That has to do in part with the economy, but it has a lot to do today with the general weakness in the growth stock space that has been precipitated by some disappointing earnings reports and/or guidance.

One of the more meaningful catalysts, though, is the degree to which some stocks have been hit after their disappointments. Standard bearers in that regard include the likes of e.l.f. Beauty (ELF 77.31, -40.52, -34.39%), Duolingo (DUOL 191.02, -69.00, -26.54%), and Paycom Software (PAYC 161.62, -22.09, -12.02%), to name a few.

Other stocks, like Robinhood Markets (HOOD 132.96, -9.52, -6.68%) and Qualcomm (QCOM 173.11, -6.61, -3.68%), have gotten caught up in the fray despite some posting some otherwise fine results.

The pronounced weakness in the growth stock space has weighed on investor sentiment, with talk of price bubbles, excess speculation, and valuation angst in the mix. The biggest drag on the market today, however, stems from the mega-cap space, principally in shares of Tesla (TSLA 445.94, -16.13, -3.49%), NVIDIA (NVDA 189.61, -5.60, -2.87%), Amazon (AMZN 244.67, -5.53, -2.21%), and Microsoft (MSFT 498.21, -8.95, -1.76%).

They are down on profit-taking activity, although NVIDIA is likely feeling a little heat from reports that Alphabet (GOOG 286.45, +1.70, +0.60%; GOOGL 285.87, +1.56, +0.55%) will make its powerful AI chip, Ironwood, widely available in the coming weeks.

Strikingly, the market cap-weighted S&P 500 is down 0.9%, yet there are only two sectors down more than 0.9%. That would be the information technology sector (-1.6%), which is the most heavily weighted sector at 35.7% of the S&P 500's total market capitalization, and consumer discretionary (-2.2%).

Amazon and Tesla are the biggest drags on the latter sector, but weakness in DoorDash and Tapestry (TPR 98.07, -11.24, -10.28%) after their earnings reports and in CarMax (KMX 32.06, -8.75, -21.44%) after it issued disappointing Q3 guidance and announced its CEO is stepping down have had some pull as well.

Most stocks in the consumer discretionary sector are lower today, with some labor market worries factoring into that weakness. Before the open, Challenger, Gray & Christmas reported that job cuts in October (153,074) were the highest in any October since 2003.

That news, and the weakness in the stock market, has put a bid in the Treasury market. The 2-yr note yield is down seven basis points to 3.56%, and the 10-yr note yield is down seven basis points to 4.09%.