The Dow Jones Industrial Average shed midday gains and was flat in early afternoon trading Tuesday amid surging Treasury yields and the release of hot retail sales data. The gains came as odds of a Federal Reserve rate hike coming in December rose to 38.1%, according to the CME FedWatchTool.
CME put the odds of a rate hike at 10% for the upcoming November Fed meeting. Meanwhile, Richmond Fed President Tom Barkin said the ruling body has time to decide on future rate hikes based on anecdotal information that points to a slowing economy.
Elsewhere, Tesla fell after a product recall ahead of earnings, which are due Wednesday. And Chinese regulators put a proposed chip deal under review.
Econoday reported that retail sales in September jumped to 0.7%, well ahead of economist projections for 0.3%. Excluding vehicles and gas, retail sales rose 0.6%.
The unrevised September figure compares with preliminary August numbers that showed an increase of 0.6%. That August figure later was revised to 0.8%, which suggests consumer spending remains high and could portend a bigger revision for September.
Along with the Dow, the S&P 500 was unchanged on the stock market today while the Nasdaq composite gave up gains and was lower by 0.2%. The tech-dominated index continues to struggle with the 50-day line since it fell below that threshold on Friday.
Dow Jones: Mixed Volume
The small-cap Russell 2000 defied the other indexes by rising 1.5%. But that index's 50-day line crossed below its 200-day line last week in what is commonly known as a death cross.
Volume on the New York Stock Exchange was higher, though lower on the Nasdaq exchange compared with the same time on Monday. Advancers were ahead of decliners by 2-to-1.
Meanwhile, the Innovator IBD 50 exchange traded fund gained more than 1%. The ETF is retaking the 50-day line. Further, crude oil rose 0.5% to trade at $87.07 a barrel.
And the yield on benchmark 10-year Treasury notes rose 12 basis points to 4.83%.
Dow Jones Stocks
Johnson & Johnson pared some early losses after reporting third-quarter results as it beat analyst views. Sales grew 6.8% while earnings per share showed a 19.3% increase. The drug titan also raised its midpoint sales and earnings outlook for the fourth quarter. Shares are on track for an outside day on Tuesday.
Goldman Sachs reported third-quarter earnings of $5.47 per share, lower than the prior year quarter's of $8.25 a share. Revenue from investment banking was unchanged while asset management fees declined. Shares recovered some early losses but remained below the 50-day line.
Among tech leaders in the Dow, Salesforce retook the 50-day line on Tuesday.
Outside the Dow Jones index, BNY Mellon reversed and rose in strong volume even as sales and earnings growth tapered. Revenue was 2% higher compared with the prior year's quarter, primarily due to more interest revenue and larger fees from sweep balances. Earnings per share grew 5%. The stock is hovering around the 50-day line.
Bank of America saw third-quarter revenue grow 3% while earnings per share rose 11%. Shares advanced but remained below the 50-day line.
Stocks Moving Today: Lockheed, Wyndham
Lockheed Martin reported a 2% increase in sales, but earnings per share declined to $6.77 from $6.87 in the prior year's quarter. LMT stock reversed earlier gains and fell. The stock remains above the 50-day line and offers a buy point at 508.10.
Wyndham Hotels & Resorts surged 8% on a proposed buyout from Choice Hotels'. Choice is offering to acquire Wyndham for $90 per share.
Elsewhere, Olink Holdings gapped up more than 60% after medical research company Thermo Fisher announced plans to buy the company for $3.1 billion. Olink's products help with the discovery of protein biomarkers.
United Airlines and Interactive Brokers are due to report after the market close. Both stocks are well below their 50-day lines.
Tesla Recall Over Warning Signal Issue
Tech earnings loom with ASML and Tesla due Wednesday, followed by Taiwan Semiconductor on Thursday.
Tesla pared early losses after regulators said the company would recall 55,000 Model X cars made in 2021 to 2023. The National Highway Traffic Safety Administration said the car's vehicle controller will not indicate low brake fluid levels. The electric-vehicle behemoth is said to have released a software update to fix the issue.
Tesla stock is finding support at the 50-day line in a handle with a 278.98 entry.
Also outside the Dow Jones, VMware triggered a sell signal by falling below the 50-day line in strong volume on news that regulators in China are reviewing its proposed takeover by chip giant Broadcom.
Finally, three IBD 50 components in energy and insurance — Frontline, Liberty Energy and Goosehead Insurance — all were up.
And two other insurers hit buy points. Unum broke out of a flat base with a buy point of 51.15, while Chubb is breaking out of a handle entry of 216.09.
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