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Mega-caps help market snap losing streak
22-Sep-20 16:20 ET
Dow +140.48 at 27278.18, Nasdaq +184.84 at 10963.66, S&P +34.51 at 3315.57

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

[BRIEFING.COM] The S&P 500 gained 1.1% on Tuesday, snapping a four-session losing streak alongside the Nasdaq Composite (+1.7%), which got an added boost from the mega-caps. The Dow Jones Industrial Average (+0.5%) and Russell 2000 (+0.8%) followed behind.

Amazon (AMZN 3128.99, +168.52) set the mega-cap pace with a 5.7% gain after the stock was upgraded to Outperform from Mkt Perform at Bernstein, although Apple (AAPL 111.81, +1.73, +1.6%) appeared to be the more influential mega-cap today. AAPL led the the S&P 500 into negative territory in the morning, but as the stock turned around on no news, so did the broad market.

From a sector perspective, the consumer discretionary sector (+3.0%) set the winning pace on the backs of Amazon and Nike (NKE 116.87, +3.50, +3.1%), which rallied ahead of its earnings report after the close. The communication services (+1.9%), information technology (+1.7%), real estate (+1.3%), and industrial (+1.0%) sectors followed suit.

Conversely, the energy (-1.0%), financials (-0.8%), and health care (-0.2%) sectors closed lower, limiting today's market rebound.

Tesla (TSLA 424.23, -25.16, -5.6%) was another exception after CEO Elon Musk tempered expectations for its Battery Day event today. Mr. Musk said yesterday that new products will not reach serious high-volume production until 2022.

In other developments, Fed Chair Powell and Treasury Secretary Mnuchin testified on the CARES Act before the House Financial Services Committee, and existing home sales increased 2.4% m/m in August to a seasonally adjusted annual rate of 6.00 million, in-line with the Briefing.com consensus estimate.

Market reaction was muted to both of these events, but it's worth noting that Mr. Powell reiterated the Fed will do whatever it takes to support the economy for as long as is needed.

U.S. Treasuries had another quiet session, finishing with small gains. The 2-yr yield declined one basis point to 0.13%, and the 10-yr yield declined one basis point to 0.66%. The U.S. Dollar Index gained 0.3% to 93.94. WTI crude futures gained 0.6%, or $0.25, to $39.55/bbl.

Reviewing Tuesday's economic data:

Existing home sales increased 2.4% m/m in August to a seasonally adjusted annual rate of 6.00 million, in-line with the Briefing.com consensus estimate. August marked the third consecutive month of positive sales gains. Total sales in August were up 10.5% from a year ago.
The key takeaway from the report is that it reflects robust demand for existing homes. That is constraining supply even further, which is going to be a pressure point that feeds higher prices and bolsters the prospects for new home sales.

Looking ahead, investors will receive the FHFA Housing Price Index for September and the weekly MBA Mortgage Applications Index on Wednesday.

Nasdaq Composite +22.2% YTD
S&P 500 +2.6% YTD
Dow Jones Industrial Average -4.4% YTD
Russell 2000 -10.3% YTD

Market Snapshot
Dow 27278.18 +140.48 (0.52%)
Nasdaq 10963.66 +184.84 (1.71%)
SP 500 3315.57 +34.51 (1.05%)
10-yr Note 0/32 0.672
NYSE Adv 1671 Dec 1292 Vol 947.3 mln
Nasdaq Adv 1698 Dec 1647 Vol 3.5 bln

Industry Watch
Strong: Consumer Discretionary, Communication Services, Information Technology
Weak: Energy, Financials, Health Care

Moving the Market

-- Mega-caps outperformed, led market rebound

-- S&P 500 and Nasdaq snap four-session losing streaks

-- Fed Chair Powell and Treasury Secretary Mnuchin testified on the CARES Act