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Market closes lower in disappointing session
24-Mar-21 16:15 ET
Dow -3.09 at 32420.06, Nasdaq -265.81 at 12961.91, S&P -21.38 at 3889.14

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

[BRIEFING.COM] The S&P 500 declined 0.6% on Wednesday in a disappointing session from a price action perspective. The benchmark index was up as much as 0.8% in the morning on the back of renewed strength in the cyclical stocks, but weakness in the mega-cap/growth stocks limited the early advance with broader selling interest picking up into the close.

The Nasdaq Composite fell 2.0% after being up 0.5% in early action, and the Russell 2000 fell 2.4% after being up 1.7% in early action. The Dow Jones Industrial Average (-0.01%) closed relatively unchanged after being up 1.1% intraday.

There was a strong pro-cyclical trade to start the day after Intel (INTC 62.04, -1.44, -2.3%) announced plans to invest $20 billion to build two semiconductor manufacturing facilities in Arizona, the eurozone reported stronger-than-expected flash March Manufacturing PMIs, and more states announced plans to expand COVID-19 vaccine eligibility.

The cyclical trade, however, lost steam in the afternoon, tempering the gains in the S&P 500 energy (+2.5%), industrials (+0.7%), materials (+0.7%), and financials (+0.4%) sectors. The real culprits behind the negative index performances, though, were the influential information technology (-1.2%), consumer discretionary (-1.5%), and communication services (-1.7%) sectors.

Interestingly, the growth stocks within these key sectors underperformed for most of the day despite the friendly action in the Treasury market. The inability to react positively to lower rates perhaps fueled uncertainty about the path of growth stocks, many of which remain well below their recent all-time highs.

The 10-yr yield decreased two basis points to 1.61% amid an uptick in demand following the $61 billion 5-yr note auction. The 2-yr yield decreased one basis point to 0.14%. The U.S. Dollar Index increased 0.3% to 92.58. WTI crude futures rebounded 5.9%, or $3.38, to $61.13/bbl amid technical and supply-side factors.

Within the technology sector, shares of Intel were up 6% at the open following its strategic announcement, but shares quickly turned around in a sell-the-news reaction after briefly hitting a 52-week high. Adobe (ADBE 451.51, -8.69, -1.9%) also gave up an opening gain despite beating top and bottom-line estimates and issuing upbeat guidance for Q2 and FY21.

Elsewhere, the ARK Innovation ETF (ARKK 114.78, -6.92, -5.7%) fell 5.7% while shares of GameStop (GME 120.34, -61.41, -33.8%) plunged 34% following its earnings report.

Cruise lines were an exemption to the cyclical trade after the CDC said cruise line restrictions will remain until Nov. 1 despite calls for a phase-in resumption in early July, according to Bloomberg. Shares of Carnival (CCL 24.85, -0.48, -1.9%) declined 2% after trading higher by around 8% prior to the news.

Reviewing Wednesday's economic data:

Durable goods orders declined 1.1% m/m in February (Briefing.com consensus +0.9%) following an upwardly revised 3.5% increase (from 3.4%) in January. Excluding transportation, durable goods orders dropped 0.9% m/m (Briefing.com consensus +0.6%) following an upwardly revised 1.6% increase (from 1.4%) in January.
The key takeaway from the report is that the disappointing data for February followed on the heels of some notable strength in January, which in turn followed on the heels of some notable strength in prior months, suggesting that it is most likely only a temporary pause in the strengthening demand for durable goods.
The IHS final Markit Manufacturing PMI for March checked in at 59.0 vs. 58.6 in the preliminary reading. The final Services PMI for March checked in at 60.0 vs. 59.8 in the preliminary reading.
The weekly MBA Mortgage Applications Index decreased 2.5% following a 2.2% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the third estimate for Q4 GDP on Thursday.

Russell 2000 +8.1% YTD
Dow Jones Industrial Average +5.9% YTD
S&P 500 +3.5% YTD
Nasdaq Composite +0.6% YTD

Cruise lines turn negative after CDC balks on phase-in request
24-Mar-21 15:30 ET
Dow +133.40 at 32556.55, Nasdaq -184.11 at 13043.61, S&P -1.19 at 3909.33

[BRIEFING.COM] The S&P 500 has slipped below its flat line, while the Nasdaq (-1.4%) and Russell 2000 (-1.1%) underperform with losses over 1.0%.

The cyclical trade has some of its early luster. Cruse lines, for instance, have turned negative after the CDC said cruise line restrictions will remain until Nov. 1 despite calls for a phase-in resumption in early July, according to Bloomberg. Carnival (CCL 24.89, -0.44, -1.7%) is down 1.7% after trading higher by 8% prior to the news.

This hasn't affected oil prices, though. WTI crude futures settled higher by 5.9%, or $3.38, to $61.13/bbl as OPEC+ reportedly wants to keep output steady for another month to help offset lower demand in Europe.