The Dow Jones Industrial Average fell but other indexes gained as House Speaker Kevin McCarthy issued a challenge to President Joe Biden amid their debt ceiling meeting. DraftKings soared on a bullish analyst call. Apple dipped following a downgrade.
Meanwhile some notable stocks tested entries despite the mixed action. MercadoLibre, Array Technologies and 10X Genomics all attempted breakouts.
Treasury yields moved higher. The 10-year yield rose 3 basis points to 3.72% while the two-year yield spiked 5 basis points to 4.36%, making the yield curve more inverted.
McCarthy Urges Biden To Beat Debt Ceiling Addiction
McCarthy and Biden are getting set to meet as the clock continues to tick on debt ceiling talks. The U.S. runs the risk of default if an agreement is not reached within the next 10 days.
The duo spoke via telephone on Sunday, a conversation described as "productive." Treasury Secretary Janet Yellen once again said over the weekend that June 1 is a "hard deadline" to raise the debt limit.
Meanwhile, McCarthy was in a pugnacious mood as he got set to head to the Oval Office for further discussions with Biden.
"What we have to do here is get the spending addiction to stop," he told reporters. "The Democrats and the president (are) refusing to even to negotiate. No household would run this way. That is why we go from crisis to crisis."
Nasdaq Gains As Small Caps Pop
The Nasdaq fared better than the other major indexes, closing up 0.5%. Micron Technology lagged, falling 2.8% after China's Cyberspace Administration barred critical information infrastructure operators in the communist country from purchasing its products.
The benchmark S&P 500 made a nominal gain but was essentially flat. Dating stock Match Group impressed here with a gain of 6.7% after it named Meta Platforms alumnus Stephane Taine as chief product officer of its Hinge dating app.
The S&P 500 sectors ended the day mixed. Communication services and real estate were the top performers. Consumer staples and materials lagged.
Small caps were outperforming by some margin, with the Russell 2000 rising 1.1%. Growth stocks also excelled, with the Innovator IBD 50 ETF lifting 0.8%.
Dow Jones Today: Apple Stock Slips After This
The Dow Jones average was struggling most out of the major indexes. It slipped 140 points, or 0.4%.
Industrial conglomerate 3M fared best, rising 2.7%. It remains stuck below its 50-day moving average for now.
Nike was the worst performer on the Dow Jones today, falling 4%. An analyst downgraded the stock to a sell rating. Shoe stocks have been coming under pressure following poor results from Foot Locker.
Apple stock showed resilience even as it fell 0.6%. It fell after it was downgraded to hold from buy by Loop Capital. It did hold its price target at 180.
Loop's supply chain analyst John Donovan believes Apple has reduced its shipments for the June quarter. This could cause the firm to fall short on its revenue guidance.
DraftKings Stock Surges On Upgrade
DraftKings closed the off highs for the day but still rose 4.6%. It jumped after UBS analyst Robin Farley upgraded it to buy from neutral and hiked his price target to 30 from 19. He cited "higher revenue growth and greater flow-through to EBITDA" as the rationale for the upgrade.
According to Farley, the expansion of sports betting into new states could fuel further growth.
The gambling stock is now extended past a 21.72 buy point, according to MarketSmith analysis. It is up nearly 133% so far in 2023.
DKNG is a member of the prestigious IBD Leaderboard list of top stocks. It has been showing renewed signs of accumulation as it moves to higher ground.
The stock currently holds an average analyst rating of outperform and price targets ranging from 17 to 39.
PacWest Stock Rockets On This Move
Closely-watched regional bank play PacWest ended the session with a powerful gain of 19.6%.
It got a boost after it announced it is selling $2.7 billion in real estate loans to Kennedy-Wilson.
Monday's muscular move will be of little comfort to long-term holders of PacWest stock though. PACW remains down around 70% since the start of 2023.
Nevertheless, the stock market seemed cheered by the deal, with Kennedy-Wilson also ending the session up 3.1%.
The iShares U.S. Regional Banks ETF also popped Monday, closing up 2.6%. It remains down around 30% for the year.
Outside Dow Jones: MELI Among Stocks Testing Entries
Former Leaderboard stock MercadoLibre is in a buy zone after clearing a flat base entry at 1,337.85 on its weekly chart, MarketSmith analysis shows.
The e-commerce stock boasts a perfect IBD Composite Rating of 99. Stock market performance is its strongest suit and it is up over 62% so far in 2023.
Array Technologies is just below its entry after earlier clearing its 24.69 entry by a small margin. Low volume on the move is a flaw.
The solar stock boasts a good mix of earnings and stock market performance. It is in the top 4% of stocks in terms of price performance over the past 12 months.
10X Genomics is trading in a buy zone after clearing a flat-base entry of 56.32. Volume was above average here.
At the moment, this a more speculative play, with its EPS Rating a poor 21. But it is on track for a profit this year. Big Money has also been a net buyer, with its Accumulation/Distribution Rating a solid B+.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
