Stock Market Update

[BRIEFING.COM] The stock market opened in a subdued fashion following Friday's rally, though solid performances across mega-cap and tech names keep the major averages mixed for the day despite broad-based losses elsewhere.

Eight S&P 500 sectors trade in negative territory, with the defensive health care (-1.3%), consumer staples (-1.2%), and utilities (-0.7%) sectors facing the widest losses. The losses in these sectors do not denote a "risk-on" mindset that often leaves these names behind but reflect some profit-taking among names that saw the most growth as the market wrestled with rate cut uncertainty prior to Friday's rally.

The consumer staples sector faces additional pressure as Keurig Dr Pepper (KDP 32.20, -2.94, -8.35%) trades sharply lower after the company announced plans to acquire Amsterdam-based JDE Peet's for €31.85 per share in cash, a 20% premium to Friday's close, for a total equity value of €15.7 billion. After the acquisition closes, KDP plans to separate into two independent, yet-to-be-named, U.S.-listed, publicly traded companies. This will create a growth-focused North America refreshment beverage company ("Beverage Co.") and the world's #1 pure-play coffee company ("Global Coffee Co.").

Meanwhile, the communication services (+0.9%) and information technology (+0.3%) sectors advance with strong leadership in their mega-cap constituents, while the energy sector (+0.3%) benefits from a $1.38 increase in crude oil prices to $65.04 per barrel, a change of 2.2%.

Within the mega-cap cohort, Alphabet (GOOG 210.69, +3.97, +1.92%) reached a new record high level, NVIDIA (NVDA 181.53, +3.54, +1.99%) trades higher ahead of its earnings report on Wednesday, and Tesla's (TSLA 345.35, +5.34, +1.57%) early gain has the consumer discretionary sector back on its flatline.

The Vanguard Mega Cap Growth ETF is up 0.3% today, with mega-cap strength helping the market-weighted S&P 500 (flat) outperform the S&P 500 Equal Weighted Index (-0.5%).

Despite the advance from the market's largest names, the S&P 500 trades flat, while the Nasdaq Composite (+0.3%) holds a modest gain, and the DJIA (-0.5%) lags.

Smaller-cap stocks are also giving back some of last week's gains, with the Russell 2000 (-0.5%) and S&P Mid Cap 400 (-0.5%) holding similar losses.

Furniture names are among today's laggards as shares of Williams-Sonoma (WSM 200.43, -2.99, -1.47%), Wayfair (W 73.37, -4.47, -5.74%), and RH (RH 230.88, -12.83, -5.26%) trade lower after President Trump announced a 50-day investigation into furniture imports, warning that shipments could face new tariffs once the review concludes.

Elsewhere on the trade front, President Trump and South Korean President Lee Jae-Myung are currently meeting at the White House, though the meeting has yet to generate any headlines of note. 

Reviewing today's data:

• July New Home Sales 652K (Briefing.com consensus 630K); Prior was revised to 656K from 627K
  • The key takeaway from the report is that the pace of sales was sluggish, owed in part to the upward revision for June. However, the affordability constraint associated with higher mortgage rates and a reduced supply of lower-priced homes was evident, as sales were lackluster month-over-month despite a drop in median and average selling prices.