The stock market rally had a mixed session. Nasdaq retreats from 2023 highs while Dow Jones index climbs higher. Meanwhile, small and medium-cap stocks continued their recent rally.
Chips have fallen, but are still holding up better than many areas of technology. Nvidia (NVDA) declined modestly but remained within a recent range.
A variety of housing-related stocks and groups stand out.
Recent action could be a healthy correction to a narrow market rally. However, there are few buying opportunities on Wednesday and reasons to exit or cut positions for some of the hard-hit names.
Floors & Decorations (FND) is possible after making an upside move above the 50-day line in a base. mobile (MBLY) issued a buy signal but closed in the lower half of its range. biology (BIIB), which is technically in a buy zone, has bounced back from the 50-day line on a hopeful sign of FDA approval of its newest Alzheimer’s drug.
Dow Jones Futures Today
Dow Jones futures contract fell below fair value. S&P 500 and Nasdaq 100 futures edged higher.
SMAR stock fell 19% overnight. Smartsheet earnings top Q1 EPS and revenue views. But the bills have dropped. The workplace management software maker also released full-year EPS, revenue and cash flow guidance showing some underperformance for the rest of the year. Shares fell 5.15% to 49 in Wednesday’s trading. fell back to about 48.99 buy points. Smartsheet stock rose 4.8% on Wednesday.
GME stock fell 19% in hours, signaling a move below key moving averages. GameStop reported a larger-than-expected loss and a drop in revenue. The mall-based video game retailer and stock meme pioneer also fired CEO Matt Furlong and appointed major investor Ryan Cohen as executive chairman. GameStop shares rose 5.75% to 26.11 on Wednesday. GME stock is operating at a buy point of 27 from the bottom making base.
Biological Alzheimer’s drug
FDA staff document for Friday advisory board For Biogen’s Alzheimer’s therapy, Leqembi is no surprise, analysts said Wednesday. That raised hopes that the committee would recommend ratification. Biological Reserves made a bullish reversal around the 50-day line, up 1.7% to 304.90.
BIIB stock remains in the 296.90 range double bottom buy point, originally cleared on April 28. Wednesday’s fresh strength offers fresh buying opportunities near the 50-day moving average and a break of a month-long downtrend.
Stock market recovers
The stock market rally saw a Nasdaq pullback as many big tech stocks fell sharply, but other sectors held up or performed well.
The Dow Jones Industrial Average rose 0.3% on Wednesday stock market trading. The S&P 500 index fell 0.4%. The Nasdaq composite fell 1.3%, its worst drop since April 25. The Russell 2000 small-cap index gained 1.8%, while the S&P MidCap 400 gained 1.5%.
US crude oil prices rose 1.10% to 72.53 USD/barrel.
The yield on the 10-year Treasury note rose 8 basis points to 3.78%. However, Treasury bill yields fell overall. One-month Treasury bills fell below 5% after rising 6% at the end of May just before the debt ceiling deal.
Markets are still betting that the Federal Reserve will pause next week. However, the Bank of Canada unexpectedly raised interest rates on Wednesday, a day after Australia’s central bank also defied expectations.
Among the growth ETFs, the Innovator IBD 50 ETF (FFTY) slipped 2%, while Innovator’s IBD Breakthrough Opportunity ETF (HOUR) increased by 0.7%. iShares Expanded Tech-Soft Sector Sector ETF (IGV) fell 3.1%, with major holdings of Microsoft and ServiceNow and SMAR stock also in IGV. VanEck Vectors Semiconductor ETF (SMH) decreased by 0.6%. Nvidia stock is a big one.
Reflecting more speculative stocks, the ARK Innovation ETF (ARKK) fell 1% and the ARK Genomics ETF (ARKG) takes just over 1%. Tesla stock is the #1 holding on Ark Invest ETFs. SHOP stock is also a big stock.
SPDR S&P Metals & Mining ETF (XME) rose 1.3% and the Global X US Infrastructure Development ETF (PAY THE ROAD RED) runs 2.1%. US Global Jets ETF (jet plane) increased by 0.6%. SPDR S&P Homebuilders ETF (XHB) rose 1.5%, with FND stock holding notably. Energy Select SPDR ETF (XLE) recovered 2.7%. SPDR Foundation for healthcare sector (XLV) decreased by 0.4%. BIIB stock is XLV.
Analysis of market recovery
The stock market rally saw high bullish areas retreat while other segments prevailed.
The Nasdaq held a bearish day outside after hitting a new 52-week high shortly after the open. The Composite Index and Nasdaq 100 were stretched. The Nasdaq overall is now 6.2% above the 50-day line and the large-cap Nasdaq 100 is 6.9%, still up slightly.
The S&P 500 has dropped, remaining at its 2023 high.
The Dow Jones Industrial Average rose slightly after finding support at the 50-day line on Tuesday.
Meanwhile, the Russell 2000 index and S&P MidCap 400 continued to lead the way thanks to the recovery of bank stocks.
First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) was down just over 1%, but better than the Nasdaq 100’s 1.7% loss.
Invesco S&P 500 Equal Weight ETF (RSP) increased by 0.7%.
Advancers led losers by nearly 2 to 1 on the NYSE and by a solid margin on Nasdaq.
Overall, the market’s recovery action could be positive. Yes, we all want stocks to go up every day, but that just can’t happen. So it’s healthy for some big winners to pause or humbly retreat. Meanwhile, market breadth continued to widen.
Of course, if the Nasdaq sell-off continues and the broader market falters as well, the possible “constructive” action on Wednesday could become the start of a “destructive” slide. destroy”.
Main industries, stocks
The housing sector, which includes housing builder, building materials, and home furnishing retailers, is solid or robust. So are the energy, steel and infrastructure games. Some of these names, such as FND stock, have issued buy signals, while others have broken through key levels. However, many people need a lot of repair work.
Tech giants, software names, e-commerce and health products have had a rough day. For some, it’s a noticeable but normal pullback after a long time. MSFT stock fell 3.1%. Google stock fell 3.8% in a bearish reversal. Amazon stock is down 4.25% and NOW stock is 4.9%.
However, the others suffered more technical damage. SHOP stock fell 6.4%, dropping early on Tuesday. working day (DAY) decreased by 5.4% and cloud (NET) dropped by 8.5%, all dropped to buy points. DXCM stock fell 4.5%, once again reversing from near a traditional buy point and back to the 50-day moving average.
Chips did OK overall. MBLY stock rose 2.8%, but bounced off initial highs, closing below the downtrend breakout. Nvidia stock slid 3%, below the 10-day line as it trades in a range since the gap after the May 25 earnings.
Tesla shares rose 1.5% to 224.57, off an intraday high of 280.83. But it was the ninth straight gain and the eighth in a row on above-average volume. TSLA stock extended from a 207.79 buy point. The relative strength line is at a seven-month high. As of Tuesday night, Tesla began offering a 1% discount on Model 3 inventory in the U.S. Tesla has offered a substantial discount on inventory on other Model 3 variants.
What to do now
The market rally seems to be orderly and constructive. But some stocks are retreating below key levels, while many gainers are still out of position. Investors don’t know if the rotation will continue or if it will be more volatile.
Right now, buying opportunities are relatively few, while investors may want or need to reduce or exit some positions.
Hopefully, market action will create plenty of opportunities, from big winners resetting and potential leaders exploding. Look for these stocks by running the monitor and updating the watchlist.
Read Big picture every day to stay in sync with market trends and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
YOU MIGHT ALSO LIKE: