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Market Snapshot

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

Dow 34297.73 -66.77 (-0.19%)
Nasdaq 13539.30 -315.83 (-2.28%)
SP 500 4356.45 -53.68 (-1.22%)
10-yr Note +2/32 1.749
NYSE Adv 1337 Dec 1922 Vol 1.2 bln
Nasdaq Adv 1883 Dec 2419 Vol 4.9 bln

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

Moving the Market

-- Growth stocks pace decline in volatile session

-- Dow outperforms on a relative basis amid better-than-expected earnings reports from five components

-- Tentative trading activity in front of FOMC policy decision tomorrow

Growth stocks pace decline in volatile session
25-Jan-22 16:15 ET
Dow -66.77 at 34297.73, Nasdaq -315.83 at 13539.30, S&P -53.68 at 4356.45

[BRIEFING.COM] The S&P 500 fell 1.2% on Tuesday in another volatile session. The benchmark index was down as much as 2.8% in the morning, then briefly peaked above its flat line in the afternoon. Growth stocks paced today's decline and accounted for the underperformance of the Nasdaq Composite (-2.3%).

The Dow Jones Industrial Average (-0.2%) was unable to hold onto a late gain and closed slightly lower. The Russell 2000 fell 1.5%.

From a sector perspective, the information technology (-2.3%), communication services (-2.2%), and consumer discretionary (-1.8%) sectors underperformed with steep losses. Conversely, the energy (+4.0%) and financials (+0.5%) sectors were only sectors that closed higher amid higher oil prices ($85.37, +2.06, +2.5%) and Treasury yields. For emphasis, the energy sector rose 4%.

The early weakness was symptomatic of the recent tendency to sell into any indication of strength (yesterday's specifically), which raised concerns about Monday's comeback being a potential head fake.

Encouragingly, the major indices traded well above yesterday's lows, which was good for overall sentiment and may have signaled an underlying hope that Fed Chair Powell could sound less hawkish than feared following the FOMC's policy statement tomorrow.

As for the intraday rebound, there wasn't any specific news to account for the price action, although better-than-expected earnings reports did appear to be an influential driver in the Dow's relative outperformance despite an initially mixed response.

Dow components Johnson & Johnson (JNJ 167.63, +4.66, +2.9%), American Express (AXP 172.96, +14.03, +8.8%), IBM (IBM 136.10, +7.28, +5.7%), 3M (MMM 173.73, +0.93, +0.5%), and Verizon (VZ 52.90, -0.06, -0.1%) each topped EPS estimates, and VZ was the only one that didn't close higher. AXP stood out with a 9% gain, followed by IBM's 6% gain.

General Electric (GE 91.11, -5.80, -6.0%) disappointed shareholders with a revenue miss and downside FY22 EPS guidance, while Microsoft (MSFT 288.49, -7.88, -2.7%) investors leaned cautiously in front of its earnings report after the close.

Microsoft, like other growth stocks, also had to contend with upwards pressure in interest rates. The 10-yr Treasury note yield rose five basis points to 1.78% while the 2-yr yield rose five basis points to 1.02%. The U.S. Dollar Index increased 0.1% to 95.98.

Separately, NVIDIA (NVDA 223.24, -10.48) fell 4.5% amid a Bloomberg report indicating that the company is planning to scrap its $40 billion acquisition of Arm Holdings due to ongoing regulatory issues. The FTC said it's going to sue to block Lockheed Martin's (LMT 387.18, +13.85, +3.7%) $4.4 billion acquisition of Aerojet Rocketdyne (AJRD 36.65, -8.35, -18.6%).

Reviewing Tuesday's economic data:

The Conference Board's Consumer Confidence Index dropped to 113.8 (Briefing.com consensus 112.0) from a downwardly revised 115.2 (prior 115.8) in December. The dip came after three consecutive monthly increases but is still well above the 87.1 reading registered in the same period a year ago.
The key takeaway from the report is the moderation in the outlook, which points to some potential weakening economic activity in the short term.
The November FHFA Housing Price Index increased 1.1% m/m following a 1.1% increase in October, and the November S&P Case-Shiller Home Price Index increased 18.3% yr/yr following a revised 18.5% increase (from 18.4%) in October.

Looking ahead, investors will receive New Home Sales for December; Advance Intl. Trade in Goods, Retail Inventories, and Wholesale Inventories for December; and the weekly MBA Mortgage Applications Index on Wednesday. Of course, the FOMC Rate Decision will follow the data in the afternoon.

Dow Jones Industrial Average -5.6% YTD
S&P 500 -8.6% YTD
Russell 2000 -10.8% YTD
Nasdaq Composite -13.5% YTD

Energy stocks following oil prices higher
25-Jan-22 15:30 ET
Dow -26.39 at 34338.11, Nasdaq -236.00 at 13619.13, S&P -41.62 at 4368.51

[BRIEFING.COM] The S&P 500 is down 0.8% after peaking above its flat line earlier this hour.

One last look at the S&P 500 sectors shows information technology (-1.5%), communication services (-1.6%), and consumer discretionary (-1.5%) each down 1.5%, while the energy (+3.9%) and financials (+0.6%) sectors continue to trade higher amid an increase in oil prices and Treasury yields.

WTI crude futures settled higher by 2.8%, or $2.36, to $85.66/bbl.