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Market Snapshot

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

Dow 34792.67 -323.73 (-0.92%)
Nasdaq 14780.52 +19.24 (0.13%)
SP 500 4402.66 -20.49 (-0.46%)
10-yr Note 0/32 1.174
NYSE Adv 1073 Dec 2157 Vol 886.2 mln
Nasdaq Adv 1551 Dec 2726 Vol 4.3 bln

Industry Watch
Strong: Information Technology, Communication Services
Weak: Energy, Industrials, Consumer Staples

Moving the Market

-- Consolidation activity and signs of fatigue, although there were pockets of excess speculation

-- 10-yr yield rebounds after July ISM Non-Manufacturing Index hit record high

-- ADP Employment Change report for July missed expectations by a wide margin

Nasdaq escapes with a gain in tired session
04-Aug-21 16:15 ET
Dow -323.73 at 34792.67, Nasdaq +19.24 at 14780.52, S&P -20.49 at 4402.66

[BRIEFING.COM] The S&P 500 decreased 0.5% on Wednesday in a tired session. The more interesting action happened in the Treasury market, shares of Robinhood Markets (HOOD 70.39, +23.59, +50.4%), and a handful of other technology-related stocks in the Nasdaq Composite (+0.1%).

The Nasdaq ended the session in positive territory, while the Dow Jones Industrial Average (-0.9%) and Russell 2000 (-1.2%) underperformed the S&P 500.

Starting with the Treasury market since it's more tied to economic matters, the 10-yr yield traded as low as 1.13% after the July ADP Employment Change report missed expectations by a wide margin, stirring concerns about the Employment Situation report on Friday. The ADP estimated that private-sector payrolls increased by 330,000 in July (Briefing.com consensus 650,000).

The 10-yr yield then jumped to 1.21% after the release of the July ISM Non-Manufacturing Index at 10:00 a.m. ET, which increased to a record high of 64.1% (Briefing.com consensus 60.5%). The 10-yr yield settled the session at 1.18%, or one basis point above yesterday's settlement.

The price action in the S&P 500 was more subdued amid continued consolidation activity (even though it eked out a record close yesterday). Nine of the 11 S&P 500 sectors closed lower, including energy (-2.9%), industrials (-1.4%), and consumer staples (-1.3%) with losses over 1.0%.

Energy stocks followed oil prices ($68.16, -2.41, -3.4%) lower, while the communication services (+0.2%) and information technology (+0.2%) sectors were the only sectors that closed higher.

Robinhood, meanwhile, garnered a lot of media attention with its 50% gain that wasn't driven by any fundamental news. Interestingly, some of that frenzied activity carried over to Moderna (MRNA 419.05, +32.54, +8.4%), AMD (AMD 118.77, +6.21, +5.5%), and Zoom Video (ZM 400.58, +25.70, +6.9%), all of which climbed on heavy volume.

Facebook (FB 358.92, +7.68, +2.2%) was another standout, rising 2% on below-average volume. CVS Health (CVS 81.55, -2.45, -2.9%), General Motors (GM 52.72, -5.16, -8.9%), and Lyft (LYFT 49.53, -5.85, -10.6%), on the other hand, declined noticeably following their earnings reports.

Separately, Fed Vice Chair Clarida said he believes the necessary conditions for raising the target range for the fed funds rate will have been met by year-end 2022. The Fed-funds-sensitive 2-yr yield was unchanged at 0.17%. The U.S. Dollar Index increased 0.2% to 92.27.

Reviewing Wednesday's economic data:

The ISM Non-Manufacturing Index for July increased to 64.1% (Briefing.com consensus 60.5%) from 60.1% in June. The dividing line between expansion and contraction is 50.0%. The July reading is a record high, eclipsing the former high of 64.0% seen in May, and marks the fourteenth straight month of growth for the services sector.
The key takeaway from the report is the understanding that services sector activity is running at a record pace while prices aren't far behind. The report is a testament to the unleashing of pent-up demand, which is running headlong into supply challenges on the labor and product fronts.
The ADP Employment Change report estimated 330,000 jobs were added to private-sector payrolls in July, which was well below the Briefing.com consensus of 650,000. The June increase was downwardly revised to 680,000 from 692,000.
The final reading for the July IHS Markit Services PMI checked in at 59.9, which was slightly higher from the preliminary reading of 59.8.
The weekly MBA Mortgage Applications Index decreased 1.7% following a 5.7% gain in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report and the Trade Balance for June on Thursday.

S&P 500 +17.2% YTD
Nasdaq Composite +14.7% YTD
Dow Jones Industrial Average +13.7% YTD
Russell 2000 +11.2% YTD

Crude futures settle below $69 per barrel
04-Aug-21 15:30 ET
Dow -271.81 at 34844.59, Nasdaq +21.51 at 14782.79, S&P -14.55 at 4408.60

[BRIEFING.COM] The S&P 500 is down 0.3% while the Russell 2000 lags with a 1.2% decline.

One last look at the sector performances shows energy (-2.9%), consumer staples (-1.1%), and industrials (-1.1%) down more than 1.0%, with energy down 3% amid weaker oil prices. The information technology (+0.3%) and communication services (+0.3%) sectors trade higher.

WTI crude futures settled sharply lower by 3.4%, or $2.41, to $68.16/bbl.