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Market Snapshot

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

Dow 35405.24 +273.38 (0.78%)
Nasdaq 14346.00 +106.12 (0.75%)
SP 500 4546.54 +30.99 (0.69%)
10-yr Note -3/32 1.815
NYSE Adv 2403 Dec 878 Vol 1.0 bln
Nasdaq Adv 3366 Dec 1192 Vol 4.5 bln

Industry Watch
Strong: Energy, Materials, Financials, Industrials
Weak: Utilities, Real Estate, Consumer Staples

Moving the Market

-- Another strong finish into the close, as market awakens from consolidation activity

-- UPS (UPS) and Exxon Mobil (XOM) rise on pleasing earnings news

-- ISM Manufacturing Index decelerates in January while Prices component increases

Rebound rally extends into February
01-Feb-22 16:15 ET
Dow +273.38 at 35405.24, Nasdaq +106.12 at 14346.00, S&P +30.99 at 4546.54

[BRIEFING.COM] The S&P 500 gained 0.7% on Tuesday, extending its rebound rally into February amid another strong finish into the close. The Nasdaq Composite (+0.8%) and Dow Jones Industrial Average (+0.8%) kept pace with the benchmark index, while the Russell 2000 rose 1.1%.

There was a cyclical tilt to the session, evident by the leadership positions in the S&P 500 energy (+3.5%), materials (+1.7%), financials (+1.4%), and industrials (+1.4%) sectors. Conversely, the defensive-oriented utilities (-1.3%), real estate (-0.7%), and consumer staples (-0.1%) sectors closed lower.

For most of the session, the market operated in consolidation mode as investors digested better-than-expected earnings reports from Exxon Mobil (XOM 80.83, +4.87, +6.4%) and UPS (UPS 230.69, +28.48, +14.1%). Alphabet (GOOG 2757.57, +43.60, +1.6%) held firm in front of its earnings report after the close.

In addition, the ISM Manufacturing Index for January was another report in the mix. The headline index decelerated to 57.6% (Briefing.com consensus 57.5%) from 58.8% in December amid persistent Omicron-related disruptions while the Prices component of the report increased to 76.1% from 68.2%.

Stocks briefly dipped to session lows in the wake of the ISM report while Treasury yields pushed to session highs, presumably because the pricing pressures supported the Fed's case to be more aggressive in tightening policy. Evidently, the market stomached any hawkish interpretations today.

First-of-the-month inflows might have played a supportive role, but more encouragingly, investors may have liked that the market staved off the temptation to sell into the recent strength. Buying interest really accelerated in the last hour of action on no specific news, resembling a fear of getting left behind in the rebound rally.

Treasury yields ended the session mostly lower, although the 2-yr yield settled unchanged at 1.16%. The 10-yr yield increased two basis points to 1.80%. The U.S. Dollar Index decreased 0.3% to 96.29. WTI crude futures edged higher by 0.1%, or $0.05, to $88.21/bbl.

Separately, AT&T (T 24.42, -1.08, -4.2%) was excluded from the advance with a 4% decline after providing disappointing dividend details surrounding its WarnerMedia spinoff. The company announced a dividend of $1.11 per share, putting it on the low end of the payout range previously forecasted.

Reviewing Tuesday's economic data:

The January ISM Manufacturing Index dipped to 57.6% (Briefing.com consensus 57.5%) from an upwardly revised 58.8% (from 58.7%) in December. A number above 50.0% is indicative of expansion. January marked the 20th straight month of expansion for the manufacturing sector, albeit at the slowest pace since September 2020 as the effects of the Omicron variant impacted production.
The key takeaway from the report is the understanding that pricing pressures worsened in January as supply chain problems persisted. This understanding will contribute to investors' angst about the Fed pivoting to a more hawkish mindset as it works to tamp down inflation pressures.
Total construction spending increased 0.2% month-over-month in December (Briefing.com consensus +0.6%) following an upwardly revised 0.6% increase (from 0.4%) in November. That was the slowest pace of increase since July 2021. Total private construction increased 0.7% month-over-month while total public construction spending decreased 1.6%. On a year-over-year basis, total construction spending was up 9.0%.
The key takeaway from the report is the strength seen in new single-family construction, which is a reflection of the ongoing demand for new homes amid a scarcity of supply in the existing home market.
Job openings increased to 10.925 million in December from a revised 10.775 million (from 10.562 million) in November.
The final IHS Markit Manufacturing PMI for January decreased to 55.5 from 57.7 in the preliminary reading.

Looking ahead, investors will receive the ADP Employment Change report for January and the weekly MBA Mortgage Applications Index on Wednesday.

Dow Jones Industrial Average -2.6% YTD
S&P 500 -4.6% YTD
Nasdaq Composite -8.3% YTD
Russell 2000 -8.7% YTD

Crude futures settle fractionally higher
01-Feb-22 15:30 ET
Dow +210.38 at 35342.24, Nasdaq +49.95 at 14289.83, S&P +21.48 at 4537.03

[BRIEFING.COM] The S&P 500 is up 0.5% to trade at session highs. The market has seen a modest up on no specific news.

One last look at the sector rankings shows energy (+3.5%), materials (+1.7%), financials (+1.4%), and industrials (+1.3%) outperforming with decent gains, while the utilities (-1.1%), real estate (-0.4%), and information technology (-0.2%) sectors underperform with modest declines.

WTI crude futures settled higher by 0.1%, or $0.05, to $88.21/bbl.