The Dow Jones Industrial Average closed lower as House Speaker Kevin McCarthy made a debt ceiling pledge. Palantir soared after CEO Alex Carp boasted of its AI offering, while PayPal plunged following its quarterly report.
Things were relatively quiet on the breakout front. But MongoDB managed to move above a buy point.
Stocks were lower after New York Federal Reserve President John Williams said interest rates could increase if inflation fails to come down. He also said the "FOMC's actions to restore balance to the economy" will take time to take full effect.
The 10-year Treasury yield rose one basis point to 3.53% while the two-year yield lifted three basis points to 4.04%, making the yield curve more inverted.
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Speaker McCarthy Makes Debt Ceiling Pledge
An ongoing worry for investors is the current battle over raising the federal debt ceiling.
McCarthy rejected the idea of a short-term deal ahead of a meeting with President Joe Biden and congressional leaders today to discuss the issue.
"No, no, no. We shouldn't kick (negotiations) out (to the future). Let's just get this done now," McCarthy, R-Calif., told NBC News Tuesday.
This means any White House effort to secure a three-month debt ceiling extension looks dead on arrival. Republicans are keen to secure spending cuts as part of any deal to raise the Federal debt limit.
But President Biden has been firm on seeking an increase in the debt ceiling without spending cuts. However, he has said he is open to speaking about cuts as a separate issue.
The U.S. is in danger of defaulting on bonds if politicians cannot resolve the issue.
Nasdaq Lags As Small Caps End Lower
The Nasdaq lagged the other major indexes as it finished the session down 0.6%. EV stock Lucid dipped 5.6%.
The benchmark S&P 500 fell 0.5%. Dish Network struggled here as it fell 11.1%, extending a long slump. It emerged Monday that Dish is losing pay-TV subscribers faster than expected.
The S&P 500 sectors closed mainly negative. Only energy, industrials and consumer discretionary ended in the green. Technology and materials were the worst performers.
Small caps pared losses late, with the Russell 2000 closing down 0.2%. Growth stocks impressed, though, with the Innovator IBD 50 ETF closing nominally positive.
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The Dow Jones index fared better than the other major indexes but still closed lower. It dipped 57 points, or 0.2%.
Boeing fared best as it climbed 2.3%. Intel lagged most of its peers on the Dow Jones today as it fell 2.2%.
Goldman Sachs ended the session down 0.5%. GS stock lost ground on its 50-day moving average. The firm agreed to pay $215 million to settle a gender discrimination lawsuit. As part of the settlement the bank will hire an independent expert to "conduct additional pay equity studies."
Palantir Stock Soars Amid AI Claims
Palantir stock was one of the best performers on the stock market today following its earnings report.
PLTR shares rocketed after the firm's CEO Alex Karp boasted about the firm's ability to take advantage of the current artificial-intelligence craze.
"The depth of engagement with and demand for our new Artificial Intelligence Platform (AIP) is without precedent," he said. "We are currently mobilizing our company and sales teams in order to convert this organic and inbound interest into an expansion of our reach within the market."
Karp said the firm's AI platform will be made available to "select customers" this month.
The firm also posted Q1 EPS of 5 cents while revenue rose 18% to $525 million. This was better than analyst forecasts.
PLTR stock gapped up through its moving averages as it soared 23.3%. It remains shy of an entry of 10.41, MarketSmith analysis shows.
PayPal Stock Sinks After Report
PayPal stock plummeted following the firm's earnings late Monday.
A 33% EPS pop to $1.17 and a 9% climb in revenue to $7.04 billion bested analysts views for earnings per share of $1.10 on revenue of $6.98 billion.
Total payment volume processed from merchant customers climbed 10% to $354.5 billion, also above Wall Street projections. But while the firm raised its predicted adjusted earnings growth to about 20%, to $4.95 a share, it lowered its margin outlook.
PayPal stock gapped down and lost ground on its major moving averages. It finished the session down 12.7%. PYPL is now down nearly 12% so far in 2023.
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Outside Dow Jones: MongoDB Stock Tests Entry
In a tough day for breakouts, MongoDB stock stood out by climbing above an entry.
The database software play is trading in a buy zone after clearing a buy point of 248.25.
This is a first-stage pattern, which is a positive. IBD research has found such early-stage patterns are more likely to net big gains.
On the other hand, volume was flat, which is a bad sign on a breakout.
Overall performance is excellent, with the stock boasting an IBD Composite Rating of 95 out of 99. Big Money has also been a net buyer of late, giving MDB an Accumulation/Distribution Rating of B.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
