TheChek News Flow

The major average registered their fourth consecutive advance on Tuesday with the S&P 500 climbing 0.5%. The benchmark index reclaimed its 50-day moving average (2,100) at the start of the session while the tech-heavy Nasdaq Composite (+0.7%) outperformed throughout the trading day.

Equity indices began near their flat lines after overnight reports from Vienna revealed that P5+1 negotiators agreed to a nuclear deal with Iranian representatives. The news had little impact on the market, but crude oil was down about 2.0% overnight amid expectations that global oil supplies will increase once Iran begins selling its oil on the open market. However, an intraday rebound resulted in crude oil climbing 1.7% to $53.06/bbl. Accordingly, the energy sector (+0.8%) climbed alongside crude oil to end the day among the leaders, while only the health care sector (+1.0%) had a better showing.

The influential health care space finished the day well ahead of other countercyclical groups even though Johnson & Johnson (JNJ 99.78, -0.49) slumped 0.5% despite reporting a two-cent beat. However, biotechnology filled the void with iShares Nasdaq Biotechnology ETF (IBB 387.94, +8.79) spiking 2.3%, which contributed to the relative strength in the Nasdaq.

Furthermore, high-beta chipmakers also helped the Nasdaq stay ahead of the broader market with the PHLX Semiconductor Index rallying 1.1%. Micron (MU 19.61, +2.00) was the standout performer, soaring 11.4% after the Wall Street Journal reported Micron may have received a $21.00/share takeover offer from Tsinghua Unigroup. As for large cap tech names, Apple (AAPL 125.61, -0.05), Microsoft (MSFT 45.62, +0.08), and Oracle (ORCL 40.78, -0.02) ended near their flat lines while Google (GOOGL 584.18, +12.45) outperformed, climbing 2.2%.

Elsewhere among cyclical sectors, financials (+0.4%) spent the day behind the broader market even though JPMorgan Chase (JPM 69.04, +0.95) and Wells Fargo (WFC 57.25, +0.51) posted respective gains of 1.4% and 0.9% in reaction to earnings. JPMorgan Chase delivered a bottom-line beat on below-consensus revenue while Wells Fargo matched earnings expectations on revenue that missed estimates.

On the downside, the utilities sector (-0.1%) was the lone decliner, narrowing its July gain to 3.6%.

Treasuries spiked in the morning following a disappointing Retail Sales report. The 10-yr note settled just below its high with the benchmark yield falling five basis points to 2.40%.

Today's participation was in-line with recent totals as 680 million shares changed hands at the NYSE floor.  

Economic data included Retail Sales, Import/Export Prices, and Business Inventories:

• Retail sales declined 0.3% in June after increasing a downwardly revised 1.0% (from 1.2%) in May while the consensus expected an increase of 0.3% 
  • The motor vehicle manufacturers reported that unit sales declined to 17.2 million SAAR in June from 17.8 million SAAR in May, which translated into a sizable 1.1% decline in sales at motor vehicles and parts dealers 
  • Excluding motor vehicles, retail sales declined 0.1% in June after increasing a downwardly revised 0.8% (from 1.0%) in May while the consensus expected an increase of 0.5% 
  • Core sales, which exclude motor vehicle dealers, gasoline stations, and building material and supply stores, declined 0.1% in June after increasing 0.6% in May 
• Export prices, excluding agriculture, decreased 0.1% in June after increasing 0.7% in the prior reading 
  • Excluding oil, import prices decreased 0.2%, which followed last month's unchanged reading 
• Business inventories increased 0.3% in May after increasing an unrevised 0.4% in April while the Briefing.com consensus expected an increase of 0.2% 
  • The inventory changes from manufacturers (0.0%) and merchant wholesalers (0.8%) were known prior to the release. The only new information was that retailer inventories were flat in May after increasing 0.6% in April. 
  • Inventory declines from motor vehicle and parts retailers (-0.2%) and furniture and appliances retailers (-0.3%) were offset by increases from general merchandise stores (0.5%) and building material and supply stores (0.2%) 

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while June PPI (consensus 0.3%) and July Empire Manufacturing survey (consensus 3.5%) will both be released at 8:30 ET. Industrial Production (consensus 0.2%) and Capacity Utilization (expected 78.1%) for June will be reported at 9:15 ET while the Federal Reserve's July Beige Book will cross at 14:00 ET.

• Nasdaq Composite +7.8% YTD 
• Russell 2000 +5.6% YTD 
• S&P 500 +2.4% YTD 
• Dow Jones Industrial Average +1.3% YTD