Sector Investing

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Market Snapshot

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

Dow 34584.88 -166.44 (-0.48%)
Nasdaq 15043.96 -137.96 (-0.91%)
SP 500 4432.99 -40.76 (-0.91%)
10-yr Note -26/32 1.376
NYSE Adv 1148 Dec 2016 Vol 3.3 bln
Nasdaq Adv 2141 Dec 1946 Vol 6.5 bln

Industry Watch
Strong: Health Care
Weak: Information Technology, Materials, Utilities, Communication Services, Industrials

Moving the Market

-- Downside momentum, risk aversion, cash-raising efforts

-- Negative-sounding headlines

-- S&P 500 closes below 50-day moving average (4436)

-- Consumer sentiment report for August misses expectations by a small margin

-- Weakness in semiconductor space amid analyst downgrades

S&P 500 closes below key technical level
17-Sep-21 16:20 ET
Dow -166.44 at 34584.88, Nasdaq -137.96 at 15043.96, S&P -40.76 at 4432.99

[BRIEFING.COM] The S&P 500 fell 0.9% on Friday, as investors digested some negative-sounding headlines and hedged for further weakness. The Nasdaq Composite declined 0.9%, and the Dow Jones Industrial Average declined 0.5%. The Russell 2000, however, increased 0.2% amid the quadruple witching-options expiration activity into the close.

Ten of the 11 S&P 500 sectors closed lower, with the materials (-2.1%), information technology (-1.5%), utilities (-1.6%), communication services (-1.3%), and industrials (-1.1%) sectors losing more than 1.0%. The health care sector (+0.1%) was saved by Thermo Fisher (TMO 596.80, +36.36, +6.5%), which provided upbeat FY22 EPS guidance.

Risk sentiment seemed to be partially influenced by news that President Biden was unable to get Senator Manchin (D-WV) on board with the $3.5 trillion infrastructure plan, a warning from the White House that not increasing the debt limit could cause a recession, and the FDA advisory committee voting against Pfizer's (PFE 43.88, -0.59, -1.3%) COVID-19 booster vaccine for people 16 and older.

While none of the news was viewed as surprising, they presumably reminded investors about some of the growth-oriented headwinds the market is facing. The S&P 500 breached support at its 50-day moving average (4436) on a closing basis.

The tech sector weighed on the market amid weakness in its top-weighted components and the semiconductor stocks. BofA Securities downgraded both Cree (CREE 85.70, -2.60, -2.9%) and Cirrus Logic (CRUS 84.73, -3.45, -3.9%) to Underperform from Neutral. The Philadelphia Semiconductor Index declined 1.5%.

Separately, the consumer sentiment report showed a smaller-than-expected gain following last month's shocking decline. The preliminary September reading for the University of Michigan Index of Consumer Sentiment increased to 71.0 (Briefing.com consensus 72.0) from 70.3 in August.

The negative backdrop seemed to provoke some cash-raising efforts. The U.S. Dollar Index rose 0.3% to 93.21 while the 10-yr yield increased four basis points to 1.37% amid increased selling interest. The CBOE Volatility Index (20.81, +2.12, +11.3%) closed above the 20.00 level.

The 2-yr yield was unchanged at 0.23%. WTI crude futures decreased 1.0%, or $0.70, to $71.92/bbl.

Reviewing Friday's economic data:

The preliminary September reading for the University of Michigan Index of Consumer Sentiment increased to 71.0 (Briefing.com consensus 72.0) from the final reading of 70.3 for August.
The key takeaway from the report is the recognition that high prices have led to a decline in assessments of buying conditions for homes, vehicles, and household durables. That could lead to slower spending activity in the future if consumers hold off on purchases either because they think prices will come down if they wait longer or if they resist paying persistently high prices altogether in the absence of offsetting income gains.

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

S&P 500 +18.0% YTD
Nasdaq Composite +16.7% YTD
Dow Jones Industrial Average +16.0% YTD
Russell 2000 +13.3% YTD

Crude futures settle lower by 1%
17-Sep-21 15:30 ET
Dow -177.69 at 34573.63, Nasdaq -156.84 at 15025.08, S&P -40.22 at 4433.53

[BRIEFING.COM] The S&P 500 is down 0.9% while the Russell 2000 trades lower by 0.4%.

One last look at the sector standings shows losses across the board. The materials sector (-2.0%) is the weakest link with a 2% decline while the health care sector (-0.2%) outperforms on a relative basis with a 0.2% decline.

WTI crude futures settled lower by 1.0%, or $0.70, to $71.92/bbl.