Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.3%), Nasdaq Composite (+0.4%), and DJIA (+0.2%) are charting session highs as strength in mega-cap tech names pushes the major averages higher despite weak breadth. The smaller-cap Russell 2000 (-0.6%) and S&P Mid Cap 400 (-0.3%) have improved from session lows but remain in negative territory.

Unsurprisingly, today's action comes on lower than average volume, with subdued action keeping the major averages flat for much of the morning. 

The information technology sector (+0.7%) began a steady ascent from session lows in negative territory around 10:00 a.m. NVIDIA (NVDA 188.12, +4.43, +2.41%) leads the advance and is one of the best-performing S&P 500 names today. Notably, the office of the United States Trade Representative announced that it will be placing tariffs on semiconductors from China, but the tariff rate will remain at 0% for 18 months. 

Broadcom (AVGO 348.04, +6.58, +1.93%) also trades higher, though the PHLX Semiconductor Index (+0.4%) holds a more modest gain as other chipmaker names put up mixed performances. 

The communication services sector (+0.9%) holds the widest gain, with strong leadership coming from Alphabet (GOOG 315.28, +3.95, +1.27%). Strength across the market's largest names seats the Vanguard Mega Cap Growth ETF with a 0.5% gain, contributing to the outperformance of the market-weighted S&P 500 over the S&P 500 Equal Weighted Index (-0.3%). 

Five S&P 500 sectors currently hold gains amid weak breadth figures that see decliners outpace advancers by a roughly 3-to-2 margin on the NYSE and a roughly 5-to-3 clip on the Nasdaq. 

Losses are modest in nature, with the real estate (-0.3%) sector holding the widest loss. The defensive health care (-0.2%) and consumer staples (-0.2%) sectors are also among today's laggards. 

Corporate news flow has been light, which is not surprising given the upcoming holidays. Novo Nordisk A/S (NVO 52.26, +4.16, +8.66%) trades sharply higher after becoming the first company to gain FDA approval for an oral GLP-1 weight-loss pill, while ServiceNow (NOW 153.00, -3.68, -2.35%) trades lower after agreeing to acquire Armis for $7.5 billion. 

Meanwhile, the market received a sizable batch of economic data this morning. In particular, the GDP advanced at a 4.3% year-over-year rate in Q3 (Briefing.com consensus 3.0%), which was hotter than expected. The stock market opened flat following the delayed data release, though it did prove to send treasury yields higher. The 2-year note yield is up three basis points to 3.54%, and the 10-year note yield is back to its unchanged level at 4.17%. 

Reviewing today's data:

• Q3 GDP-Adv. 4.3% (Briefing.com consensus 3.0%); Prior 3.8%, Q3 GDP Deflator-Adv. 3.8% (Briefing.com consensus 2.7%); Prior 2.1%
  • The key takeaway from the report is that the U.S. economy was certainly running on the warm side in Q3. That will stir some concerns about the Fed's recent decision to cut rates in December and the risk of stoking increased inflation in pursuit of keeping the economy on a growth trajectory.
• October Durable Orders -2.2% (Briefing.com consensus 0.3%); Prior was revised to 0.7% from 0.5%, October Durable Goods - ex transportation 0.2% (Briefing.com consensus -1.1%); Prior was revised to 0.7% from 0.6%
  • The key takeaway from the report is that it was a better indicator of growth than meets the headline eye, evidenced by the 0.7% month-over-month increase in shipments and 0.5% month-over-month increase in new orders for nondefense capital goods excluding aircraft.
• November Industrial Production 0.2% (Briefing.com consensus 0.1%); Prior -0.1%, November Capacity Utilization 76.0% vs (Briefing.com consensus 77.4%); Prior 75.9%
  • The key takeaway from the report is that the uptick in November was driven entirely by mining output, which offset the absence of growth in manufacturing output and a 0.4% decline in utilities output.
• December Consumer Confidence 89.1 vs (Briefing.com consensus 89.0); Prior was revised to 92.9 from 88.7
  • The key takeaway from the report is that confidence sagged in December due largely to worries about labor market conditions.