The S&P 500 started the day with a 0.9% gain, then fell 0.7% into negative territory, and now trades lower by 0.2% in midday action. The Dow Jones Industrial Average (unch), Nasdaq Composite (-0.4%), and Russell 2000 (+0.2%) trade mixed, with the Nasdaq underperforming.
The positive start was attributed to mechanical factors after the S&P 500 closed in correction territory yesterday, as opposed to positive news on the Russia-Ukraine front. The latter has not gotten any better with Ukraine declaring a state of emergency, the U.S. canceling diplomatic meetings with Russia, and the Biden administration warning of a full-scale Russian invasion within 48 hours, according to Newsweek .
There is still, however, a mechanical flow to the session. The S&P 500 has held above yesterday’s low (4267.11), and five of its 11 sectors are now trading higher. The energy (+1.6%) and health care (+0.6%) sectors are the clear winners, while the consumer discretionary (-1.1%) and utilities (-0.8%) sectors lag.
The consumer discretionary sector is seeing weakness in Amazon.com ( AMZN 2967.80, -36.15, -1.2%) and Tesla ( TSLA 793.48, -28.96, -3.5%). Lowe’s ( LOW 221.21, +6.62, +3.1%) has stood out following its better-than-expected earnings report and upbeat guidance.
The other mega-caps are showing modest losses, but as a whole, they’re exerting pressure on the market. The Vanguard Mega Cap Growth ETF ( MGK 219.20, -1.19) is down 0.5%, versus a 0.1% decline in the Invesco S&P 500 Equal Weight ETF ( RSP 151.92, -0.10).
Looking at other earnings movers, Palo Alto Networks ( PANW 493.80, +6.71, +3.1%), Caesars Entertainment ( CZR 81.87, +5.30, +7.0%), and Mosaic ( MOS 45.58, +1.39, +3.2%) are trading higher in response, while TJX Cos. ( TJX 62.78, -2.45, -3.8%) struggles on underwhelming results and guidance.
Elsewhere, Treasury yields continue to edge higher on expectations for the Fed to be more aggressive in removing accommodation because of persistent inflation pressures. The 2-yr yield is up three basis points to 1.58%. The 10-yr yield is up two basis points to 1.97%.
Today’s economic data was limited to the weekly MBA Mortgage Applications Index, which dropped 13.1% following a 5.4% decline in the prior week.