Mid-day: Stocks near session highs in volatile session

Each of the large-cap indices are up more than 1.0% in a volatile session in which each index saw modest declines in the morning. The S&P 500 is up 1.4%, the Nasdaq Composite is up 1.3%, and the Dow Jones Industrial Average is up 1.2%.

Ten of the 11 S&P 500 sectors are trading higher with gains ranging from 0.6% (health care) to 2.5% (information technology). The communication services sector (-1.2%) is the odd sector out with a 1% decline.

Earnings reports released since yesterday’s close were mostly better than expected, but it looks like overall price action is being influenced more by the market being in an oversold condition rather than the reports. That’s because the market traded lower despite the news and earnings reactions have been mixed.

Microsoft ( MSFT 288.86, +18.56, +6.9%), Alphabet ( GOOG 2338.33, -51.79, -2.2%), Visa ( V 217.61, +16.53, +8.2%), Boeing ( BA 155.83, -11.17, -7.7%), T-Mobile US ( TMUS 130.96, +6.00, +4.8%), and Texas Instruments ( TXN 169.91, +1.50, +0.9%), for example, are heading in different directions following their earnings reports.

Boeing, though, was a genuine disappointment, missing top and bottom-line estimates. The company blamed supply chain issues, COVID-19, and inflation, which are things the market has feared could impede economic growth.

Growth concerns are being put aside for the moment amid the recovery attempt in the stock market. As mentioned, the oversold condition of the market is presumably playing a strong factor today with some help from earnings. The Vanguard Mega Cap Growth ETF ( MGK 209.60, +2.94, +1.9%), which set a 52-week low today, is now up 2%.

Another supportive factor is the relative calmness in the Treasury market. The 2-yr yield is down one basis point to 2.54%, and the 10-yr yield is up two basis points to 2.79%. The U.S. Dollar Index is up 0.6% to 102.89.

Reviewing today’s economic data:

  • The Advance report for International Trade in Goods for March showed a deficit of $125.3 billion, versus a revised $106.4 billion (from $106.6 billion) in February. The Advance report for Retail Inventories for March rose 2.0%, and the Advance report for Wholesale Inventories for March rose 2.3%.
  • Pending home sales decreased 1.2% m/m in March (Briefing.com consensus -1.5%) following a revised 4.0% decline (from -4.1%) in February.
  • The weekly MBA Mortgage Applications Index fell 8.3% following a 5.0% decline in the prior week.