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Market Snapshot

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

Dow 34687.85 -299.17 (-0.86%)
Nasdaq 14427.23 -115.90 (-0.80%)
SP 500 4327.16 -32.87 (-0.75%)
10-yr Note -22/32 1.300
NYSE Adv 957 Dec 2306 Vol 961.0 mln
Nasdaq Adv 1327 Dec 2913 Vol 4.0 bln

Industry Watch
Strong: Utilities, Real Estate, Consumer Staples, Health Care
Weak: Energy, Materials, Financials, Consumer Discretionary

Moving the Market

-- Market fades opening gains and closes lower

-- Consumer sentiment declines in July, according to prelim UofM Index

-- June retail sales report was better than expected

-- Relative weakness in cyclical stocks

Market fades positive start and closes lower
16-Jul-21 16:20 ET
Dow -299.17 at 34687.85, Nasdaq -115.90 at 14427.23, S&P -32.87 at 4327.16

[BRIEFING.COM] The S&P 500 fell 0.8% on Friday, as the market faded a positive start driven by the cyclical stocks and reverted to a defensive posture. The Nasdaq Composite (-0.8%), Dow Jones Industrial Average (-0.9%), and Russell 2000 (-1.2%) struggled alongside the benchmark index.

The opening gains ranged from 0.3% (Dow) to 0.9% (Russell 2000) after data showed total retail sales increase 0.6% m/m in June (Briefing.com consensus -0.6%). The Dow also came within two points of its all-time high.

Cyclical stocks quickly turned around, as did small-caps, on no specific catalyst, although a disappointing read on consumer sentiment appeared to reinforce the selling. The preliminary July reading for the University of Michigan Index of Consumer Sentiment slipped to 80.8 (Briefing.com consensus 86.3) from 85.5 in June.

The S&P 500 energy (-2.8%), materials (-1.5%), financials (-1.3%), and consumer discretionary (-1.3%) sectors piled on the losses into the close while the defensive-oriented utilities (+1.0%), consumer staples (+0.2%), real estate (+0.1%), and health care (+0.2%) sectors closed higher.

The Treasury market, meanwhile, continued to pressure the bank stocks -- the SPDR S&P Bank ETF (KBE 48.90, -1.26, -2.5%) dropped 2.5% -- while working in favor of those defensive sectors with relatively high dividend yields.

The 10-yr yield settled unchanged at 1.30%, even as consumers' expectations on inflation kept rising, according to the consumer sentiment report. The 10-yr yield touched 1.34% following the retail sales report. This remained well below the dividend yields of the real estate, utilities, and consumer staples sectors.

Charles Schwab (SCHW 68.89, -1.66, -2.4%) didn't help its own cause with a mixed earnings report, but State Street (STT 84.35, +2.38, +2.9%) did with better-than-expected quarterly results. Dow Inc. (DOW 60.01, -1.90, -3.1%) was downgraded to Underperform from Neutral at BofA Securities.

Separately, Moderna (MRNA 286.4., +26.75, +10.3%) jumped 10% on news it will join the S&P 500 on July 21. Intel (INTC 54.97, -0.84, -1.5%) is reportedly in talks to acquire GlobalFoundries for $30 billion.

The 2-yr yield was unchanged at 0.23%. The U.S. Dollar Index increased 0.1% to 92.71. WTI crude futures increased 0.1%, or $0.10, to $71.76/bbl.

Reviewing Friday's economic data, which featured the Retail Sales report for June:

Total retail sales, weighed down by a 2.0% decline in motor vehicle and parts dealers sales, still increased 0.6% month-over-month (Briefing.com consensus -0.6%) following a downwardly revised 1.7% decline (from -1.3%) in May. Excluding autos, retail sales jumped 1.3% month-over-month (Briefing.com consensus +0.3%) following a downwardly revised 0.9% decline (from -0.7%) in May.
The key takeaway from the report is the stronger-than-expected read for the ex-auto figure, which reflects the unleashing of pent-up demand on the part of consumers flush with cash and a desire to leave their house.
The preliminary July reading for the University of Michigan Index of Consumer Sentiment slipped to 80.8 (Briefing.com consensus 86.3) from the final reading of 85.5 for June. This is the lowest reading since February and compares to the 99.3 reading seen in July 2020.
The key takeaway from the report is the understanding that consumer sentiment declined as consumers' inflation expectations rose.
Business inventories increased 0.5% m/m in May (Briefing.com consensus +0.4%) following an upwardly revised 0.1% increase (from -0.2%) in April.

Looking ahead, investors will receive the NAHB Housing Market Index for July on Monday.

S&P 500 +15.2% YTD
Dow Jones Industrial Average +13.3% YTD
Nasdaq Composite +11.9% YTD
Russell 2000 +9.5% YTD

Energy stocks selling off despite muted change in oil prices
16-Jul-21 15:30 ET
Dow -273.08 at 34713.94, Nasdaq -99.78 at 14443.35, S&P -28.26 at 4331.77

[BRIEFING.COM] The S&P 500 is down 0.7% and on track to end the week with a 0.9% decline.

One last look at the sector standings shows energy (-2.8%), materials (-1.6%), financials (-1.4%), and consumer discretionary (-1.1%) down more than 1.0% right now, with energy down 3%. The utilities (+1.4%), real estate (+0.4%), health care (+0.4%), and consumer staples (+0.2%) sectors trade higher.

WTI crude futures settled higher by 0.1%, or $0.10, to $71.76/bbl.