Stock Market Update

[BRIEFING.COM] The stock market rallied for the third consecutive session. The Dow Jones Industrial Average jumped nearly 500 points, the S&P 500 registered a 2.0% gain, and the Nasdaq Composite gained 2.7%.

With today's move, the S&P 500 is 10.1% above its low close in April 8 (4,982.77). Short-covering and a fear of missing out on further gains contributed to the upside moves, boosted by strength in the mega cap and chipmakers spaces. 

The PHLX Semiconductor Index (SOX) surged 5.6% and the Vanguard Mega Cap Growth ETF (MGK) rose 3.1% from yesterday. It wasn't just mega caps and chipmakers, though. Many stocks benefitted from broad buying interest that was further supported by dropping market rates and positive economic data. 

The 10-yr yield settled eight basis points lower at 4.31%. The 2-yr yield settled seven basis points lower at 3.79%. Treasury yields were already lower before the market received another solid weekly initial claims number (222,000) and ahead of the $44 billion 7-yr note sale, which met soft demand.

Earnings news since yesterday's close has been a mixed bag. Chipotle Mexican Grill (CMG 49.54, +0.78, +1.6%), Southwest Airlines (LUV 26.46, +0.94, +3.7%), IBM (IBM 229.33, -16.15, -6.6%), and Merck (MRK 79.84, +1.10, +1.4%) issued some cautious-sounding guidance.

Names like Texas Instruments (TXN 162.13, +9.98, +6.6%), ServiceNow (NOW 938.57, +125.87, +15.5%), Whirlpool (WHR 78.97, +1.23, +1.6%) reported pleasing earnings and/or guidance.

• Dow Jones Industrial Average: -5.8% YTD
• S&P 500: -6.8% YTD
• S&P Midcap 400: -8.9% YTD
• Nasdaq Composite: -11.1% YTD
• Russell 2000: -12.2% YTD

Reviewing today's economic data:

• March Durable Orders 9.2% (Briefing.com consensus 1.5%); Prior 0.9%, March Durable Goods -ex transportation 0.0% (Briefing.com consensus 0.3%); Prior 0.7%
  • The key takeaway from the report is that there was a rebound in nondefense capital goods, excluding aircraft, which rose 0.1% following a 0.3% decline in February. This is indicative of a modest pickup in business spending, albeit before the reciprocal tariff upset on Liberation Day. New orders for primary metals increased 0.7% following a 1.3% increase in February.
• Weekly Initial Claims 222K (Briefing.com consensus 220K); Prior was revised to 216K from 215K, Weekly Continuing Claims 1.841 mln; Prior was revised to 1.878 mln from 1.885 mln
  • The key takeaway continues to be found in the leading indicator of initial jobless claims, which continue to run at low levels that are nowhere close to being associated with a recession.
• March Existing Home Sales 4.02 mln (Briefing.com consensus 4.20 mln); Prior was revised to 4.27 mln from 4.26 mln
  • The key takeaway from the report is that existing home sales declined month-over-month in all regions, while the median selling price increased month-over-month in all regions, signaling the affordability constraints buyers are facing with higher prices and relatively higher mortgage rates.

Looking ahead to Friday, market participants receive the following data:

• 10:00 ET: Final April University of Michigan Consumer Sentiment (Briefing.com consensus 48.5; prior 50.8)