The major stock market indexes are down sharply, although they've pared losses over the last hour and are off lows of the day. The small-cap Russell 2000 index is getting hit the hardest. The Dow Jones Industrial Average was down over 600 points earlier in the session.
June month-over-month producer prices came in worse than expected at 1.1% increase when analysts' consensus was 0.8%. This negative news on top of yesterday's disappointing consumer price index has investors spooked as they weigh the possibility of a 100-basis-point rate hike in July.
Chief Equity Strategist at LPL Financial Quincy Krosby sees the inflation data supporting a full-point rate hike. "Just as the consumer price index startled markets, the producer price index (PPI) similarly saw a marked move higher as input energy costs surged," Krosby said in a note to clients. "This report will underscore the Fed funds futures market's near 100% call for a 100-basis-point interest rate hike for this month's Fed meeting July 26-27, especially if prospects for lower energy costs don't recede materially by then."
At midday, the Nasdaq is down 1.2% while the S&P 500 is down 1.3%. The Dow Jones Industrial Average is off 1.4%, and the Russell 2000 is down 1.7%. NYSE volume is 2.3% lower and Nasdaq volume is down 20.7% vs. the same time on Wednesday.
Chipmaker Beats Estimates; Medical Staffer Up
Taiwan Semiconductor Manufacturing, the world's largest chipmaker, is up 1.7% after beating analysts' expectations on Q2 earnings and sales. The company cited strong chip demand for auto-related and consumer goods for the second-quarter beat, and it raised revenue forecasts for the year. The stock price has been in a decline since it dropped below the 50-day moving average in February.
AMN Resources, a medical staffing company, is in the minority as it sees a 5.4% gain. The IBD 50 stock is at a new high on the weekly relative strength line on MarketSmith. Mutual funds have spotted its strength and have been adding it to their positions.
Morgan Stanley is down 0.2% on a miss on Q2 sales and earnings. The SPDR Select Financial ETF is down 1.8% on disappointing banks earnings.
Investors Seek Shelter in Discounters
Grocery Outlet is up 2.7% and beating the major indexes. The stock shows a best possible 99 Relative Strength Rating. Shares are extended from the 10-week moving average.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30456.16 | -316.63 | -1.03 |
| S&P 500 | (0S&P5) | 3766.58 | -35.20 | -0.93 |
| Nasdaq | (0NDQC ) | 11164.87 | -82.71 | -0.74 |
| Russell 2000 | 168.26 | -3.06 | -1.79 | |
| IBD 50 | 26.38 | -0.15 | -0.57 | |
Last Update: 12:08 PM ET 7/14/2022 |
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BJ's Wholesale Club is up 1.1%, as the company just wrapped up a three-day members WOW Days savings event. The stock is nearing a double-bottom base buy point of 71.10. The relative strength line hit a new high, a positive sign.
Arch Resources, a coal miner and seller, is down 6.6%, the biggest decline in the IBD 50. CF Industries, a fertilizer company, is off 6.5% as Credit Suisse initiates coverage with an underperform rating and a 73 price target on the stock. But RBC Capital increased its price target to 110 from 100, maintaining its sector perform rating.
ETF Moves
Invesco QQQ Trust, an ETF corresponding to the Nasdaq 100 Index, is down 0.5% and remains below the 21-day exponential moving average.
Bitcoin futures are up 3.8% and broke above the $20,000 level to $20,380, as investors shy away from stocks.
The Innovator IBD 50 ETF, a gauge of growth stocks, is down 0.6%, holding up better than the major indexes.
