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Technology stocks drag market lower
13-Jul-20 16:15 ET
Dow +10.50 at 26085.80, Nasdaq -226.50 at 10390.94, S&P -29.82 at 3155.22

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 advanced as much as 1.6% on Monday, but a confluence of negative-sounding headlines caused noticeable profit taking in many of the technology-related stocks that left the benchmark index down 0.9% for the session. The Nasdaq Composite fell 2.1%, and Russell 2000 fell 1.3%. The Dow Jones Industrial Average (+0.04%) eked out a fractional gain.

The S&P 500 information technology (-2.1%), communication services (-2.0%), and consumer discretionary (-1.7%) sectors declined the most, while the health care (+0.5%), industrials (+0.4%), and financials (+0.3%) sectors showed relative strength.

The day started in rally mode with the FAANG stocks hitting fresh all-time highs and health care stocks outperforming after two COVID-19 vaccine candidates from the Pfizer (PFE 35.21, +1.38, +4.1%) and BioNTech (BNTX 77.78, +7.42, +10.6%) collaboration received fast-track designation from the FDA.

After the S&P 500 topped out at the 3235.28 level at around 1:40 p.m. ET, the Treasury Budget for June revealed a record $864.1 billion deficit, the Los Angeles and San Diego Unified School Districts announced that the new school year will start remotely, and Secretary of State Pompeo confirmed the U.S. will strengthen its policy on China's territorial claims in the South China Sea.

Losses accelerated, taking the market into negative territory, after California Governor Newsom announced all counties have to re-close indoor operations in several business sectors due to the coronavirus. In addition, the inability of the S&P 500 to stay above its June 8 closing level (3232.39) likely contributed to the downwards momentum.

Shares of Tesla (TSLA 1497.06, -47.59, -3.1%), which were up as much as 16%, turned negative and encouraged profit taking in many of the other mega-cap technology stocks that some say had gotten overbought. Each of the FAANG stocks closed lower.

In other developments, PepsiCo (PEP 134.94, +0.45, +0.3%) beat top and bottom-line estimates; Analog Devices (ADI 117.25, -7.25, -5.8%) issued upside Q3 guidance and agreed to acquire Maxim Integrated (MXIM 69.29, +5.20, +8.1%) for approximately $21 billion in stock; and Macau lifted its quarantine travel restrictions, boosting many of the casino stocks.

U.S. Treasuries ended the session near their flat lines. The 2-yr yield was flat at 0.16%, and the 10-yr yield increased one basis point to 0.64%. The U.S. Dollar Index decreased 0.1% to 96.54. WTI crude decreased 1.2%, or $0.49, to $40.08/bbl.

Reviewing Monday's economic data:

The Treasury Budget was earmarked with a gaping (and record) $864.1 billion deficit for the month of June. This budget data is not seasonally adjusted, so the June deficit cannot be compared to the May deficit of $398.7 billion other than to say both qualify as massive shortfalls in terms of government finances. The deficit in June 2019 was $8.5 billion.
The key takeaway from the report is that the huge swing in the budget was a function of the tax filing deadline being extended, and government spending surging, due to stimulus measures employed in response to the COVID-19 impact.

Looking ahead, investors will receive the Consumer Price Index for June on Tuesday.

Nasdaq Composite +15.8% YTD
S&P 500 -2.3% YTD
Dow Jones Industrial Average -8.6% YTD
Russell 2000 -15.9% YTD

Market Snapshot
Dow 26085.80 +10.50 (0.04%)
Nasdaq 10390.94 -226.50 (-2.13%)
SP 500 3155.22 -29.82 (-0.94%)
10-yr Note +24/32 0.625
NYSE Adv 1056 Dec 1886 Vol 1.0 bln
Nasdaq Adv 910 Dec 2188 Vol 4.8 bln

Industry Watch
Strong: Health Care, Financials, Industrials, Utilities
Weak: Information Technology, Communication Services, Consumer Discretionary, Real Estate

Moving the Market

-- Market closes at lows amid negative-sounding developments; technology stocks succumbed to profit taking

-- California Governor Newsome announced all counties to re-close indoor operations in several sectors

-- Los Angeles and San Diego Unified School Districts announced that the new school year will start online only

-- June Treasury Budget reveals a huge $864.1 billion deficit; the U.S. plans to oppose certain Chinese territorial claims in the South China Sea

-- Pfizer (PFE) and BioNTech (BNTX) received fast track designation from FDA for two of their COVID-19 vaccine candidates

WTI crude closes lower as stocks trade at lows
13-Jul-20 15:25 ET
Dow +229.30 at 26304.60, Nasdaq -106.04 at 10511.40, S&P -2.77 at 3182.27

[BRIEFING.COM] The S&P 500 is now trading lower by 0.1% after being up as much as 1.6% midday.

One last look at the S&P 500 sectors shows real estate (-1.1%), information technology (-1.0%), communication services (-1.0%), and consumer discretionary (-0.6%) leading the market in losses. Conversely, the financials (+1.1%), health Care (+1.1%), and materials (+0.8%) sectors show relative strength.

WTI crude futures settled the session lower by $0.49 (-1.2%) to $40.08/bbl.