Dow Jones Falls As Fed Meeting Starts; Elon Musk To Make Twitter Move; Apple Up Amid MLS Deal
Meanwhile a trio of stocks is eyeing entries. HealthEquity (HQY) tested a buy point while Quanta Services (PWR) and Ramaco Resources (METC) are building bullish bases.
Volume was lower on both the Nasdaq and the New York Stock Exchange according to preliminary data.
Meanwhile, the yield on the benchmark 10-year Treasury note rose 10 basis points to 3.47%. West Texas Intermediate crude surrendered early gains and slid more than 2% to trade at just over $ 118 per barrel.
Yields were rising after the latest producer price index data was unveiled by the Labor Department. It showed that producer prices rose 0.8% in May after moving up 0.5% in April, meeting Econoday estimates. Producer inflation jumped 10.8% year-over-year, slightly lower than the 11% estimate.
It comes as the Federal Reserve kicks off its latest two-day policy meeting Tuesday. The odds of a three-quarter-point hike in the fed funds rate have increased this week due to recent inflation data.
Nasdaq Loses Gains As Stock Market Splits
The Nasdaq fared best out of the major indexes. It rallied late to close up 0.2%. Pinduoduo (PDD) fared best with a gain of 12%.
The S&P 500 closed off lows as it shed 0.4%. Pool (POOL) was a major laggard as it fell 5.2%.
The S&P 500 sectors were mostly negative. Only technology and energy made progress. Consumer staples and health care fared worst.
Small caps were bitten by the bears, with the Russell 2000 falling 0.4%.
Growth stocks were managing to feed off the bears, though. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, ended the session up 0.8%.
Dow Jones Today: Apple Stock Gains Amid MLS Deal
The Dow Jones Industrial Average was lagging the other major indexes. It shed about 150 points, or 0.5%.
Apple stock was one of the components making the best progress, though its gain was slight. It ended the day up 0.7%.
It comes after the firm announced a 10-year deal with Major League Soccer to broadcast matches on its streaming service. It is another move into sports, after the firm began streaming Major League Baseball games this year.
JPMorgan also reiterated Apple stock as overweight, with the firm saying it is bullish on the prospects for Apple TV +. The bank expects it to generate around $ 4.8 billion of revenue by 2025.
Elon Musk To Hold Twitter Meeting
TWTR stock edged higher Tuesday. It comes after it emerged that Tesla CEO Elon Musk, who is trying to buy the social media firm, is to hold a meeting with Twitter employees on Thursday.
The eccentric executive will answer pre-submitted employee questions at a virtual meeting on Thursday, according to CNN.
Uncertainty surrounds Musk’s mooted $ 44 billion takeover of the company.
The Tesla chief has said the deal is “on hold” as he waits to learn about the number of bots and fake accounts on the social media platform.
Twitter stock ended the day well off highs but still rose 0.5%. It remains rooted below its major moving averages.
Tesla stock also surrendered some gains but still closed up 2.4%. The former Leaderboard stock now sits well adrift of its 50-day moving average.
TSLA also remains rooted far below its current consolidation entry of 1,208.10, MarketSmith analysis shows.
Market Awaits Big Fed Rate Hike As Yields Keep Soaring
Outside The Dow Jones: 3 Stocks Eye Entries
HealthEquity has moved into its buy range above a cup with a narrow handle with an early entry at 66.23. However, the handle, while holding the spirit of a final pullback within the base, does not meet the 5-day minimum in terms of length. So, 72.80 may serve as the ideal buy point, or 10 cents above the new cup’s left-side peak.
Shares are pulling away from their 50-day line. While overall performance is good, earnings are not ideal. It currently holds an EPS Rating of 60 out of 99.
The health savings accounts firm has posted declining EPS for the past several quarters, but a rebound is expected in fiscal 2024, which ends in January that year. Wall Street sees earnings climbing 31% to $ 1.68 a share.
A couple of stocks are also worth adding to one’s watchlist after building bullish new patterns.
Quanta Services has crafted a cup-with-handle base with a 138.56 buy point. Shares found support at the 50-day line amid broader weakness.
The relative strength line has hit new highs, an encouraging sign. The firm boasts three consecutive quarters of accelerating EPS and sales growth. Its encouraging action won it a spot on the Leaderboard Watchlist on Tuesday.
Energy continues to be a hot area and coal stock Ramaco Resources formed a cup base with a potential buy point of 21.10.
Shares reclaimed their 50-day line last week for the first time since April. The coal industry group currently sits at the summit of the 197 IBD industry groups in terms of six-month relative performance.
Analysts see full-year profit exploding by 559% in 2022 to $ 5.93 per share. Big Money has been snapping up the stock in recent weeks, according to MarketSmith data.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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