Market Snapshot
briefing.com
| Dow | 34715.39 | -313.26 | (-0.89%) | | Nasdaq | 14154.02 | -186.23 | (-1.30%) | | SP 500 | 4482.73 | -50.03 | (-1.10%) | | 10-yr Note | +3/32 | 1.833 |
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| | NYSE | Adv 813 | Dec 2426 | Vol 941.5 mln | | Nasdaq | Adv 1196 | Dec 3192 | Vol 5.0 bln |
Industry Watch
| Strong: Utilities |
| | Weak: Consumer Discretionary, Materials, Information Technology, Industrials |
Moving the Market
-- Investors sell into strength (again) and market closes at session lows
-- Indiscriminate selling
-- Peloton (PTON) drops 24% on CNBC report that it's temporarily halting production of its bikes due to significantly lower demand
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Stocks tumble into the close, fading early gains
20-Jan-22 16:20 ET
Dow -313.26 at 34715.39, Nasdaq -186.23 at 14154.02, S&P -50.03 at 4482.73
[BRIEFING.COM] The S&P 500 declined 1.1% on Thursday in another disappointing session, as investors doubled down on the inclination to sell into strength. The benchmark index faded a 1.5% gain and closed the session down 7.0% from its all-time high.
The Nasdaq Composite fell 1.3% after being up 2.1% intraday. The Dow Jones Industrial Average fell 0.9% after being up 1.3% intraday. The Russell 2000 fell 1.9% after being up 2.0% intraday.
Ten of the 11 S&P 500 sectors closed lower after all 11 traded in positive territory in the morning. The consumer discretionary (-1.9%), materials (-1.4%), and information technology (-1.3%) sectors led the retreat, while the utilities sector (+0.1%) eked out a gain.
The bullish bias in the morning was attributed to a belief that the market was oversold on a short-term basis and was due for a bounce. Both the Nasdaq Composite and Russell 2000 entered the session in correction territory, or down at least 10% from a recent high.
Investors waited a little longer than yesterday to sell into strength, which ultimately diminished confidence in the market and scared away potential buyers on the fear that the dip will keep on dipping. The S&P 500 briefly topped the 4600 level around 10:00 a.m. ET before running into negative headlines later in the day.
Selling interest picked up after CNBC reported that Peloton (PTON 24.22, -7.62, -23.9%) is temporarily pausing production of its bikes due to waning consumer demand. Later, The Wall Street Journal reported that the U.S. gave approval for Estonia, Lithuania, and Latvia to send arms to Ukraine.
The Peloton story served as reminder of the risks that many story stocks still face if their stories don't play out as intended. The Ukraine story was more of a negative geopolitical headline in the middle of a market downturn, meaning the market was less disturbed by the report and saw it more as a convenient selling excuse.
The latter theory was supported by the lack of a safe-haven trade in Treasuries and gold ($1842.60/ozt, unch). The 10-yr yield increased just one basis point to 1.83% while the 2-yr yield rose four basis points to 1.05% on continued expectations for a more hawkish Fed. The U.S. Dollar Index gained 0.4% to 96.85. WTI crude futures fell 0.7%, or $0.57, to $86.29/bbl.
Pivoting to earnings news, United Airlines (UAL 42.88, -1.52, -3.4%) and American Airlines (AAL 16.76, -0.55, -3.2%) were swept up in the downturn after providing cautious near-term outlooks. Travelers (TRV 165.18, +5.11, +3.2%) and Union Pacific (UNP 242.07, +2.58, +1.1%) were two earnings standouts.
Reviewing Thursday's economic data:
- Initial claims for the week ending January 15 increased by 55,000 to 286,000 (Briefing.com consensus 211,000) while continuing claims for the week ending January 8 increased by 84,000 to 1.635 million.
- The key takeaway from the report is that it is apt to be construed as a sign of the negative impact the Omicron variant is having on the labor market since it is the highest initial claims number since October; moreover, this report includes the week in which the survey for the January employment report was conducted, so the higher print could dial down expectations for the gain in January nonfarm payrolls.
- Existing home sales declined 4.6% m/m in December to a seasonally adjusted annual rate of 6.18 million (Briefing.com consensus 6.42 million). Total sales in December were down 7.1% from a year ago. Total home sales in 2021, however, reached 6.12 million, which was up 8.5% year-over-year and the highest annual level since 2006.
- The key takeaway from the report is that prices remain high as inventory remains extremely tight. The supply constraint is crimping sales growth in the existing home market, as are increasing affordability pressures created by the high selling prices and rising mortgage rates.
- The Philadelphia Fed Index for January increased to 23.2 (Briefing.com consensus 20.0) from 15.4 in December.
Looking ahead, investors will receive the Conference Board's Leading Economic Index for December on Friday.
- Dow Jones Industrial Average -4.5% YTD
- S&P 500 -6.0% YTD
- Russell 2000 -9.9% YTD
- Nasdaq Composite -9.5% YTD
Market turns negative amid selling momentum
20-Jan-22 15:30 ET
Dow -41.77 at 34986.88, Nasdaq -62.00 at 14278.25, S&P -13.83 at 4518.93
[BRIEFING.COM] The S&P 500 has turned negative with a 0.3% decline as selling interest picks up. The inclination to sell into strength has undercut confidence in this market.
One last look at the sectors shows consumer discretionary (-1.0%) leading the market lower with a 1.0% decline amid weakness in Amazon (AMZN 3053.38, -73.25, -2.4%). Conversely, the utilities (+0.6%), energy (+0.4%), financials (+0.2%), and health care (+0.2%) sectors trade higher.
WTI crude futures settled lower by 0.7%, or $0.57, to $86.29/bbl. |
