Stocks rebounded from initial weakness and strengthened Wednesday as investors kept an eye out for looming federal deadlines in Washington. Dollar Tree recovered strongly after a strategic change. Netflix appeared in the acquisition of a video game. Chip stocks were mixed after Micron Technology’s fourth quarter fiscal report. Boeing easily beat the Dow Jones pace today, in an analyst update on the travel industry outlook.
The S&P 500 strengthened to a 0.5% advance in the stock market today, while the Dow Jones Industrial Average rose 0.4%. The Nasdaq Composite improved to a 0.7% gain, recovering a portion of Tuesday’s 2.8% decline as the market entered the final two days of September and the third quarter.
Discount retailer Dollar tree (DLTR) led the S&P 500 and Nasdaq 100, up 14%. The company announced Tuesday night that it plans to start raising prices above $ 1 at its chain of nearly 16,000 stores. Vaccine manufacturer Modern (MRNA) bounced 2.4% in its attempt to stem a three-day decline.
Netflix (NFLX) rose 4.3% after announcing Tuesday night that it would continue to display its presence in video games, and agreed to acquire Night School Studio, developer of the game title ‘Oxenfree’. The gain pushed Netflix shares back above an entry of 593.39 in 31 weeks. consolidation. The Netflix news carried over to other video game stocks, raising Electronic arts (SHE) more than 4%, and Activision Blizzard (ATVI) almost 3%.
Also, among small caps, bitcoin miner Greenidge Generation holdings (GREE) shot up almost 20%. B. Riley began hedging the stock with a buy rating and price target of 78, nearly 240% above where the stock ended Tuesday.
Dow Jones Today: Boeing Update, Salesforce Point of Purchase
Boeing (licensed in letters) outperformed the Dow Jones today, rising 4.2% as Bernstein improved stocks to outperform the market, and raised its price target from 252 to 279. Additionally, the note raised the ratings on much of the aerospace sector. As traffic increased, forecasts point to a “tipping point for global travel.”
Apple (AAPL) rallied 0.8%, after a 2.4% drop on Tuesday.
Salesforce.com (CRM) gave up its pre-market earnings and fell 0.1%. The big player of consumer relationship management software fell 4.6% on Tuesday, cutting below 284.60 buying points in what IBD MarketSmith analysis it is identified as a 55 week cup base. You can also read the graph as mug with handle pattern with a buy point at 275.32. That would put Salesforce shares 1% below entry.
Chips mixed after Micron Q4
Micron technology (MU) reduced its initial decline to a fraction. Chipmaker beat Wall Street revenue and profit targets for your fiscal fourth quarter, but the guidance for the first quarter was well below expectations. Also, oil producer EQT (EQT) fell 4.6% to the bottom of the S&P 500 as investors reacted to an offering of more than 25 million shares announced Tuesday night.
Despite Micron’s losses, several chip stocks were indicated higher, with IBD leaderboard stocks Nvidia (NVDA), Entegris (ENTG) and Marvell Technologies (MRVL) gaining ground. On the Dow Jones today, Intel (INTC) fell by 0.3%.
Additionally, the iShares Semiconductor ETF (SOXX) fell 0.1% in the first trades.
Federal closure, deadlines for infrastructure bills
A critical Thursday night deadline followed by a mid-October deadline for a potential US debt default has heightened the risks of the week’s political maneuvering in Washington. A vote Monday by Senate Republicans left Democrats responsible for taking a measure to fund the government and avoid federal shutdowns, which would begin Friday, if lawmakers don’t pass a budget.
Additionally, Democrats must now find a legal, one-party path to raise the debt ceiling, or face the risk of a first US debt default in mid-October. Treasury Secretary Yellen told the Senate Banking Committee that a US default without an increase in the debt limit is likely by October 18, giving a specific date for the first time.
On Sunday, House Speaker Nancy Pelosi set a vote for Thursday on a $ 1 trillion infrastructure bill, ending attempts to link that measure to a much larger social services spending effort. broader and bigger driven by progressive Democrats. That decoupling is positive for parts of the market tied to the $ 550 billion in new spending represented by the bipartisan infrastructure plan.
Meanwhile, Fed Chief Jerome Powell, testifying at the same Senate Banking hearing as Treasury Secretary Yellen, said inflation would remain higher than anticipated. Powell is scheduled to join a discussion with the European Central Bank Forum on Central Banking today starting at 11:45 am ET.
IBD 50: Sea Limited, AutoNation, Jefferies near buying zones
Among IBD 50 Shares, InMode (INMD) led in the first operations, with an increase of 4.7%, as it seeks to recover a part of the 12.8% settlement of Tuesday. Assert possession (AFRM) also sought to regain ground, increasing by 4.2% in commercial openness. Affirm’s 10.8% drop on Tuesday undermined a 126.56 point buy point by more than 8%, prompting the auto sell rule. Snap also tripped over the automatic sell rule, falling more than 8% below its buy point of 80.95.
Upstart Holding (UPST), Pocket (TASK), Asana (EASY) and Sea Limited were also early leaders among IBD 50 growth stocks. A strong volume advance would technically place Sea Limited in a buy zone on a rebound from its 10-week moving average.
Also on the IBD 50 list, AutoNation (A) jumped more than 4%, recovering a buy point at 125.31. Morgan Stanley upgraded the stock to the same weight, from underweight, and assigned it a target price of 116, from 70. The share’s buy range extends to 131.58.
IBD 50 Jefferies Financial shares rose 0.6%, still in a buy range above a three weeks tight buy point at 37.95. Investors may also have moved into the stock after a rebound on September 22 from support at their 10-week moving average.
Vital Signs: Oil, NatGas, Bond Yield, Bitcoin
Crude oil prices in the United States cut their initial losses on Wednesday, after a 0.2% drop on Tuesday broke a five-day advance. West Texas Intermediate crude traded 0.9% lower at $ 74.65 a barrel. That leaves it 3% below its seven-year high at $ 76.98, set in early July.
Natural gas prices have soared nearly 500% in Europe over the past 12 months, and that price pressure has spilled over into US trade, compounded by low natural gas inventories ahead of the winter heating season. US natural gas futures fell another 5% early Wednesday, to $ 5.59 per million British thermal units, after rising to $ 6.28 on Tuesday.
Bond yields also fell, after rising to their highest level since late June on Tuesday. The 10-year Treasury yield fell two basis points Wednesday to 1.51%. The yield remains well below the high mark for the year above 1.76%, reached in April.
Bitcoin’s initial earnings faded, dropping to just over $ 42,000, according to CoinDesk. The cryptocurrency traded as high as $ 42,578 and as low as $ 40,783 during the previous 24 hours.
Nasdaq, S&P 500 and Dow Jones today
With two trading days to go in September, Monday’s heavy losses put the major market benchmarks on track to their worst monthly performance in a year.
The Nasdaq was down 4.7% for the month, the S&P 500 was down 3.8%, and both indices leaned toward their widest monthly declines since last September. The Dow Jones today is down 3% for the month, pointing to its worst month since last October. This is for a month in which the S&P 500 has averaged a 0.25% gain over the past 10 years, the Nasdaq has averaged a 0.4% advance and the Dow, on average, is up 0.7 %.
While Monday’s losses did not technically break the market’s attempt at a new uptrend, they left the benchmarks dealing with some damage to the charts. The Dow, the Nasdaq and the S&P 500 decisively broke below the 50-day support, with the Nasdaq testing its September 20 lows.
Growth stocks, market status
Additionally, growth stocks suffered fierce losses on Monday. The Innovator IBD 50 ETF (FFTY) dipped 9.5% in all three sessions through Tuesday. The iShares Russell 1000 Growth ETF (IWF) fell 3.8% in those same three days. Both funds broke below their 50-day moving averages.
Another factor among the larger indexes: Tuesday’s results raised the number of days of distribution at six pesos on both the Nasdaq and the S&P 500, placing the the state of the market under increased pressure. That means, according to Big Picture’s market analysis on Tuesday, that new purchases carry a much higher risk. Raising capital by removing the biggest losers from your portfolio and profiting from your winners can help protect your portfolio from further damage.
Follow Alan R. Elliott on Twitter @IBD_Aelliott
YOU MAY ALSO LIKE: