Indexes remained near session lows at noon Tuesday. The Dow Jones Industrial Average fell 1.2%, or 380 points, after strong jobs data. The index is testing June’s lows as yields continue to spiral upward.
X
The S&P 500 fell 1.4% at 12 p.m. ET in the stock market today. The index has undercut last week’s low, a bearish sign.
The Nasdaq fell 1.7% after rebounding from August’s lows in a four-day rally attempt. A follow-through day remains elusive.
Volume on the NYSE and on the Nasdaq was higher compared with the same time on Monday.
The small-cap Russell 2000 fell 1.6%, while the Innovator IBD 50 ETF (FFTY) underperformed, falling 2%.
IBD 50 stock Capital Southwest (CSWC) slid below the 50-day line with a 3.5% drop in heavy volume. It may trigger the 7% sell rule as it falls below a buy point of 22.92.
Novo Nordisk (NVO) is round-tripping gains from its last breakout by falling back near its buy point of 86.48. The IBD 50 pharmaceutical stock had climbed as much as 17% from that entry.
The Job Openings and Labor Turnover Survey (JOLTS) for August came in at 9.61 million, well above consensus views of 8.75 million. It rose from July’s 8.827 million, according to Econoday. The strong labor market could give the Fed more reason to raise Fed funds interest rates. September’s nonfarm payroll data will be released Friday after Thursday’s ADP employment report for September.
On Tuesday, Atlanta Fed President Raphael Bostic indicated that rates would stay high for some time. The IBD/TIPP U.S. Economic Optimism Index fell to a 12-year low in October.
The yield on the benchmark 10-year Treasury note rose a further 10 basis points to 4.78% and is now at the highest since July 2007. The U.S. dollar continued its ascent as odds of another rate hike this year rose to 31.7% for November and 41.1% for December.
Gold fell. Crude oil rose less than 0.5% to trade at $88.91 a barrel.
Dow Jones Stocks
In the Dow, Intel (INTC) retook its 50-day moving average. Nike (NKE) rose and is holding the bulk of its gains after an earnings gap-up last week. Among other tech leaders, Apple (AAPL), Microsoft (MSFT) and Salesforce (CRM) fell 1%-2.3% and remain below their 50-day lines.
Outside the Dow, Eli Lilly (LLY) fell and is below the 50-day line after news that it will buy Point Biopharma Global (PNT) for $1.4 billion. LLY has given up the bulk of its 28% gain from a buy point of 469.87. PNT stock surged more than 80% but is thinly traded.
HP (HPQ) rose after Bank of America upgraded the stock to buy from underperform. Value investor Warren Buffett is reported to have sold 5.1 million shares of the computer hardware maker for around $130 million. HPQ stock remains well below its 50-day line.
McCormick, Airbnb Among Movers
Outside the Dow Jones index, spice maker McCormick (MKC) plunged after fiscal third-quarter results were announced. Earnings declined to 65 cents per share from 69 cents in the prior year’s quarter. Sales rose 6% to $1.68 billion but missed expectations. For the full year, the company expects midpoint sales growth of 6% through pricing moves and cost savings to counter inflationary pressures.
Also in the food sector, Cal-Maine (CALM) reports after the market close. The egg producer’s stock has fallen this week and is testing its 50-day line ahead of earnings.
Airbnb (ABNB) got a downgrade from KeyBanc to sector weight from overweight. Analysts, who did not give a price target, see demand for leisure travel fading. ABNB stock fell below its 50-day line but is still forming a cup with handle.
Digital freelance platform Fiverr (FVRR) rose 2% on an upgrade from Roth MKM to buy from neutral with a price target of 33. Shares face resistance around 30. Analysts at UBS upgraded Warner Music Group (WMG) to buy from neutral. Shares met resistance at the 50-day line and were flat at midday.
Energy stocks in the IBD 50 continued to fall amid wider weak action. Tidewater (TDW) and Liberty Energy (LBRT) remain above the 50-day line as they pull back. But Dorian LPG (LPG) is breaking support at the key level after sliding more than 6%. A handle entry of 28.69 is in danger of failing.
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Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.
