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Stock Market Update from Briefing.com

3:35 pm: [BRIEFING.COM]

  • The dollar index is trading modestly higher, which is helping provide a little pressure on commodities in afternoon trading.
  • Silver and gold futures are trading near today's lows, while copper is back near the unchanged line.
  • Silver is currently down 1.3% in electronic trade at $15.21/oz, after closing -1.2% at $15.21/oz. Dec gold finished the session -0.3% at $1112.60/oz
  • WTI crude oil is holding above $42/barrel, but just now fell back into the red in electronic trade
  • Sept crude oil closed pit trading +0.5% at $42.47/barrel
  • up about 0.3% now, while natural gas is up 0.6% at $2.80/MMBtu. R

2:55 pm: [BRIEFING.COM] The S&P 500 trades higher by 0.3% with one hour remaining in the session. Given its current level, the benchmark index is on track to end the week higher by 0.6%.

Nine sectors hold gains going into the final hour while the energy space (-0.4%) remains in the red after surrendering its early lead. On a related note, crude oil slid from its session high just ahead of the pit close, narrowing its gain to 0.5% at $42.47/bbl. The energy component has continued its retreat in electronic trading, trimming its advance to 0.1% at $42.29/bbl.

For the week, crude oil lost 3.6% while the energy sector is on track to end the week higher by 3.1%.

2:25 pm: [BRIEFING.COM] Equity indices hover near their session highs as the quiet afternoon continues. The Dow Jones Industrial Average (+0.3%) leads while S&P 500 (+0.2%) follows not far behind.

All in all, today's affair has been very subdued, evidenced by the below-average trading volume. To that point, only 355 million shares have changed hands at the NYSE floor with 90 minutes remaining in the trading day.

Elsewhere, Treasuries have spent some time on each side of their flat lines, but the 10-yr yield has returned to unchanged at 2.19%.

1:55 pm: [BRIEFING.COM] The major averages continue holding slim gains.

A historic number of vehicles assembled boost the industrial production data.

Industrial production increased 0.6% in July after increasing a downwardly revised 0.1% (from 0.2%) in June. The Briefing.com Consensus expected industrial production to increase 0.3%.

That was the largest increase in industrial production since a 0.9% gain in November 2014.

Manufacturing production increased 0.8% in July after declining 0.3% in June. That was the largest increase in manufacturing production since a 0.9% gain in November 2014.

Nearly the entire increase in industrial production was the result of historic gains in the auto industry. Excluding autos, total industrial production was flat in July and manufacturing production increased only 0.1%.

Motor vehicle assemblies increased to 13.61 mln SAAR in July from 11.81 mln SAAR in June. To put that number in perspective, July assemblies were the most since 13.89 mln SAAR were assembled in November 1978, and assemblies have only exceeded the July level twice since data started being collected in January 1967. The level of July assemblies also explain the large increase in the Chicago PMI Production Index, which rose to 61.8 from 49.8 in June.

1:35 pm: [BRIEFING.COM] The major U.S. indices continue to tick higher following this morning's mixed action.

A look inside the Dow Jones Industrial Average shows DuPont (DD 53.82, +0.79), Caterpillar (CAT 78.56, +0.80), and General Electric (GE 26.05, +0.26) are outperforming. DuPont this morning was upgraded to overweight at JP Morgan, while Caterpillar is enjoying gains along its peers in the industrial space, the best performing sector in today's action. GE last night announced it would sell its U.S. online deposit platform, including ~$16 bln of deposits, to Goldman Sachs (GS 201.74, +1.00). The company said it was a key step in its plan for GE Capital to exit the U.S. banking system and become less systemically important. Also providing a lift for shares, there was a Reuters report earlier that suggested the EU was likely to approve GE's acquisition of Alstom's power unit.

Conversely, Procter & Gamble (PG 75.54, -0.24) is the worst-performing Dow component.

As we near the end of the session, the DJIA is up 0.54% this week, but still down -1.25% in August.

12:55 pm: [BRIEFING.COM] Equity indices are little changed at midday with the Dow (+0.1%) and S&P 500 (+0.1%) holding slim gains while the Nasdaq Composite (-0.2%) underperforms.

The first half of the Friday session has been very quiet with the S&P 500 bouncing inside an eight-point range. Heavily-weighted industrials (+0.4%) and financials (+0.3%) have shown relative strength since the early going while the remaining groups have alternated between gains and losses. That being said, the top-weighted technology sector (+0.2%) trades just ahead of the broader market, which could become a supportive factor for the market if the sector builds on its gain.

Despite the modest gain in technology, high-beta chipmakers underperform with the PHLX Semiconductor Index trading lower by 1.1%. That weakness combined with losses in the biotech industry group has kept the Nasdaq Composite (-0.2%) behind the broader market. As for biotechnology, the iShares Nasdaq Biotechnology ETF (IBB 360.98, -5.41) trades lower by 1.5% while the broader health care sector (-0.2%) holds a slimmer loss.

Elsewhere, the industrial sector (+0.4%) has received a boost from transport stocks, evidenced by a 0.5% gain in the Dow Jones Transportation Average. Norfolk Southern (NSC 82.07, +1.05) is the top index performer, trading higher by 1.3% while the DJTA is on track to end the week higher by 0.7% versus a 0.3% gain for the S&P 500.

On the downside, the energy sector (-0.2%) has slipped to the bottom of the leaderboard despite opening in the lead. Crude oil, meanwhile, trades higher by 0.7% at $42.50/bbl after testing the $42.90/bbl level earlier. Even with the current downtick, the energy sector is on course to end the week higher by 3.3%.

Treasuries held gains during overnight action, but slid to lows after a hotter-than-expected PPI report for July. The move into the red was short-lived as the 10-yr note is back in positive territory with its yield down one basis point at 2.18%.

Economic data included PPI, Industrial Production, and the Michigan Sentiment Index:

  • Producer prices increased 0.2% in July after increasing 0.4% in June while the Briefing.com consensus expected an increase of 0.1%
    • Energy prices, which provided the bulk of the gain in June, fell 0.6% in July. Gasoline prices increased 1.5%, but that was offset by big declines in the prices of home heating oil (-9.5%), liquefied petroleum (-4.3%), diesel fuel (-2.6%), and residential natural gas (-2.4%)
    • Food prices fell 0.1% in July after increasing 0.6% in June
    • Excluding food and energy, core prices increased 0.3% for a second consecutive month in July while the consensus expected an increase of 0.1%
      • The entire increase in core prices resulted from a 0.4% increase in services prices
  • Industrial production increased 0.6% in July after increasing a downwardly revised 0.1%...

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