Mid-day: Midday Losses Paced by Dow Jones (not sponsored by Dow Jones, sadly)

The major averages trade in the red at midday with the Dow (-1.0%) continuing this week’s underperformance while the Nasdaq (-0.3%) trades ahead of the S&P 500 (-0.6%).

The first half of the midweek session has seen a pullback after yesterday’s rally with the S&P 500 finding support near its 200-day moving average (4474), which was reclaimed during yesterday’s advance.

President Biden is traveling to Europe today, planning to meet with NATO allies in the coming days. Meanwhile, German Chancellor Scholz said that while Germany plans to phase out the use of Russian oil, the change cannot be made immediately.

Crude oil is up $4.92, or 4.5%, at $114.19/bbl today, revisiting yesterday’s high. The continued resilience has vaulted the energy sector (+1.7%) to the top of today’s leaderboard while the materials sector (+0.1%) is the only other group trading in the green at midday. Nucor ( NUE 148.61, +4.61, +3.2%) is the best performer in the materials sector as it rises to a fresh record high.

On the downside, financials (-1.3%) and health care (-1.4%) are the only two sectors with losses of more than 1.0%. Credit names are among the laggards in the financials sector with Synchrony Financial ( SYF 36.61, -0.99, -2.7%) and Discover Financial ( DFS 111.66, -3.08, -2.7%) surrendering yesterday’s gains while manufacturers of medical devices are pressuring the health care sector with Resmed ( RMD 233.45, -21.60, -8.5%) falling past its 50-day moving average (241.25) to a three-week low.

Top-weighted technology (-0.4%) started today’s session at the bottom of the leaderboard, but it has been rising steadily since about 10:00 ET with help from Apple ( AAPL 171.46, +2.64, +1.6%). Adobe ( ADBE 423.56, -42.89, -9.2%) has been on the other end after beating Q1 EPS expectations and issuing below-consensus EPS and revenue guidance for Q2.

Chipmakers trade a bit behind the tech sector, as the PHLX Semiconductor Index surrenders 0.6%, masking relative strength in Intel ( INTC 48.69, +0.30, +0.6%). The stock has returned to its 50-day moving average (48.85) after NVIDIA ( NVDA 264.25, -0.99, -0.4%) CEO said that his company is open to using Intel’s foundry services to manufacture future chips.

Treasuries hold modest gains, though the 10-yr note hit a fresh low for the year before turning positive. It currently sits near its high, sending its yield lower by three basis points to 2.34%.

Reviewing today’s economic data:

  • New home sales decreased 2.0% month-over-month in February to a seasonally adjusted annual rate of 772,000 units (Briefing.com consensus 820,000) from a downwardly revised 788,000 (from 801,000) in January. On a year-over-year basis, new home sales were down 6.2%.
  • The key takeaway from the report is the recognition that the sale of lower-priced homes has lessened as a percentage of overall sales, likely due to less supply resulting from cost 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 weekly MBA Mortgage Index fell 8.1% after decreasing by 1.2% during the previous week. The Purchase Index fell 1.5% while the Refinance Index fell 14.4%.