Closing Stock Market Summary
The stock market spent most of today's session little changed from yesterday's closing levels. Stocks didn't have much of a reaction to another hot inflation reading in the form of January PPI and another jump in Treasury yields.
The major indices took a sharp turn lower in the late afternoon trade, however, ultimately closing near session lows. There was no specific catalyst to account for the afternoon deterioration, which was relatively modest compared to Tuesday's post CPI-slide.
The afternoon slide coincided with shares of NVIDIA (NVDA 726.13, -0.45, -0.1%) giving back early gains. NVDA had been up as much as 2.4% after Loop Capital started coverage with Buy rating and Street-high $1,200 price target.
Regardless of the late-session slide, market participants were not spooked by this morning's economic data, holding onto to hope that inflation will continue to go the market's way, that the macroenvironment will remain strong, and that the Fed will cut rates sooner rather than later.
The S&P 500 also found support on an early test of the 5,000 level, which acted as an early upside catalyst today. The index closed just above that level in front of this extended holiday weekend. As a reminder, bond and equity markets are closed on Monday for Presidents Day.
Only three of the 11 S&P 500 sectors closed higher -- materials (+0.5%), health care (+0.3%), and consumer staples (+0.2%) -- while the communication services sector (-1.6%) logged the largest decline, sliding under losses in Meta Platforms (META 473.32, -10.71, -2.2%) and Alphabet (GOOG 141.76, -2.18, -1.5%).
The 2-yr note yield settled nine basis points higher today, and 15 basis points higher this week, to 4.65%. The 10-yr note yield rose six basis points today, and jumped 11 basis points this week, to 4.30%.
- Nasdaq Composite: +5.1% YTD
- S&P 500: +4.9% YTD
- Dow Jones Industrial Average: +2.5% YTD
- S&P Midcap 400: +1.7% YTD
- Russell 2000: +0.3% YTD
Reviewing today's economic data:
- January Housing Starts 1.331 mln (consensus 1.470 mln); Prior was revised to 1.562 mln from 1.460 mln; January Building Permits 1.470 mln ( consensus 1.510 mln); Prior was revised to 1.493 mln from 1.495 mln
- The key takeaway from the report is that the weakness was concentrated in multi-family starts and permits, although single-family starts were down 4.7% in a disappointing development for an inventory-constrained housing market.
- January PPI 0.3% (consensus 0.1%); Prior was revised to -0.1% from -0.2%; January Core PPI 0.5% ( consensus 0.1%); Prior was revised to -0.1% from 0.0%
- The key takeaway from the report is a lot like the key takeaway from the hotter-than-expected January CPI report: whether the market chooses to dismiss this report as a function of seasonal adjustment factors, the fact of the matter is that the Fed isn't going to dismiss it, and will see it as a reason to remain patient with respect to cutting rates.
- February Univ. of Michigan Consumer Sentiment - Prelim 79.6 (consensus 79.3); Prior 79.0
- The key takeaway from the report is that consumers are feeling better about the economy with inflation pressures easing and the labor market showing continued strength.
As a reminder, bond and equity markets are closed on Monday for Presidents Day. Tuesday's economic calendar is limited to the January Leading Indicators Index at 10:00 ET.