Stock Market Update from Briefing.com

Briefing.com

12:55 pm: [BRIEFING.COM] The major averages hover in the red at midday with the S&P 500 (-0.5%) and Nasdaq Composite (-0.5%) trading behind the Dow Jones Industrial Average (-0.6%).

Equity indices began the day on a slightly higher note, but they were quickly pressured into the red and back below their 50-day moving averages. Furthermore, the Dow has slipped to its 100-day moving average (17,835), where it currently trades.

Nine sectors sport midday losses with heavily-weighted technology (-0.8%), financials (-0.7%), and health care (-0.7%) largely responsible for the weakness.

The top-weighted technology sector has been pressured by some of its largest components like Apple (AAPL 124.51, -1.29), Google (GOOGL 540.31, -2.74), IBM (IBM 169.84, -1.94), and Microsoft (MSFT 46.69, -0.91) while high-beta chipmakers have fared a bit better. That being said, heavyweight Intel (INTC 32.07, -0.57) has surrendered 1.7% while the PHLX Semiconductor Index is lower by 0.4%.

Elsewhere, the health care sector lags even though biotechnology has held its own. The iShares Nasdaq Biotechnology ETF (IBB 340.61, +2.61) has gained 0.8% as it hovers in the middle of yesterday's trading range.

Similarly, another high-beta group-transports-has shown relative strength with the Dow Jones Transportation Average trading higher by 0.3%. Conversely, the relative strength has helped the industrial sector climb above its flat line.

On the upside, energy (+0.2%) and materials (+0.3%) hold slim gains, but the energy sector has slid from its early high amid a pullback in crude oil. The energy component was up more than 3.5% in the early going, but that gain has been trimmed to 1.5% at $61.30/bbl.

Similar to stocks, Treasuries have faced some selling with the 10-yr note sitting on its low, sending its yield higher by six basis points to 2.25%.

Economic data included ADP Employment, Productivity/Unit Labor Cost data, and MBA Mortgage Index:

  • The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 169K in April while the Briefing.com consensus expected a reading of 189K 
    • The March reading was revised down to 175,000 from 189,000 
  • Nonfarm business productivity declined 1.9% in Q1 2015 after declining an upwardly revised 2.1% (from -2.2%) in Q4 2014 while the Briefing.com consensus expected a decline of 1.8% 
    • This was the first time nonfarm business productivity declined for two consecutive quarters since Q2 and Q3 of 2006. Even during the Great Recession, productivity managed to inch ahead on an upward trend 
    • Unit labor costs increased 5.0% in Q1 2015 after increasing 4.2% in Q4 2014 
      • That was the biggest increase in unit labor costs since an 11.5% increase in Q1 2014 
  • The weekly MBA Mortgage Index fell 4.6% to follow last week's 2.3% decline

12:25 pm: [BRIEFING.COM] The S&P 500 remains lower by 0.3% with nine sectors trading in the red.

Interestingly, the financial sector (-0.5%) displayed relative strength in the early going, but the cyclical group is now among the laggards while other heavily-weighted sectors like technology (-0.5%) and health care (-0.4%) also underperform.

Large cap names have pressured the tech sector while high-beta chipmakers trade in mixed fashion with the PHLX Semiconductor Index down 0.3%. As for influential sector members, Apple (AAPL 124.77, -1.03), Microsoft (MSFT 46.76, -0.84), Intel (INTC 32.20, -0.44), and Hewlett-Packard (HPQ 32.62, -0.54) are down between 0.8% and 1.8%.

Elsewhere, Treasuries have marked new lows for the day with the 10-yr yield up five basis points at 2.24%.

11:55 am: [BRIEFING.COM] Not much change since our most recent update with the S&P 500 (-0.2%) holding a slim loss.

The energy sector spent the first two hours of the session in the green, but the cyclical group has returned to its flat line amid a pullback in crude oil. WTI crude was up more than 3.5% in the early going, but that gain has narrowed to 0.8% at $60.86/bbl.

Elsewhere among cyclical sectors, technology (-0.4%) remains weak while the industrial sector (+0.2%) has climbed into the green with help from high-beta transport stocks. The Dow Jones Transportation Average has gained 0.5% with just three components trading in the red at this time.

11:25 am: [BRIEFING.COM] Equity indices have backed off their recent levels with the S&P 500 (-0.3%) having yet to overtake its 50-day moving average (2,090) after sliding below that mark at the start of today's session.

Only energy (+0.3%) and materials (+0.1%) continue holding modest gains while the remaining nine sectors show losses between 0.1% (industrials) and 0.9% (telecom services).

The telecom services space is the weakest performer while another countercyclical group-health care (-0.4%)-trades not far behind the broader market. The influential sector has struggled even though biotechnology outperforms with the iShares Nasdaq Biotechnology ETF (IBB 341.08, +3.08) trading higher by 0.9%. The biotech ETF is currently trapped right between its 50- and 100-day moving averages.

10:55 am: [BRIEFING.COM] The major averages have climbed off their lows with the S&P 500 returning to the unchanged level. Furthermore, the index now hovers just below its 50-day moving average (2,090), which has served as an area of support throughout April.

Six sectors remain in negative territory with influential technology (-0.3%) and health care (-0.3%) sectors weighing on the market. On the flip side, the energy sector (+0.9%) has climbed to a new session high while two other cyclical groups-materials (+0.6%) and industrials (+0.2%)-also hold gains.

Elsewhere, Treasuries have slipped to new lows, pushing the 10-yr yield up to 2.22% (+3 bps).

10:40 am: [BRIEFING.COM]

  • The dollar index has fallen to session lows in most recent trade, following the release of bearish economic data. 
  • The index's move has given support to several commodities, notably precious metals and crude oil.
  • The index now stands -1.2% to 93.92
  • Crude oil extended overnight gains in early trade, ahead of Weekly EIA Inventory data that expected a build of 1.4 mln barrels
  • Upon release of the data, crude rose to new highs for the year, just above $62.50. Oil is now +2.8% at $62.07/barrel
  • Precious metals saw a modest rally following this morning's dollar weakness, and are back to near flat from yesterday's close
  • June gold is now -0.2% at $1190.50/oz while July silver is now +0.1% at $16.60/oz
  • July copper is trading modestly lower at -0.2% to $2.93/lb  and June nat gas up 1.1% to $2.81/MMBtu

10:00 am: [BRIEFING.COM] Equity indices have extended their opening losses with the S&P 500 now down 0.4% while the Dow (-0.5%) underperforms.

The energy sector (+0.1%) is the lone group trading in the green while the weakest sector-telecom services-has widened its decline to 1.0%. More notably, the top-weighted technology space has given up 0.6% with large cap names like Apple (AAPL 124.59, -1.21), Google (GOOGL 539.67, -3.38), and Intel (INTC 32.32, -0.32) down between 0.7% and 1.1%.

9:45 am: [BRIEFING.COM] The major averages began the day with modest gains, but they were quick to drop into the red. The S&P 500 is lower by 0.3% with eight sectors showing early losses.

Heavily-weighted health care (-0.7%), technology (-0.5%), and consumer discretionary (-0.4%) are among the early laggards while energy (+0.6%) and materials (+0.1%) hold slim gains.

Elsewhere, Treasuries continue holding slim losses with the 10-yr yield up a basis point at 2.20%.

9:10 am: [BRIEFING.COM] S&P futures vs fair value: +6.10. Nasdaq futures vs fair value: +6.90. The stock market is on track for a higher open as futures on the S&P 500 trade six points above fair value. Index futures traded in the red following a defensive session in Asia, but rallied off their lows alongside European equity indices.

Economic data released this morning has had little impact on futures even though the ADP Employment report for April (169K; Briefing.com consensus 189K) missed expectations; however, the report was met with a pullback in the Dollar Index (94.43, -0.65) while Treasuries returned into the green. At this time, the 10-yr note holds a modest gain with its yield down two basis points at 2.19%.

Looking at today's remaining data, Unit labor costs increased 5.0% during the first quarter, which was higher than the 4.5% increase that had been anticipated by the Briefing.com consensus. During the same period, productivity decreased 1.9%, according to the preliminary reading. The consensus expectation was for a decrease of 1.8%.

Also of note, the weekly MBA Mortgage Index fell 4.6% to follow last week's 2.3% decline.

On the corporate front, Anheuser-Busch Inbev (BUD 121.10, +3.90) is on track to open higher by 3.3% in reaction to better than expected earnings while Fossil (FOSL 84.12, -2.34) has surrendered 2.7% in pre-market despite beating bottom-line estimates and guiding Q2 earnings above analyst expectations. The stock was downgraded to 'Market Perform' from 'Outperform' at Cowen.

8:53 am: [BRIEFING.COM] S&P futures vs fair value: +6.00. Nasdaq futures vs fair value: +6.30. The S&P 500 futures trade six points above fair value.

It was a rough outing Wednesday for most markets in the Asia-Pacific region, which struggled on the heels of weak showings from Wall Street and Europe on Tuesday. The inability of the Shanghai Composite (-1.6%) to hold early gains and disappointing bank earnings out of Australia (-2.3%) also weighed on sentiment.

  • In economic data: 
    • China's April HSBC Services PMI 52.9 (expected 53.1; prior 52.3) 
    • Hong Kong's April Manufacturing PMI 48.6 (prior 49.6) 
    • India's April HSBC Services PMI 52.4 (prior 53.0) 
    • New Zealand's Q1 Employment Change +0.7% quarter-over-quarter (expected 0.8%; prior 1.2%); Q1 Unemployment Rate 5.8% (expected 5.5%; prior 5.8%); Q1 Labor Cost Index +0.3% quarter-over-quarter (expected 0.4%; prior 0.5%); +1.8% year-over-year (expected 2.0%; prior 1.8%) 
    • Australia's March Retail Sales +0.3% month-over-month (expected 0.4%; prior 0.7%); +0.7% quarter-over-quarter (expected 0.9%; prior 1.2%). Separately, March New Home Sales +4.4% month-over-month (prior 1.1%) 
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  • Japan's Nikkei closed for holiday (Greenery Day) 
  • Hong Kong's Hang Seng declined 0.4%, failing to hold earlier gains as it followed mainland shares lower in late action. The consumer cyclical (-1.5%) and basic materials (-1.3%) sectors were the biggest losers. China Resources Power Holdings (-4.4%), China Overseas Land & Development (-4.1%), China Unicom Hong Kong (-3.5%), and Galaxy Entertainment (-2.9%) paced individual decliners. China Mengniu Dairy (+7.5%) was the best-performing stock. Out of the 50 index members, 13 ended higher, 32 finished lower, and 5 were unchanged. 
  • China's Shanghai Composite declined 1.6% on the back of a late-session selloff that erased earlier gains as concerns about the market being overheated continued to weigh. The HSBC Services PMI report for April wasn't as strong as expected, but was still at its highest level (52.9) this year. The utilities (-3.7%), energy (-3.2%), and basic materials (-2.3%) sectors were the weakest areas in the Chinese market on Wednesday. 
Major European indices trade higher across the board with Germany's DAX (+0.6%) leading the rebound from yesterday's region-wide drop. In news, Greece has made a EUR200 million payment to the International Monetary Fund, according to a government official. The country is expected to pay another EUR780 million next Tuesday.
  • In economic data: 
    • Eurozone April Services PMI 54.1 (expected 53.7; prior 53.7) while March Retail Sales -0.8% month-over-month (consensus -0.7%; last 0.1%) 
    • Germany's April Services PMI 54.0 (consensus 54.4; last 54.4) 
    • France's April Services PMI 51.4 (expected 50.8; prior 50.8) 
    • Spain's April Services PMI 60.3 (forecast 57.4; prior 57.3) 
    • Italy's April Services PMI 53.1 (expected 52.0; last 51.6) 
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  • UK's FTSE has added 0.4% with help from consumer names. GKN, International Consolidated Airlines, and Imperial Tobacco are up between 1.4% and 3.4%. Miners are among the laggards with Antofagasta, BHP Billiton, Glencore, and Fresnillo down between 0.5% and 1.9%. 
  • In France, the CAC trades up 0.5% amid mixed action in financial names. AXA and BNP Paribas are both up near 2.0% while Societe Generale trades down 2.4%. 
  • Germany's DAX is higher by 0.6% with most components trading in the green. Infineon Technologies leads with a gain of 1.9% while Volkswagen is the weakest performer, down 1.9%. Drug makers have contributed to the strength of the index with Bayer and Merck holding respective gains of 1.5% and 1.2%.

8:30 am: [BRIEFING.COM] S&P futures vs fair value: +6.50. Nasdaq futures vs fair value: +9.80. The S&P 500 futures trade seven points above fair value.

The ADP National Employment Report revealed that employment in the nonfarm private business sector rose by 169K in April. That was below the increase of 189K expected by the Briefing.com consensus. The March reading was revised down to 175,000 from 189,000.

Also of note, Unit labor costs increased 5.0% during the first quarter, which was higher than the 4.5% increase that had been anticipated by the Briefing.com consensus. During the same period, productivity decreased 1.9%, according to the preliminary reading. The consensus expectation was for a decrease of 1.8%.

7:55 am: [BRIEFING.COM] S&P futures vs fair value: +7.20. Nasdaq futures vs fair value: +5.90. U.S. equity futures trade modestly higher amid upbeat action overseas. The S&P 500 futures trade seven points above fair value after climbing off their lows at the start of the European session.

The weekly MBA Mortgage Index fell 4.6% to follow last week's 2.3% decline.

April ADP Employment Change (Briefing.com consensus 189K) and Q1 Productivity/Unit Labor Cost Data will be released at 8:15 ET and 8:30 ET, respectively.

Treasuries trade little changed with the 10-yr yield at 2.21%.

In U.S. corporate news of note:

  • Anheuser-Busch Inbev (BUD 120.86, +3.66): +3.1% in reaction to better than expected earnings. 
  • Electronic Arts (EA 61.25, +2.09): +3.5% after beating estimates and issuing below-consensus guidance. 
  • Fossil (FOSL 84.20, -2.26): -2.6% despite beating bottom-line estimates and guiding Q2 earnings above analyst expectations. The stock was downgraded to 'Market Perform' from 'Outperform' at Cowen. 
  • Herbalife (HLF 46.21, +6.12): +15.3% after beating estimates and guiding Q2 earnings above consensus expectations. 
  • SodaStream (SODA 19.67, +0.56): +2.9% after beating earnings expectations on light revenue. 
Reviewing overnight developments:
  • Asian markets ended lower. China's Shanghai Composite -1.6%, Hong Kong's Hang Seng -0.4%, and Japan's Nikkei remained closed for Greenery Day. 
    • In economic data: 
      • China's April HSBC Services PMI 52.9 (expected 53.1; prior 52.3) 
      • Hong Kong's April Manufacturing PMI 48.6 (prior 49.6) 
      • India's April HSBC Services PMI 52.4 (prior 53.0) 
      • New Zealand's Q1 Employment Change +0.7% quarter-over-quarter (expected 0.8%; prior 1.2%); Q1 Unemployment Rate 5.8% (expected 5.5%; prior 5.8%); Q1 Labor Cost Index +0.3% quarter-over-quarter (expected 0.4%; prior 0.5%); +1.8% year-over-year (expected 2.0%; prior 1.8%) 
      • Australia's March Retail Sales +0.3% month-over-month (expected 0.4%; prior 0.7%); +0.7% quarter-over-quarter (expected 0.9%; prior 1.2%). Separately, March New Home Sales +4.4% month-over-month (prior 1.1%) 
    • In news: 
      • Hong Kong's Manufacturing PMI hit a seven-month low with HSBC noting that business conditions have deteriorated in the private sector and are likely to remain difficult during the second quarter.
  • Major European indices trade higher across the board. UK's FTSE +0.3%, France's CAC +0.7%, and Germany's DAX +1.0%. Elsewhere, Spain's IBEX +0.9% and Italy's MIB +0.9% 
    • In economic data: 
      • Eurozone April Services PMI 54.1 (expected 53.7; prior 53.7) while March Retail Sales -0.8% month-over-month (consensus -0.7%; last 0.1%) 
      • Germany's April Services PMI 54.0 (consensus 54.4; last 54.4) 
      • France's April Services PMI 51.4 (expected 50.8; prior 50.8) 
      • Spain's April Services PMI 60.3 (forecast 57.4; prior 57.3) 
      • Italy's April Services PMI 53.1 (expected 52.0; last 51.6) 
    • Among news of note: 
      • Greece has made a EUR200 million payment to the International Monetary Fund, according to a government official. The country is expected to pay another EUR780 million next Tuesday.

5:48 am: [BRIEFING.COM] S&P futures vs fair value: +7.50. Nasdaq futures vs fair value: +9.60.

5:48 am: [BRIEFING.COM] Nikkei...Holiday.........  Hang Seng...27640.91...-114.60...-0.40%.

5:48 am: [BRIEFING.COM] FTSE...6956.68...+29.10...+0.40%.  DAX...11428.04...+100.40...+0.90%.

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