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Market Snapshot

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

Dow 33240.18 -809.28 (-2.38%)
Nasdaq 12490.74 -514.11 (-3.95%)
SP 500 4175.19 -120.92 (-2.81%)
10-yr Note +9/32 2.745
NYSE Adv 585 Dec 2610 Vol 997.0 mln
Nasdaq Adv 859 Dec 3380 Vol 5.0 bln

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

Moving the Market

-- Mega-caps lead market sharply lower in front of earnings reports

-- Lingering growth concerns

-- Mixed reactions to better-than-expected Q1 earnings results

Trepidation sweeps market
26-Apr-22 16:15 ET
Dow -809.28 at 33240.18, Nasdaq -514.11 at 12490.74, S&P -120.92 at 4175.19

[BRIEFING.COM] The S&P 500 fell 2.8% on Tuesday in a relatively broad-based decline led by the growth stocks. The Dow Jones Industrial Average (-4.0%) and Russell 2000 (-3.2%) both underperformed while the Dow Jones Industrial Average fell 2.4%.

The mega-caps were some of the more influential laggards amid trepidation surrounding their earnings reports this week, starting with Microsoft (MSFT 270.22, -10.50, -3.7%) and Alphabet (GOOG 2390.12, -74.88, -3.0%) after the close. The Vanguard Mega-Cap Growth ETF (MGK 205.66, -8.65, -4.0%) fell 4.0%.

Losses broadened out as the day progressed, though, leaving ten of the 11 S&P 500 sectors in negative territory and the taking the S&P 500 below yesterday's intraday low (4200.82) by the close. Investors braced for further downside, evident in the 24% pop in the CBOE Volatility Index (33.52, +6.50, +24.1%).

The consumer discretionary (-5.0%), information technology (-3.7%), and communication services (-3.2%) sectors posted the steepest declines. The former included a 12% drop in Tesla (TSLA 876.42, -121.60, -12.2%) attributed in part to concerns surrounding Elon Musk's ownership of Twitter (TWTR 49.68, -2.02, -3.9%).

The energy sector (+0.04%) was the only sector in the S&P 500 that closed higher, although it couldn't keep pace with the increase in oil prices ($101.42, +2.79, +2.8%), which reclaimed $100 per barrel.

The latest earnings reports continued to have little effect on the market despite the results being mostly better than expected, including those from 3M (MMM 144.22, -4.38, -3.0%), General Electric (GE 80.59, -9.29, -10.3%), UPS (UPS 183.05, -6.59, -3.5%), PepsiCo (PEP 173.30, -0.44, -0.3%), and Sherwin-Williams (SHW 271.37, +23.35, +9.4%).

The mixed reactions added to the uncertainty facing the mega-cap earnings. Growth concerns, meanwhile, persisted and were manifested by another sharp decline in Treasury yields. The 2-yr yield fell eight basis points to 2.55%, and the 10-yr field fell five basis points to 2.77%. The U.S. Dollar Index rose 0.6% to 102.34.

Growth concerns were exacerbated by the threat of lockdowns in Beijing and a warning from Russia's Foreign Minister Lavrov that there is a "considerable" chance of nuclear war if western nations continue to deliver weapons to Ukraine, according to Bloomberg.

Separately, the Senate officially confirmed Fed Governor Brainard as Vice Chair of the Fed.

Reviewing Tuesday's economic data:

Total durable goods orders increased 0.8% month-over-month in March (Briefing.com consensus +1.1%) following an upwardly revised 1.7% decline (from -2.2%) in February. Excluding transportation, durable goods orders increased 1.1% month-over-month (Briefing.com consensus +0.5%) following an upwardly revised 0.5% decline (from -0.6%) in February.
The key takeaway from the report is that it conveyed a nice rebound in order activity after a brief slump in February. Notably, new orders for nondefense capital goods, excluding aircraft -- a proxy for business spending -- jumped 1.0% following a 0.3% decline in February.
New home sales decreased 8.6% month-over-month in March to a seasonally adjusted annual rate of 763,000 units (Briefing.com consensus 770,000) from an upwardly revised 835,000 (from 772,000) in February. On a year-over-year basis, new home sales were down 12.6%.
The key takeaway from the report is that sales of lower-priced homes have lessened as a percentage of overall sales, likely due to less supply resulting from cost and supply chain pressures for builders, and emerging pressures from rising mortgage rates that are reducing affordability for lower-income buyers. That is leading to higher-priced homes accounting for a larger percentage of new homes sold, which is driving up both median and average selling prices.
The Conference Board's Consumer Confidence Index dipped to 107.3 in April (Briefing.com consensus 106.0) from an upwardly revised 107.6 (from 107.2) in March. In the same period a year ago, the index stood at 117.5.
The key takeaway from the report is that consumers' expectations did not worsen in spite of the inflation pressures and the war in Ukraine, although it was noted that purchasing intentions are down overall from recent levels.
The S&P Case-Shiller Home Price Index was up 20.2% year-over-year in February (Briefing.com consensus 18.9%) while the FHFA Housing Price Index increased 2.1% month-over-month in February.

Looking ahead, investors will receive Pending Home Sales for March, Advance Intl Trade in Goods, Retail Inventories, and Wholesale Inventories for March, and the weekly MBA Mortgage Applications Index on Wednesday.

Dow Jones Industrial Average -8.5% YTD
S&P 500 -12.4% YTD
Russell 2000 -15.8% YTD
Nasdaq Composite -20.2% YTD

Crude futures reclaim $100 per barrel
26-Apr-22 15:25 ET
Dow -688.32 at 33361.14, Nasdaq -441.17 at 12563.68, S&P -101.75 at 4194.36

[BRIEFING.COM] The S&P 500 is down 2.4% and has slipped below yesterday's intraday low (4200.82).

One last look at the sector standings shows consumer discretionary (-4.4%), information technology (-3.2%), and communication services (-2.6%) still leading the retreat, while the energy sector (+0.5%) remains the only sector trading higher.

WTI crude futures settled higher by $2.79 (+2.8%) to $101.42/barrel.