The Dow Jones Industrial Average reversed lower in midday trading on Tuesday while the S&P 500 and Nasdaq followed suit. The major indexes failed an early bounce once again after officially entering a bear market Monday.
Dow Jones Enters Bear Market
The Dow was down 0.8%, after being up as much as 0.6% earlier in the session, while the S&P 500 shed 0.6%. The tech-heavy Nasdaq was the last to turn negative, falling 0.3% after paring gains of over 1%. The Russell 2000 held up better than other benchmarks, down 0.2%.
Volume was higher on the NYSE and lower on the Nasdaq, compared to the same time on Monday.
Monday losses sent the Dow Jones into an official bear market as the index is now more than 20% below its early January high.
General standards for a bear market are a drop of 20% or more from a broad market index's most recent high. The indexes continue to look grim as IBD's market outlook remains in correction mode.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 29026.49 | -234.32 | -0.80 |
| S&P 500 | (0S&P5) | 3631.16 | -23.88 | -0.65 |
| Nasdaq | (0NDQC ) | 10767.20 | -35.72 | -0.33 |
| Russell 2000 | 163.58 | -0.59 | -0.36 | |
| IBD 50 | 23.88 | +0.13 | +0.55 | |
Last Update: 1:30 PM ET 9/27/2022 |
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So far this week, price action is following the frustrating pattern of early gains, followed by late-day losses.
"The faux rally was symptomatic of bear markets, when stocks often find strength in the early hours but buyers disappear by the close," commented Monday's Big Picture column.
Outside Dow Jones
West Texas intermediate crude oil futures rose 1.6% to $77.91 per barrel after undercutting $80 per barrel for the first time since January last week. The last few weeks have been difficult for oil stocks as the Energy Select Sector SPDR has fallen over 13%.
The yield on the 10-year Treasury note rose further to 3.95%. The benchmark spiked last week and has held near multiyear highs.
Looking at the 11 S&P 500 sectors, energy was the only sector trading higher. Defensive sectors like utilities and consumer staples led the downside.
As for IBD's industry groups, media-related sectors outperformed. Several oil and gas groups also traded higher on Tuesday. Two high-ranking groups, coal energy and solar energy, also outperformed.
On the downside, tobacco, food products and utility-related groups have fallen.
Outside The Dow Jones: IBD 50 Fund Near Six-Year Low
The growth-focused Innovator IBD 50 ETF held gains of around 0.5%, outperforming the major indexes. Even so, the fund is trading near a six-year low.
Many IBD 50 stocks posted decent gains on Tuesday, including energy plays HF Sinclair and Flex LNG, up 4.8% and 3.3%, respectively. Solar energy stocks Array Technologies and Enphase Energy also outperformed, rising 4.4% and 3.3%.
HF Sinclair is continuing to test support at its conjoined 50- and 200-day moving averages as the stock forms a long handle from a cup base. Shares remain 11% below the 56.40 buy point.
Investors may also consider the downward-sloping trendline forming within the handle as a possible entry.
However, given the market correction, investors should be very cautious about position entry and remain mostly in cash.
Solar energy play Enphase is currently gaining support at its 50-day line after a brief pullback. Shares broke out above a 193 double-bottom entry in June. Following the breakout, the stock powered to a new high of 324.84 in early September.
Vertex Pharmaceuticals gained 3% and is a top IBD 50 member to watch this week. VRTX stock is a component of the 6th-ranking Medical-Biomed/Biotech industry group.
Shares are currently trading in a flat base with a 306.05 entry. The stock's relative strength line also just notched a new high.
