The Dow Jones Industrial Average, Nasdaq and S&P 500 sold off on Thursday after a morning rebound dissolved in afternoon trading amid concerning economic data.
Stock Market Today
At the close, the Dow Jones industrials were down 1.5% as the index moved back below the 50-day moving average after reclaiming this area just yesterday. The Nasdaq composite lost 2.1% and fell below its 21-day line.
The S&P 5oo held a loss of 1.8% and also lost its freshly reclaimed 21-day exponential moving average. The yield on the 10-year Treasury note was up to 2.02%, the highest since August 2019 after another spike in inflation.
The Russell 2000 traded down 1.5%. Early data showed volume was running higher on the Nasdaq and on the NYSE vs. the close on Wednesday. This is a bearish indicator because rising volume on down days indicates institutional selling. The Innovator IBD 50 ETF fell 2.1% and wiped out yesterday's gain.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35241.69 | -526.37 | -1.47 |
| S&P 500 | (0S&P5) | 4504.06 | -83.12 | -1.81 |
| Nasdaq | (0NDQC ) | 14185.64 | -304.73 | -2.10 |
| Russell 2000 | 203.48 | -3.13 | -1.51 | |
| IBD 50 | 38.46 | -0.82 | -2.09 | |
Last Update: 4:06 PM ET 2/10/2022 |
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Strong gains from Tuesday and Wednesday were an encouraging sign for the market. But Thursday's open was negative after the consumer price index revealed inflation rose at its fastest pace in 39 years. Indexes pared most losses but selling resumed in the afternoon.
The CPI rose 0.6% from the prior month and 7.5% vs. year ago, the biggest annual gain since February 1982, the Labor Department said. The core CPI, which removes volatile food and energy categories, also rose 0.6% from December, while the annual core inflation rate rose to 6%.
Wall Street economists expected a 0.5% monthly rise for both the overall and core rate. The overall CPI inflation rate was expected to rise to 7.3%, with the core rate reaching 5.9%.
The major indexes were near session lows in afternoon trading. Patience is needed to see how the market closes out the week. It's still too early to tell whether the indexes will continue higher or will be turned away at resistance levels.
Setups are not coming from traditional growth names for the most part. The market appears to be focused on GARP plays — growth at a reasonable price. While IBD doesn't typically focus on P-E ratios, Wall Street is rewarding stocks with valuations more in line with that of the S&P 500 in the current interest rate environment.
Stocks To Watch This Week
Investors digested more earnings from major companies. Walt Disney beat forecasts for the fiscal first quarter ended Dec. 31. Theme park revenue recovered, while Disney+ subscriptions beat expectations. The stock jumped as much as 5% and is back above the 50-day moving average, which has been trending lower for several months. The stock faded from early gains, however, and was up around 3.1% in afternoon trading.
Disney earnings per share rose to $1.06 on sales of $21.82 billion. Disney+ subscribers reached 129.8 million. Disney's parks, experiences and consumer products division revenue notched $7.2 billion during the quarter, double the $3.6 billion from the year-ago quarter.
FactSet analysts saw Q1 earnings more than doubling to 74 cents a share vs. the year-ago period's 32 cents. Revenue was expected to grow 24.7% to $20.27 billion. FactSet saw Disney+ subscribers reaching 125.41 million.
Casino operator MGM Resorts International reported earnings late Wednesday of 12 cents per share from a loss of 90 cents a year ago. Year over year, revenue rebounded 105% to $3.057 billion, according to FactSet. But sales growth slowed from a gain of 683% in Q2 and 141% in Q3.
Shares fell over 2.8% Wednesday but remain near a 51.27 buy point. The stock is around 7% below the entry and had been rising in heavy volume in recent days.
Datadog jumped 12% after its fourth-quarter earnings and revenue blew past estimates. The company's 2022 revenue guidance also came in above expectations. The firm's 84% sales surge impressed investors, thanks to an expanding partnership with Amazon Web Services. The enterprise software maker is forming a double-bottom base with a 186.38 entry.
Breakouts For Eagle Bulk, Nutrien
In the MarketSmith Growth 250, shipping transportation leader Eagle Bulk Shipping moved past a 52.16 buy point of a cup, rising more than 8%. The stock's relative strength line is in new high ground, a bullish sign. The shipping transportation industry group is in high demand, and ranks No. 9 of the 197 groups IBD measures.
Nutrien, a chemical company, rose above a 77.45 buy point. But shares faded from the buy point in afternoon trading and were 2% below the entry.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
