The major averages registered their second consecutive retreat on Wednesday with the S&P 500 shedding 0.2% while the Nasdaq Composite (-0.1%) ended just ahead.
Overall, the midweek session was a choppy affair that saw the benchmark index spend some time on both sides of its flat line. That trading dynamic resulted from mixed performance among the ten sectors as three top-weighted groups—technology (+0.2%), financials (+0.1%), and health care (-0.1%)—displayed flashes of intraday strength while most of the remaining sectors struggled.
Most notably, commodity-sensitive energy (-1.4%) and materials (-2.1%) finished at the bottom of the leaderboard while the industrial sector (-0.7%) also kept the market under pressure. Altogether, the three sectors responded negatively to last night's release of China's preliminary September Caixin Manufacturing PMI, which fell to a 6.5-year low of 47.0 from 47.3 (expected 47.5).
It is worth pointing out that the energy sector was also pressured by crude oil, which climbed in the morning, but reversed from its best level in a move that coincided with equities retreating from their morning highs. WTI crude continued its retreat into the afternoon, ending the pit session lower by 3.8% at $44.53/bbl.
On the upside, the top-weighted technology sector (+0.2%) settled in the lead thanks to gains among large cap names like Apple (AAPL 114.32, +0.92), Google (GOOGL 653.29, +0.09), Intel (INTC 28.74, +0.07), and Microsoft (MSFT 43.87, -0.03). However, high-beta chipmakers did not fare as well as Intel, evidenced by a 0.7% decline in the PHLX Semiconductor Index.
Elsewhere, financials (+0.1%) and health care (-0.1%) displayed intraday strength, but the health care sector could not stay in the green into the close as renewed weakness in biotechnology took a toll on the countercyclical sector. The iShares Nasdaq Biotechnology ETF (IBB 332.82, -2.58) surrendered 0.8%, extending this week's decline to 6.7%.
Today's choppy action in the stock market had little impact on Treasuries as the 10-yr note spent the day in the red, pushing its yield up two basis points to 2.15%.
Investor participation was on the light side with fewer than 800 million shares changing hands at the NYSE floor.
Economic data was limited to the weekly MBA Mortgage Index, which surged 13.9% to follow last week's 7.0% decrease.
Tomorrow, weekly Initial Claims (Briefing.com consensus 271K), August Durable Orders (expected -2.0%) will be reported at 8:30 ET while August New Home Sales (expected 515,000) will be announced at 10:00 ET.
Nasdaq Composite +0.4% YTD
Russell 2000 -5.3% YTD
S&P 500 -5.8% YTD
Dow Jones Industrial Average -8.7% YTD
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