The Dow Jones Industrial Average, Nasdaq and S&P 500 continued to pull lower on Friday despite a bullish reversal on Wednesday. Only a few companies within the IBD 50, meanwhile, are setting up promising new bases.
Stock Market Today
At around 1:30 p.m. ET, the Dow Jones industrials were down 0.9%, after getting turned away at resistance at the 200-day moving average earlier this week. The Nasdaq composite lost 1.8% as it got turned away at its 21-day exponential moving average, a current resistance level.
The S&P 5oo declined 1.2% and also fell further below its 200-day moving average. The yield on the 10-year Treasury note faded earlier gains from this week. The yield fell to 1.92%, after spiking above 2% on the recent concerning inflation data.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34048.60 | -263.43 | -0.77 |
| S&P 500 | (0S&P5) | 4337.82 | -42.44 | -0.97 |
| Nasdaq | (0NDQC ) | 13502.68 | -214.04 | -1.56 |
| Russell 2000 | 199.37 | -1.83 | -0.91 | |
| IBD 50 | 36.96 | -0.29 | -0.78 | |
Last Update: 1:40 PM ET 2/18/2022 |
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The Russell 2000 traded down 0.9% before trimming some of that loss. Data showed volume was running higher on the Nasdaq and on the NYSE vs. the same time on Thursday. This is a bearish indicator, as selling in heavy volume often indicates the force of institutions distributing shares back into the market.
However, keep in mind that volume is getting a boost from the expiration of weekly and monthly equity and index options.
The Innovator IBD 50 ETF lost 0.7% after finding resistance at the 21-day line.
Ongoing geopolitical tensions have contributed to much of the market's volatility this week.
The indexes fell sharply on Thursday as the threat of large-scale military action remained high in the Ukraine. Artillery, tank and mortar exchanges picked up Friday in the cease-fire area separating the Ukraine-controlled portion of Donetsk and Luhansk from Russian-held areas, the Wall Street Journal reported.
After the downgrade in IBD's market outlook to "uptrend under pressure" last week, investors should remain very conservative with new buys and hesitant to buy stocks. Thursday's Big Picture column noted that, "The Nasdaq's distribution-day count rose to four. Higher NYSE volume meant the S&P 500 upped its count to three days of institutional selling since the Jan. 31 follow-through day."
Stocks Moving On Earnings
Deere & Co. reported better-than-expected January-ended quarter earnings and raised full-year guidance. Despite the good news, shares sold off over 3% in strong volume and faded from a recent 388.20 buy point. The stock scored a breakout last week and is now seeking support at the 50-day moving average.
A labor strike in October and November added to the company's supply chain problems. Deere earnings came in at $2.92 a share with revenue of $9.57 billion. Revenue was also above expectations.
Shake Shack dropped over 4% after the hamburger chain posted a smaller-than-expected Q4 loss. But its current quarter $196 million-$201.4 million sales forecast was below views. Same-store sales estimates also missed expectations. Shares found support at the 50-day line and pared earlier losses, however, which is a good sign.
Outside Dow Jones: Stocks To Watch
Very few stocks were breaking out on Friday. But a handful of stocks are currently setting up in bases and are worth watching. These include IBD 50 stocks O'Reilly Automotive, SSR Mining and copper and copper alloy manufacturer Mueller Industries.
O'Reilly is setting up inside a cup base with a 710.96 buy point. The stock is still 4% away from the entry and just reclaimed its 50-day line. After reporting strong earnings on Feb. 9, shares have pushed higher. The upward trending RS line indicates market outperformance in recent days as well.
SSR Mining is also shaping the right side of a cup base with a 20.16 proper entry point. Shares pulled back 0.7% today but remain up over 4% for the week and appear to be rising in strong volume as well. The company remains 8% away from the entry.
Mueller Industries, recent IBD 50 Stock's To Watch pick, just reclaimed its 50-day line and is nearing a 60.83 entry. The stock formed a double-bottom base after a powerful breakout and run-up near the end of last year. Bullishly, the RS line is notching a new high ahead of the possible breakout.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
