The Nasdaq composite rebounded on Tuesday after trading in the negative for much of the session. The tech-heavy index led the upside with gains of almost 1% after trading up over 2% earlier. But the Dow Jones Industrial Average closed lower after briefly turning positive in afternoon trading.
Nasdaq Leads Upside As Indexes Turn Positive
The major indexes attempted to bounce back after a three-day sell-off and the Nasdaq ended the day in positive territory. This follows the Nasdaq's 4.3% loss Monday, which marked a three-day losing streak of more than 10%. It was the largest three-day decline since March 2020. Monday's The Big Picture column commented, "Its three-day, 1,341-point loss is the largest on record, according to Dow Jones Market Data."
At the close on Tuesday, the indexes were mixed. While the Dow Jones industrials traded off intraday lows but still closed down 0.3%. The S&P 500 rose 0.2% as the small-cap Russell 2000 held a 0.1% loss. According to IBD data, volume was running higher on the Nasdaq and on the NYSE vs. the same time on Monday.
The 10-year Treasury yield fell 8 basis points, trading down to 2.99% and dropped below 3% for the first time since Thursday. Crude oil, meanwhile, continued lower after Monday's sell-off. U.S. crude oil fell more than 3% to $99.56 per barrel.
Energy stocks recovered a small portion of their losses from Monday's steep declines. The Energy Select Sector SPDR rose around 0.9% on Tuesday after Monday's decline of over 8%.
S&P 500 sectors leading the upside included technology stocks and communication services, up around 3% and 2%, respectively. On the downside, utilities and real estate held losses of around 1% each.
Stocks To Watch
The Innovator IBD 50 ETF, a benchmark for growth stocks, held a small loss of around 0.3%, after falling over 6% on Monday. It's certainly been an unforgiving market for growth stocks.
IBD industry groups leading the upside included biotech stocks and several semiconductor-related groups. Travel booking and lodging stocks also outperformed on Tuesday.
Dow Jones Medical Plays Still Thriving
In biotech news, Pfizer rose 1.7% after the pharmaceutical giant announced it is acquiring biotech stock Biohaven Pharmaceutical in a deal valued at $11.6 billion.
Biohaven makes the migraine medication Nurtec ODT. Biohaven stock gapped up and jumped nearly 70% to its highest price since November.
The biotech company also announced earnings early Tuesday, and posted revenue of $318.85 million for the quarter ended March 2022. The firm also posted losses of $2.97 per share versus the Zacks consensus estimate of a loss of $2.52.
Elsewhere, Dow Jones leader Merck is among stocks standing tall amid the current market correction. Shares rose slightly on Tuesday, up 0.2% and held up well relative to the overall market weakness last week. The stock's RS line is sharply higher, showing relative strength vs. the S&P 500.
The drugmaker has held up above its 21-day exponential moving average since mid-March, a positive sign. Shares are trading near the 89.58 buy point of a cup-with-handle base.
Outside Dow Jones: Tobacco Stocks Get Smoked
Among IBD industry groups leading the downside on Tuesday, tobacco stocks slipped 3.3% collectively. Tobacco stocks are normally a safe haven amid weak markets. Altria Group lost almost 7% and fell below the 50-day line in heavy trading. The firm recently reported Q1 earnings that beat expectations, although sales dipped 2% from a year ago.
Altria was formerly in the Dow Jones Industrial Average.
Vector Group led the downside with losses topping 14%. Volume jumped 93% above its normal level. Shares also slid below their 50-day line in heavy volume after earnings were announced. EPS fell 17% vs. a year ago to 17 cents a share while revenue ticked up 15% to $312 million.
Phillip Morris also fell slightly, down 1%. Shares were finding support around their 50-day and 200-day lines on Tuesday. The company confirmed talks to acquire Swedish Match in a deal that could be worth $15 billion.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
