Stock Market Update

[BRIEFING.COM] The stock market regrouped today and reclaimed a portion of the losses it suffered Friday, comforted somewhat by an understanding that the Israel-Iran conflict remains relatively contained and has not led to any major disruption in oil supply lines.

In a related development, press reports suggested today that Iran is working diplomatic channels to try to negotiate a ceasefire agreement with Israel, although Israel has not expressed similar overtures.

The latter point notwithstanding, the stock market was imbued with a positive bias that was the strongest at today's open, which carried the S&P 500 as high as 6,050. Buyers, though, didn't maintain that early conviction. The major indices trended lower from those opening highs in a gradual manner over the remainder of the session but still ended the day comfortably above the unchanged line.

The gains were fortified by the outperformance of the mega-cap stocks, which registered in the leadership of the information technology (+1.5%), communication services (+1.5%), and consumer discretionary (+1.2%) sectors. The Vanguard Mega-Cap Growth ETF (MGK) was up 1.3% versus a 0.9% gain for the S&P 500.

Separately, the semiconductor stocks were the standout performers, particularly Advanced Micro Devices (AMD 126.40, +10.24, +8.82%), which rallied on a CNBC report that the company might have secured a GPU deal with Amazon (AMZN 216.17, +4.07, +1.92%). The Philadelphia Semiconductor Index surged 3.0%, leaving it up 23.3% for the quarter.

On the flip side, defense stocks and energy shares retreated from Friday's leadership positions as the market's angst about the Israel-Iran conflict eased. 

The S&P 500 energy sector (-0.3%) traded lower in conjunction with WTI crude futures (71.83, -1.33, -1.8%). Relative weakness was also seen in the more defensive-oriented utilities (-0.5%), health care (-0.4%), and consumer staples (+0.02%) sectors.

Breadth figures favored advancers over decliners by a less than 2-to-1 margin at the NYSE and Nasdaq, with a narrowing in that edge as the session progressed.

• S&P 500: +2.6% YTD
• Nasdaq: +2.0% YTD
• DJIA: -0.1% YTD
• S&P 400: -2.7% YTD
• Russell 2000: -4.8% YTD

Reviewing today's economic data:

• The Empire State Manufacturing Survey for June was weaker than expected at -16.0 (Briefing.com consensus -6.6; prior -9.2), with the indexes for new orders and shipments both declining. This was the fourth consecutive decline in manufacturing activity in New York State; however, firms turned positive about conditions for the next six months.