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Market Snapshot

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

Dow 34451.23 -113.36 (-0.33%)
Nasdaq 13351.07 -292.51 (-2.14%)
SP 500 4392.58 -54.01 (-1.21%)
10-yr Note -11/32 2.830
NYSE Adv 1159 Dec 2042 Vol 919.8 mln
Nasdaq Adv 1517 Dec 3003 Vol 4.5 bln

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

Moving the Market

-- Treasury yields bounce back, undercut growth stocks, amid retail sales, unemployment, inflation data

-- S&P 500 closes below 50-day moving average (4418)

-- Mixed earnings reactions

Stocks slump into extended weekend
14-Apr-22 16:15 ET
Dow -113.36 at 34451.23, Nasdaq -292.51 at 13351.07, S&P -54.01 at 4392.58

[BRIEFING.COM] The S&P 500 fell 1.2% on Thursday, slumping into the long weekend as a sharp rebound in Treasury yields weighed heavily on the growth stocks. The Nasdaq Composite underperformed with a 2.1% decline, the Russell 2000 declined 1.0%, and the Dow Jones Industrial Average declined 0.3%.

Influential losses came from the information technology (-2.5%), communication services (-1.8%), and consumer discretionary (-1.6%) sectors, which dragged the S&P 500 below its 50-day moving average (4418) in a steady decline. The energy sector (+0.4%) showed relative strength.

While corporate news captured investors' attention today, the real market driver was the Treasury market in response to the latest economic data. Retail sales, excluding autos, topped expectations with a 1.1% m/m increase in March (Briefing.com consensus 0.9%), weekly jobless claims held near historically low levels, and import/export data for March remained elevated.

The growth/inflation-sensitive 10-yr yield jumped 14 basis points to 2.83% while the fed-funds-sensitive 2-yr yield jumped 11 basis points to 2.45%. The U.S. Dollar Index rose 0.5% to 100.34. Crude futures settled close to $107.00 per barrel ($106.94, +2.69, +2.7%).

The upwards pressure in long-term rates fueled valuation concerns in the mega-cap domain, but to be fair, selling was relatively broad-based. The Vanguard Mega Cap Growth ETF (MGK 220.13, -4.91) fell 2.2%, versus a 0.7% decline for the Invesco S&P 500 Equal Weight ETF (RSP 155.53, -1.07).

Interestingly, the curve-steepening bias in the Treasury market provided little relief for the financials sector, which featured weakness in Wells Fargo (WFC 46.35, -2.19, -4.5%) following its revenue miss.

Fellow banks Morgan Stanley (MS 84.79, +0.66, +0.8%), Goldman Sachs (GS 321.64, -0.33, -0.1%), and Citigroup (C 50.93, +0.79, +1.6%) beat top and bottom-line estimates, as did Dow component UnitedHealth (UNH 534.82, -2.18, -0.4). Earnings reactions were mixed.

Twitter (TWTR 45.08, -0.77, -1.7%), meanwhile, was the most widely-discussed stock today after Elon Musk offered to acquire the company for $54.20 per share in cash. The market, however, didn't believe Twitter would accept the deal, evidenced by the 2% decline in TWTR shares.

Reviewing Thursday's economic data:

Total retail sales increased 0.5% month-over-month in March (Briefing.com consensus 0.6%) following an upwardly revised 0.8% increase (from 0.3%) in February. Excluding autos, retail sales jumped 1.1% (Briefing.com consensus 0.9%) following an upwardly revised 0.6% increase (from 0.2%) in February.
The key takeaway from the report is that retail sales were down in March (-0.3%) excluding gasoline station sales, which suggests high prices at the pump and elsewhere detracted from spending on other goods.
Initial jobless claims increased by 18,000 to 185,000 (Briefing.com consensus 175,000) for the week ending April 9. Continuing jobless claims for the week ending April 2 were down by 48,000 to 1.475 million.
The key takeaway from the report is that jobless claims are still running near historically low levels at a time of historically high job openings, which fits the script of a tight labor market that should keep upward pressure on wages.
The preliminary University of Michigan Index of Consumer Sentiment for April jumped to 65.7 (Briefing.com consensus 58.8) from the final reading of 59.4 for March. It was a nice improvement, although the April reading is still one of the lowest readings over the last 10 years.
The key takeaway from the report is that the improvement was driven almost entirely by the Expectations Index, which jumped on improved wage expectations and a belief that gas price increases will moderate substantially in the year ahead.
Import prices rose 2.6% in March after increasing 1.6% in February. Excluding oil, import prices rose 1.2% after increasing 0.7% in February. Export prices rose 4.5% after increasing 3.0% in February. Excluding agriculture, export prices also rose 4.5% after increasing 3.0% in February.
Business inventories increased 1.5% m/m in February (Briefing.com consensus 1.3%) following a revised 1.3% increase (from -0.2%) in January.

Looking ahead, investors will receive the NAHB Housing Market Index for April when the market reopens for trading on Monday.

Dow Jones Industrial Average -5.2% YTD
S&P 500 -7.8% YTD
Russell 2000 -10.7% YTD
Nasdaq Composite -14.7% YTD

Crude futures top $106 per barrel
14-Apr-22 15:30 ET
Dow -9.70 at 34554.89, Nasdaq -251.44 at 13392.14, S&P -39.12 at 4407.47

[BRIEFING.COM] The S&P 500 is down 0.9% to trade near session lows. The benchmark index is on track to end the week with a 1.9% decline.

One last look at the sectors shows information technology (-2.1%), communication services (-1.7%), and consumer discretionary (-1.3%) sectors down between 1-2% amid the rise in long-term rates, while the energy (+0.8%) and utilities (+0.3%) sectors show relative strength.

WTI crude futures settled higher by $2.69 (+2.6%) to $106.94/barrel.