The Dow Jones rose slightly Wednesday morning but gains faded as the S&P 500 and Nasdaq hovered around break-even following Tuesday's bearish market sell-off. Treasury yields retreated.
General Mills rose on strong earnings, breaking out of a base. Bed Bath & Beyond plunged on a big quarterly losses, plus the housewares retailer and one-time "meme" stock ousted its chief executive.
FedEx unveiled long-term financial targets ahead of an investor day. FDX stock fell solidly.
China electric-vehicle maker Nio skidded as it refuted a short-seller report. Tesla fell as it cut Autopilot jobs. Nio and Tesla will report sales late this week, along with Xpeng, Li Auto and BYD.
Upstart Holdings and Carnival Corp. tumbled on major price target cuts from Morgan Stanley.
Dow Jones Today
The Dow Jones rose 0.3%. The S&P 500 tilted higher and the Nasdaq was just below break-even.
First-quarter GDP fell at a 1.6% annual rate vs. the prior revision of a 1.5% decline. Analysts expected a 1.4% drop. Notably, consumer spending growth was revised down to a lackluster 1.8% pace from 3.1%.
Fed chief Jerome Powell reiterated his vow to fight inflation aggressively, with no guarantees of a soft landing.
The 10-year Treasury yield sank to 3.13% from 3.21%. The two-year yield fell to 3.1%, but that key yield spread is nearly inverted again.
Crude oil prices rose nearly 2%. OPEC+ meetings take place Thursday, but it's unclear if the cartel will make any big supply moves that affect prices significantly.
Bitcoin slid to the $20,000 level. The Bitcoin price hit an 18-month low of around $17,800 on June 18, but rebounded above $21,000 late last week.
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Stock Market Rally
The Dow Jones Industrial Average fell 1.6% in Tuesday's stock market trading. The S&P 500 index skidded 2%, with Enphase Energy among the worst performers. The Nasdaq composite sold off 3%. The small-cap Russell 2000 retreated 1.85%.
The Nasdaq plunged below the lows of its Friday follow-through day, while the S&P 500 just closed below its FTD low. That's a highly bearish signal.
Research from Eric Krull, co-author of The Lifecycle Trade, shows that there's a 90% chance that the rally will ultimately fail when an index closes below its follow-through day low. The rally is not officially over until the indexes undercut their recent lows.
The Dow Jones did not close below its follow-through day low, but it isn't far off.
Tuesday's move pushed the market to "uptrend under pressure."
Five Best Chinese Stocks To Watch Now
General Mills
General Mills earnings rose 23% to $1.12 a share. Revenue climbed 8% to $4.89 billion. Both beat analysts' fiscal fourth-quarter views. The cereal giant also raised its quarterly dividend by 3 cents to 54 cents a share.
GIS stock rose 5.5% to 74.13, just above a 74.09 buy point from a cup base, according to MarketSmith analysis. General Mills stock is rebounding from near its 50-day line.
The relative strength line for GIS stock are right at a record high.
Bed Bath & Beyond Earnings
Bed Bath & Beyond reported a first-quarter loss that was much worse than expected. Revenue tumbled 25% to $1.46 billion, also missing.
Mark Tritton stepped down as CEO and from the board of directors. Board member Sue Gove will act as interim CEO.
BBBY stock dived 18% to a fresh two-year low.
FedEx Targets
Shipping giant FedEx, ahead of Wednesday's investor day event, sees annual per-share earnings growth of 14%-19% through fiscal 2025, with a 10% consolidated operating margin.
It pledged an adjusted dividend payout ratio of at least 25%
FDX stock fell 5%, back below its 200-day line. Shares popped above the 200-day moving average last week after reporting better-than-expected earnings.
Big Price Target Cuts
Morgan Stanley downgraded Upstart stock to underweight and cut its price target all the way to 19 from 88. UPST stock plunged sank 10% to 32.10.
Morgan Stanley also cut its Carnival stock price target to 7 from 13, but introduced the possibility that shares could plunge all the way to zero in a worst-case scenario. CCL stock skidded 16% to 8.70.
Tesla Autopilot Cuts
Tesla is closing a San Mateo, Calif., office, eliminating 200 low-level positions from its Autopilot team. The EV giant is making sweeping layoffs as CEO Elon Musk fears a recession.
Tesla stock fell 3%. On Tuesday, Tesla stock fell 5% to 697.99, back below its 21-day line.
In early July, perhaps Saturday, Tesla will release second-quarter global production and delivery figures. Investors can expect a substantial decline vs. the first quarter, due to the Shanghai plant shutdown and slow recovery due to China's Covid lockdowns.
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Nio Refutes Short Seller Report
Nio said a Tuesday report by short-seller Grizzly Research "is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations."
Grizzly accused Nio of accounting fraud to inflate revenue and net income margins. Nio stock sank 2%.
Nio will release June sales on Friday, along with fellow China EV startups Li Auto and Xpeng. EV and battery giant BYD is expected to release June sales on Saturday and Sunday.
Li Auto stock rose 1%, back near a 37.55 buy point after tumbling Tuesday following a massive run-up. Meanwhile, XPEV stock lost 2%.
BYD stock fell 3% to 40.24, holding above a 39.81 cup-with-handle buy point.
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