The Nasdaq composite gave back all of Tuesday's relatively mild gains and led the downside among the indexes on Wednesday. Meanwhile, the Dow Jones Industrial Average and S&P 500 turned negative in afternoon trading and also traded at or below the prior days' lows.
Nasdaq Leads Upside As Indexes Turn Positive
The major indexes slumped after Tuesday's attempt to rally after multiple days of intense, broad declines. Earlier this week, the Nasdaq notched a three-day losing streak of more than 10%, making it the biggest three-day decline since March 2020. On Wednesday, the indexes were back to getting hammered by investors, although volume came in lighter than the prior day.
At the close, the Dow Jones industrials traded down 1%. The S&P 500 lost 1.6% as the small-cap Russell 2000 held a 2.5% loss. The Nasdaq underperformed with a 3.2% loss as tech stocks continue to struggle. According to early data, volume was running lower on the Nasdaq and on the NYSE vs. the close on Tuesday.
Inflation data came out at 8:30 a.m. ET and pushed the key 10-year Treasury bond yield lower. The consumer price index rose 8.3% in April from a year ago, down slightly from the 8.5% jump last month. The CPI climbed 0.3% from the prior month, according to the Labor Department. Economists expected CPI to rise 0.2% on the month and 8.1% on a year-over-year basis.
Core CPI, which doesn't include food or energy prices, rose 0.6% from March. The annual core inflation rate fell to 6.2% after rising 6.5%, the highest since August 1982, last month. Forecasts expected core CPI to increase 0.4% from February and 6% from a year ago.
The 10-year Treasury yield fell 7 basis points, to 2.92%, after falling 8 points on Tuesday.
The Innovator IBD 50 ETF, a benchmark for growth stocks, held a loss of around 1.5%, after falling over 6% on Monday. It's certainly been an unforgiving market for growth stocks. IBD industry groups leading the upside included several oil and gas-related groups, as well as coal energy and tobacco stocks.
Dow Jones Stocks: Big Oil Gains
Crude oil reversed higher on Wednesday after a sell-off earlier this week put the commodity below $100 per barrel. Today, U.S. crude oil rallied 5.3% to around $105.05 per barrel.
Energy stocks continued to recover more of their losses from Monday's steep declines. The Energy Select Sector SPDR rose around 1.3% and led the upside among S&P 500 sectors. The ETF found support at the 50-day moving average, a positive indicator. Utilities and materials also outperformed. On the downside, technology and consumer discretionary stocks showed losses of over 3% each.
Outside the Nasdaq exchange, large and megacap oil stocks rose, with Chevron ranking as a top gainers among blue chips. Shares of the integrated oil and gas firm rose 1.3% and reclaimed support at their 50-day line. The stock is currently forming a flat base with 174.86 entry. Shares remain 6% below the buy point while the RS line is ticking up to new highs ahead of the breakout.
Elsewhere, Exxon Mobil was up 2.1% while BP and Shell gained 1% and 1.6%, respectively.
On positive earnings news, Canadian oil firm Suncor jumped nearly 3.7% after reporting earnings per share of $1.93 on revenue of $13.5 billion late Tuesday. Earnings beat estimates of $1.27 per share and grew 292% on a year-over-year basis. Revenue jumped 56% from the prior year. Shares are currently up over 40% year-to-date through May 11.
Earnings Movers: GlobalFoundries, Electronic Arts
Nasdaq-listed semiconductor manufacturer GlobalFoundries beat Q1 earnings estimates late Tuesday as quarterly sales strength surprised investor. Guidance for the current quarter also was much better than expected. But the contract chipmaker reversed lower and lost over 6% in heavy volume after hitting resistance at the 21-day exponential moving average.
Conversely, Electronic Arts gapped up more than 7% in strong volume, recovering its 21-day line and a four-day slide. The stock is attempting to regain its 50-day line as well.
The video game publisher reported March-quarter sales and earnings late Tuesday. Despite missing sales expectations, investors reacted positively to the number of new game titles Electronic Arts plans to release. The firm reported EPS of $1.46 a share on sales of $1.82 billion, representing year-over-year increases of 19% and 36%, respectively.
Follow Rachel Fox on Twitter at @IBD_RFox for more Nasdaq and stock market commentary.
