Stock Market Update

[BRIEFING.COM] The stock market is having a quiet Friday session after yesterday's gains pushed the S&P 500 to new record highs. The S&P 500 (-0.2%), Nasdaq Composite (-0.5%), and DJIA (-0.2%) trade in a narrow range below their baselines amid a lack of new developments today.

Many of the market's largest single-stock declines are within the information technology sector (-0.5%), which weighs on the major averages. Applied Materials (AMAT 508.10, -26.44, -4.95%) sees some profit-taking after a solid earnings report, while Broadcom (AVGO 393.50, -24.32, -5.82%) is a laggard among large chipmakers. The PHLX Semiconductor Index is down 0.9%. Those losses are somewhat softened by continued strength in memory names, with Sandisk (SNDK 1631.05, +102.94, +6.74%) among the top-performing S&P 500 components, extending yesterday's rally after JPMorgan resumed coverage with an Overweight rating and a target of $2250.

Software stocks made a strong run yesterday afternoon, which ate into the early gains of semiconductor stocks, but they too are giving back some of that strength. Workday (WDAY 199.21, -7.24, -3.51%) moves lower after yesterday's 18% surge that followed news that Silver Lake is in talks to acquire the company, and the iShares GS Software ETF is down 1.6%.

The health care sector (-0.5%) holds a loss similar to that of the technology sector, while losses elsewhere are confined to 0.2% or narrower.

Meanwhile, six S&P 500 sectors trade higher, which helps keep the S&P 500 Equal Weighted Index flat for the day. The energy sector (+1.6%) is the only sector with a gain wider than 0.5% as crude oil drifts modestly higher, currently up $0.66 (+0.8%) to $81.91 per barrel. Halliburton (HAL 34.35, +1.51, +4.60%) is a standout, though there has been a lack of new developments regarding the U.S. and Iran.

Outside of the S&P 500, the Russell 2000 (+0.4%) and S&P Mid Cap 400 (+0.2%) reflect some underlying strength outside of mega-cap tech, with both indices notching fresh record highs again today.

With this week's key inflation readings meeting expectations and now in the rearview, the market is largely without a directional catalyst, which has translated to relatively muted action across equities today. That leaves the S&P 500 on track for a modest week-to-date gain, while the Nasdaq Composite is tracking for a flat weekly finish, and the DJIA is on pace for a modest loss.

Reviewing today's data:

• July Retail Sales -0.6% (Briefing.com consensus 0.2%); Prior 0.2%, July Retail Sales, ex-auto -0.3% (Briefing.com consensus 0.2%); Prior -0.2%
  
  • The key takeaway from the report is that control retail sales dropped 0.4% month-over-month. This figure will feed into GDP forecasts, so there are apt to be some downward revisions to Q3 GDP forecasts.
• June Business Inventories 0.0% (Briefing.com consensus 0.1%); Prior was revised to 0.4% from 0.3%
• August Univ. of Michigan Consumer Sentiment - Prelim 51.0 (Briefing.com consensus 54.5); Prior 55.2
  
  • The key takeaway from the report is that only 8% of all consumers surveyed expect their income growth to exceed inflation in the year ahead. That expectation could ultimately translate into lower discretionary spending activity.