Stock Market Update from Briefing.com

4:10 pm: [BRIEFING.COM] The stock market endured a volatile session on Thursday, but a steady rebound off morning lows helped the major averages register their first gain in three days. The Dow Jones Industrial Average paced the advance (+1.3%) while the S&P 500 (+1.0%) reclaimed its 100-day moving average (2,010).

Equities faced some selling pressure at the start amid continued weakness in crude oil. The energy component set a fresh January low in the $43.60/bbl area, but was able to charge back to unchanged by the pit close. That rebound improved the overall risk tolerance and helped the S&P 500 find support just a point above its January low (1988.12). Dip buyers entered the picture about 90 minutes after the start of the session, which helped all ten sectors rebound off their lows.

The materials space (+1.4%) finished in the lead thanks to better than expected earnings from Dow Chemical (DOW 45.02, +1.99). The stock spiked 4.6% and gave a boost to its peers. Meanwhile, the other commodity-related sector-energy (+0.2%)-was the weakest performer.

Elsewhere, the discretionary sector (+1.3%) outperformed throughout the session after several major components reported earnings. Homebuilders surged after PulteGroup (PHM 21.82, +1.24) and Ryland Group (RYL 39.62, +2.95) reported better than expected results with iShares Dow Jones US Home Construction ETF (ITB 25.86, +0.83) spiking 3.3%. Heavily-weighted Ford (F 14.85, +0.39) and McDonald's (MCD 93.27, +4.49) also rallied after the former beat estimates while the latter announced the retirement of its Chief Executive Officer. The broad strength within the sector overshadowed an 8.8% loss in the shares of Alibaba (BABA 89.81, -8.64) after the company missed revenue expectations.

Similarly, the industrial sector (+1.2%) outperformed while technology (+1.1%) overtook the broader market into the close. Top-weighted names like Apple (AAPL 118.90, +3.59), IBM (IBM 155.48, +3.93), and Microsoft (MSFT 42.01, +0.82) jumped between 2.0% and 3.1%, which helped overshadow a 10.3% decline in Qualcomm (QCOM 63.69, -7.30) brought on by disappointing guidance for the fiscal year.

When the dust settled, four of six cyclical sectors ended ahead of the S&P 500 while the utilities sector (+1.3%) represented the only outperformer on the countercyclical side.

Treasuries spent the day in a steady retreat with the 10-yr yield climbing four basis points to 1.76%.

Today's participation was a bit above average as 843 million shares changed hands at the NYSE floor.

Economic data was limited to jobless claims and pending home sales:

  • The initial claims level dropped to 265,000 for the week ending January 24 from an upwardly revised 308,000 (from 307,000) while the Briefing.com consensus expected a decline to 301,000 
    • Not only did the drop break three consecutive weeks above 300,000, but the initial claims level fell to its lowest level since April 2000 o As it has for the past several months, the Department of Labor reported that there were no special factors impacting the report 
    • The continuing claims level declined to 2.385 million from an upwardly revised 2.456 million (from 2.443 million) while the consensus expected a drop to 2.429 million 
  • Pending home sales for December fell 3.7% while the Briefing.com consensus expected an increase of 0.6% 
Tomorrow, the advance reading of Q4 GDP (Briefing.com consensus 3.2%) will be released at 8:30 ET alongside the Q4 Employment Cost Index (consensus 0.5%). The Chicago PMI report for January (consensus 58.0) will cross the wires at 9:45 ET while the final reading of the January Michigan Sentiment Index will be reported at 9:55 ET (consensus 98.2).
  • Nasdaq Composite -1.1% YTD 
  • Russell 2000 -1.1% YTD 
  • S&P 500 -1.8% YTD 
  • Dow Jones Industrial Average -2.3% YTD

3:00 pm: [BRIEFING.COM] The S&P 500 trades higher by 0.6% with one hour remaining in the session. The benchmark index struggled in the early going, but was able to stage a rebound with some help from crude oil, which recovered off its January low that was set earlier this morning.

If the current gain holds, the benchmark index will register its first advance since Monday. The S&P 500 was able to reclaim its 100-day moving average today (2,010), but remains lower by 1.9% for the week and down 2.2% for the month with just one more January session remaining.

The January retreat in equities has been accompanied by bond strength. The 10-yr note charged higher through the first two weeks of the month before spending the past two weeks in a relatively narrow range. The benchmark yield hovers near 1.75% after ending 2014 at 2.17%.

2:30 pm: [BRIEFING.COM] The S&P 500 trades near its best level of the session.

On the economic front, the initial claims level showed a sizable improvement in labor market conditions compared to recent weeks.

The initial claims level dropped to 265,000 for the week ending January 24 from an upwardly revised 308,000 (from 307,000) for the week ending January 17. The Briefing.com Consensus expected the initial claims level to fall to 301,000.  

Not only did the drop break three consecutive weeks above 300,000, but the initial claims level fell to its lowest level since April 2000.

2:00 pm: [BRIEFING.COM] Equity indices have powered to new highs in a move that coincided with a rebound in crude oil. The energy component has returned to unchanged after setting a new January low in the $43.60/bbl area.

Meanwhile, all ten economic sectors have moved higher since our last update while the S&P 500 (+0.4%) has been able to regain its 100-day moving average (2,010) after diving below that level yesterday.

The uptick in equities likely lured some money out of the bond market as Treasuries dropped to new lows, pushing the 10-yr yield up to 1.78% (+6 bps).

Investors appear to have been emboldened by the recent move, evidenced by the CBOE Volatility Index (VIX 19.45, -0.99), which has marked a fresh session low as participants remove some of their hedges.

1:35 pm: [BRIEFING.COM] U.S. indices remain mixed at this time but have found some upside momentum in the last half hour. 
 
The recent bounce in the major U.S. indices has seen most of the S&P sectors turn into positive territory. Energy (-0.4%) remains the biggest laggard on the day, but it, too, has turned in the last half hour to offer some support to the rebound effort. After dropping to new multi-year lows earlier, WTI crude (-0.17 to $44.28/bbl) has staged a late rally ahead of the pit close.  
 
Elsewhere in commodities, precious metals prices are under heavy pressure with gold -2.5% to $1254/troy oz and silver down 7% to $16.83/troy oz 
 
Some notable tech earnings are expected after the close from Amazon (AMZN) and Google (GOOG). 
 
At the top of the hour, an auction of $29 bln 7-year notes drew a high yield of 1.59% on a 2.50 bid-to-cover ratio that was close to the prior 12-auction average of 2.56.

12:55 pm: [BRIEFING.COM] The stock market is mixed at midday with the Dow Jones Industrial Average (+0.2%) defending a modest gain while the Nasdaq (-0.4%) and S&P 500 (-0.2%) trade lower.

Equity indices have endured a choppy first half of the session after yesterday's 1.4% slide sent the S&P 500 below its 100-day moving average (2,010). The benchmark index distanced itself from that level at the start of today's session, but was able to find a measure of support in the 1,990 area, which represents the lowest level of the year.

The energy sector (-1.2%) fueled the early retreat as crude oil failed to hold its morning gain. The energy component was up near 0.7%, but is now lower by 1.2% at $43.92/bbl after setting a fresh January low.

Meanwhile, most of the remaining cyclical sectors have held up relatively well with the exception of technology (-0.4%). Disappointing guidance from Qualcomm (QCOM 62.74, -8.25) has the stock trading lower by 11.6% while other influential sector members trade mixed. Google (GOOGL 506.80, -5.63) has given up 1.1% while Apple (AAPL 117.20, +1.89) trades higher by 1.7%.

Qualcomm's sharp decline has contributed to the underperformance of the Nasdaq Composite with the index also pressured by Alibaba's (BABA 89.28, -9.17) below-consensus revenue. The stock has tumbled 9.3%, but the discretionary sector (+0.3%) has been able to overcome that loss thanks to better than expected earnings from Coach (COH 38.81, +2.35), Ford (F 14.68, +0.22), and news indicating McDonald's (MCD 92.69, +3.91) will replace its retiring Chief Executive Officer.

Similar to the discretionary sector, financials (+0.2%), materials (+0.4%) and utilities (+0.6%) outperform while health care (-0.3%) and telecom services (-0.6%) lag.

Treasuries have followed yesterday's surge with a steady slide that has the 10-yr yield higher by four basis points at 1.76%.

Economic data was limited to jobless claims and pending home sales:

  • The initial claims level dropped to 265,000 for the week ending January 24 from an upwardly revised 308,000 (from 307,000) while the Briefing.com consensus expected a decline to 301,000 
    • Not only did the drop break three consecutive weeks above 300,000, but the initial claims level fell to its lowest level since April 2000 
    • As it has for the past several months, the Department of Labor reported that there were no special factors impacting the report 
    • The continuing claims level declined to 2.385 million from an upwardly revised 2.456 million (from 2.443 million) while the consensus expected a drop to 2.429 million 
  • Pending home sales for December fell 3.7% while the Briefing.com consensus expected an increase of 0.6%

12:25 pm: [BRIEFING.COM] The major averages trade in mixed fashion with the Dow (+0.4%) and S&P 500 (+0.02%) up while the Nasdaq (-0.2%) trails.

The Nasdaq owes its underperformance to a handful large stocks like Google (GOOGL 506.72, -5.70), Alibaba (BABA 89.61, -8.84), and Qualcomm (QCOM 62.95, -8.04), with the latter two down near 10.0% apiece after reporting earnings. Alibaba missed revenue estimates while Qualcomm beat expectations, but lowered its guidance for the fiscal year.

Additionally, biotechnology names have struggled to keep pace with the market, evidenced by a 0.3% decline in the iShares Nasdaq Biotechnology ETF (IBB 318.15, -0.83). Similarly, the health care sector (-0.2%) is among the underperformers.

11:55 am: [BRIEFING.COM] Recent action saw the S&P 500 inch back into the neighborhood of its flat line, but five sectors remain in the red with energy (-1.2%) pressured by a 1.5% decline in the price of crude oil ($43.77/bbl).

Meanwhile, the five advancers sport modest gains with utilities (+0.5%) and materials (+0.4%) in the lead; however, the two groups have little influence over the market since they only represent just over 6.0% of the entire market.

Elsewhere, the consumer discretionary sector (+0.4%) also trades ahead of the broader market thanks to better than expected earnings from Ford (F 14.61, +0.15) and Coach (COH 38.80, +2.34) and news of leadership change at McDonald's (MCD 92.76, +3.98).

11:30 am: [BRIEFING.COM] The S&P 500 (-0.4%) remains just above its session low while the Dow Jones Industrial Average (+0.1%) has climbed back above its flat line.

The price-weighted Dow has received support from some of its top-weighted components like Boeing (BA 144.10, +4.47), Goldman Sachs (GS 174.34, +1.29), and IBM (IBM 152.57, +1.02). The three names are up between 0.6% and 3.2% while the largest index member by weight-Visa (V 245.99, -0.37)-is lower by 0.2%.

Elsewhere, Treasuries have extended their losses with the 10-yr yield now up four basis points at 1.76%.

10:55 am: [BRIEFING.COM] Equity indices have dropped to new lows with the S&P 500 down 0.6% after being rejected by its flat line. Although there's still plenty of time left in today's session, the current loss puts the benchmark index on course to register its third consecutive decline.

Furthermore, with just one more trading day left in January, the index is all but assured to end the month in negative territory. The S&P 500 has given up 3.3% since the end of 2014 while only the Dow has had a worse showing. The price-weighted index is lower by 3.8% for the month.

All ten sectors trade in the red with energy (-1.9%) at the bottom of the leaderboard. The sector is now down 7.6% for the month while crude oil has dropped to a new January low. The energy component is lower by 1.6% at $43.74/bbl.

10:45 am: [BRIEFING.COM]

  • Natural gas futures erased gains in recent trade and dropped sharply following the weekly storage data
  • In current trade, Mar nat gas is -4.1% at $2.73/MMBtu
  • WTI crude was getting pushed higher in morning trade and rose as high as $44.96/barrel
  • In more recent trade, crude oil been selling off and just fell back below $44/barrel. Mar crude is now -1.1% at $43.96/barrel
  • Metals have been weak this morning, led by silver weakness
  • Mar silver futures just fell another leg lower and are now -4.4% at $17.29/oz
  • Feb gold is -1.5% at $1266.30/oz
  • Mar copper is currently -1.2% at $2.45/lb

10:00 am: [BRIEFING.COM] The S&P 500 trades lower by 0.1%.

Pending home sales for December fell 3.7%, while the Briefing.com consensus expected an increase of 0.6%.

9:40 am: [BRIEFING.COM] The major averages began the day with modest gains before slipping into the red due to weakness among heavily-weighted sectors. To that point, technology (-0.4%), health care (-0.4%), and energy (-0.4%) hover in the red while financials (+0.1%) and consumer discretionary (+0.1%) outperform.

On the commodity front, crude oil is higher by 0.6% at $44.74/bbl while the Dollar Index trades flat.

Treasuries have slipped to new lows, pushing the 10-yr yield higher by three basis points to 1.75%.

The Pending Home Sales report for December (consensus 0.6%) will be released at 10:00 ET.

9:13 am: [BRIEFING.COM] S&P futures vs fair value: -1.00. Nasdaq futures vs fair value: -7.50. The stock market is on track for a flat open as futures on the S&P 500 trade within a point of fair value. Index futures saw additional losses after yesterday's session, but an overnight rebound has erased most of that decline. At their current levels, futures hover a bit below their best levels of pre-market action with the pullback occurring amid weakness in Europe where UK's FTSE (-0.6%) and Germany's DAX (-0.2%) trade in the red.

Investors have received another full batch of earnings today with the results coming in mixed. Alexion Pharmaceuticals (ALXN 175.00, -2.78), Alibaba Group (BABA 89.86, -8.59), and Qualcomm (QCOM 66.00, -4.99) are on track to open lower after disappointing with their results or guidance while Blackstone (BX 37.15, +0.41), Ford (F 14.54, +0.08), and Coach (COH 39.99, +3.53) are on course for early gains in reaction to better than expected results.

In other corporate news, McDonald's (MCD 91.40, +2.62) is higher by 3.0% after announcing CEO Don Thompson will retire and be replaced by Steve Easterbrook.

On the economic front, weekly Initial Claims fell to 265,000 from a revised rate of 308,000 while the Briefing.com consensus expected a decline to 301,000.

The Pending Home Sales report for December (consensus 0.6%) will be released at 10:00 ET.

Treasuries hover in the red with the 10-yr yield up two basis points at 1.74%.

8:56 am: [BRIEFING.COM] S&P futures vs fair value: +1.80. Nasdaq futures vs fair value: -0.80. The S&P 500 futures trade two points above fair value.

Asian markets ended lower, taking the lead from yesterday's retreat on Wall Street. The Reserve Bank of New Zealand made no changes to its policy, keeping its key interest rate at 3.5%, as expected. The central bank took a dovish stance in its statement and hinted a rate cut could be in the cards. Elsewhere, the probability of a rate cut at the next Reserve Bank of Australia meeting surged above 40.0% amid the continued slide in commodities, especially iron ore.

  • In economic data: 
    • Japan's Retail Sales ticked up 0.2% year-over-year (expected 0.9%; previous 0.5%) 
    • Australia's Export Price Index was unchanged quarter-over-quarter (expected -1.0%; prior -3.9%) while Import Price Index rose 0.9% (expected 1.5%; previous -0.8%). Separately, CB Leading Index ticked up 0.1% month-over-month (previous -0.2%) 
    • New Zealand's trade deficit widened to NZD1.12 billion from NZD499 million (expected deficit of NZD980 million) 
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  • Japan's Nikkei (-1.1%) settled near its session low with industrials pressuring the index. Hitachi Construction plunged 10.9% on disappointing earnings while Komatsu and FANUC lost 8.5% and 3.4%, respectively. 
  • Hong Kong's Hang Seng (-1.1%) spent the entire session ranging near its low. Property-related names lagged with China Resources Land and China Overseas Land falling close to 4.0% apiece. 
  • China's Shanghai Composite (-1.3%) was pressured by industrial names. Shanghai Construction and Sichuan Road & Bridge both lost near 5.0%. 
  • India's Sensex (+0.4%) outperformed, climbing to a new record high. Dr Reddy's Laboratories led with a gain of 3.8% while HDFC Bank (+3.5%) followed right behind after receiving approval of its fundraising plan. 
Major European indices trade in the red after sliding from highs over the past hour.
  • Economic data was plentiful: 
    • Eurozone Business and Consumer Survey rose to 101.2 from 100.6 (expected 101.5). Separately, M3 Money Supply grew 3.6% year-over-year (expected 3.5%; prior 3.1%) while Private Loans declined 0.5% year-over-year (consensus -0.7%; last -0.9%) 
    • Germany's Claimant Count declined by 9,000 (expected -10,000; prior -25,000) while the Unemployment Rate ticked down to 6.5% from 6.6%, as expected 
    • UK's CBI Distributive Trades Survey fell to 39 from 61 (expected 30) while Nationwide HPI rose 6.8% year-over-year (expected 6.6%; prior 7.2%) 
    • Italy's Wage Inflation came in at 1.1% year-over-year, as expected. Separately, Business Confidence ticked down to 97.1 from 97.3 (expected 98.0) while Consumer Confidence rose to 104.0 from 99.9 (consensus 100.0) 
    • Spain's Retail Sales rose 6.5% year-over-year (expected 2.5%; prior 1.9%) 
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  • Germany's DAX is lower by 0.2% with consumer and health care names under pressure. Adidas and Fresenius SE hold respective losses of 0.9% and 1.8%. On the upside, Deutsche Bank is higher by 3.0% after beating earnings estimates. 
  • In France, the CAC is down 0.3%. Energy names lag with Technip and Total down 3.0% and 2.1%, respectively. On the upside, Pernod Ricard and L'Oreal are both up near 1.0%. 
  • UK's FTSE has given up 0.6%. BP, BG Group, and Royal Dutch Shell are down between 2.6% and 5.1% while easyJet has jumped 3.8%.

8:32 am: [BRIEFING.COM] S&P futures vs fair value: -1.00. Nasdaq futures vs fair value: -5.50. The S&P 500 futures trade one point below fair value.

The latest weekly initial jobless claims count totaled 265,000 while the Briefing.com consensus expected a reading of 301,000. Today's tally was below the revised prior week count of 308,000 (from 307,000). As for continuing claims, they fell to 2.385 million from 2.456 million.

8:03 am: [BRIEFING.COM] S&P futures vs fair value: -2.00. Nasdaq futures vs fair value: -7.30. U.S. equity futures trade little changed amid subdued action overseas. The S&P 500 futures hover two points below fair value after spending the night in a steady advance off overnight lows. On the commodity front, crude oil trades little changed at $44.43/bbl following yesterday's 3.6% plunge while copper futures are lower by 1.5% at $2.442/lb.

Today's economic data will be limited to weekly Initial Claims, set to be reported at 8:30 ET (Briefing.com consensus 301K), while the Pending Home Sales report for December (consensus 0.6%) will be released at 10:00 ET.

Treasuries are modestly lower with the 10-yr yield up two basis points at 1.74%.

In U.S. corporate news of note:

  • Alexion Pharmaceuticals (ALXN 173.00, -4.78): -2.7% after beating expectations and guiding lower. 
  • Alibaba Group (BABA 93.40, -5.05): -5.1% in reaction to a bottom-line beat on below-consensus revenue. 
  • Blackstone (BX 37.34, +0.60): +1.6% following its better than expected report. 
  • Celgene (CELG 120.25, +1.28): +1.1% after reporting a two-cent beat and reaffirming its guidance. 
  • Dow Chemical (DOW 44.70, +1.67): +3.9% in reaction to better than expected earnings. 
  • Facebook (FB 76.41, +0.17): +0.2% after beating earnings and revenue estimates. 
  • Ford Motor (F 14.85, +0.39): +2.7% after beating bottom-line estimates on light revenue. 
  • Qualcomm (QCOM 65.22, -5.77): -8.1% after better than expected results were overshadowed by lowered guidance for the fiscal year.
Reviewing overnight developments:
  • Asian markets ended lower. Japan's Nikkei -1.1%, Hong Kong's Hang Seng -1.1%, and China's Shanghai Composite -1.3% 
    • In economic data: 
      • Japan's Retail Sales ticked up 0.2% year-over-year (expected 0.9%; previous 0.5%) 
      • Australia's Export Price Index was unchanged quarter-over-quarter (expected -1.0%; prior -3.9%) while Import Price Index rose 0.9% (expected 1.5%; previous -0.8%). Separately, CB Leading Index ticked up 0.1% month-over-month (previous -0.2%) 
      • New Zealand's trade deficit widened to NZD1.12 billion from NZD499 million (expected deficit of NZD980 million) 
    • In news: 
      • The Reserve Bank of New Zealand made no changes to its policy, keeping its key interest rate at 3.5%, as expected. The central bank took a dovish stance in its statement and hinted a rate cut could be in the cards. 
      • In Australia, the probability of a rate cut at the next Reserve Bank of Australia meeting surged above 40.0% amid the continued slide in commodities, especially iron ore.
  • Major European indices trade near their flat lines. UK's FTSE -0.4%, Germany's DAX +0.1%, and France's CAC -0.1%. Elsewhere, Spain's IBEX -0.5% and Italy's MIB +0.1% 
    • Economic data was plentiful: 
      • Eurozone Business and Consumer Survey rose to 101.2 from 100.6 (expected 101.5). Separately, M3 Money Supply grew 3.6% year-over-year (expected 3.5%; prior 3.1%) while Private Loans declined 0.5% year-over-year (consensus -0.7%; last -0.9%) 
      • Germany's Claimant Count declined by 9,000 (expected -10,000; prior -25,000) while the Unemployment Rate ticked down to 6.5% from 6.6%, as expected 
      • UK's CBI Distributive Trades Survey fell to 39 from 61 (expected 30) while Nationwide HPI rose 6.8% year-over-year (expected 6.6%; prior 7.2%) 
      • Italy's Wage Inflation came in at 1.1% year-over-year, as expected. Separately, Business Confidence ticked down to 97.1 from 97.3 (expected 98.0) while Consumer Confidence rose to 104.0 from 99.9 (consensus 100.0) 
      • Spain's Retail Sales rose 6.5% year-over-year (expected 2.5%; prior 1.9%) 
    • Among news of note: 
      • Germany's DAX has received a measure of support from Deutsche Bank after the company reported better than expected results for the fourth quarter.

7:03 am: [BRIEFING.COM] S&P futures vs fair value: +5.00. Nasdaq futures vs fair value: +6.00.

7:03 am: [BRIEFING.COM] Nikkei...17,606.22...-189.50...-1.10%.  Hang Seng...24,595.85...-266.00...-1.10%.

7:03 am: [BRIEFING.COM] FTSE...6,794.61...-31.40...-0.50%.  DAX...10,729.02...+18.40...+0.20%.

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