The stock market traded sharply lower in early afternoon trading on Thursday after mixed earnings reports and the latest measure of inflation came in at a 39-year high.
Stock market indexes seesawed all morning but all major indexes were down by Thursday afternoon. At around 1:30 p.m. ET, the Nasdaq and S&P 500 each fell 1.2% to 1.4%.
The Dow Jones Industrial Average lost nearly 1.2% and is undercutting its 50-day moving average. The Russell 2000 gained 0.6% before going back into the red, down 0.3%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35552.52 | -215.54 | -0.60 |
| S&P 500 | (0S&P5) | 4552.83 | -34.35 | -0.75 |
| Nasdaq | (0NDQC ) | 14396.27 | -94.10 | -0.65 |
| Russell 2000 | 207.79 | +1.18 | +0.57 | |
| IBD 50 | 39.18 | -0.10 | -0.25 | |
Last Update: 1:10 PM ET 2/10/2022 |
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Volume rose on the NYSE and Nasdaq compared with the same time on Wednesday.
Stock Market Today: A Big Rise In CPI
The consumer price index came in hotter than expected in January, as both the CPI inflation rate and the core rate, excluding food and energy, hit new 39-year highs. With inflation likely close to a near-term peak, the focus is now on month-to-month prices increases, which failed to moderate as predicted.
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 strips out 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%.
"Another month, another blowout inflation number," Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a report. "7.5% inflation is extremely high, and it is going to continue to further pressure the Federal Reserve to raise interest rates and begin the tightening process."
The news sent the yield on the 10-year Treasury note up 6 basis points to 1.99%. That's the highest since August 2019.
Corporate Earnings Are Bullish But Fail To Lift Stock Market
Walt Disney beat analyst forecasts for the fiscal first quarter ended Dec. 31. Theme park revenue bounced back, while Disney+ subscriptions topped expectations. The stock gapped up more than 5% and is back above a still-falling 50-day moving average.
As Covid restrictions ease and people spend more on eating out and traveling, Disney's streaming subscriber growth has stalled from its pandemic surge. However, that also means that its theme parks have been busier.
Disney earnings per share surged 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.
"Our domestic parks and resorts achieved all-time revenue and operating income record despite the Omicron surge," CEO Bob Chapek said in an earnings call with investors.
MGM, BAM Post Strong Earnings
Las Vegas-based 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.
Wall Street forecast MGM earnings of one cent per share on sales of $2.772 billion, FactSet said. Shares fell 1%.
Brookfield Asset Management blew past its buy point of 61.57 off a double-bottom pattern. The shares gained 8% on Thursday after the company beat earnings forecasts. The company posted distributable earnings of $1.3 billion for the quarter and $6.3 billion for the year, a 49% increase compared to last year.
The investment firm's CEO, Bruce Flat, also said the company is weighing the possibility of separating part of its asset management business either in the public or private market, according to MarketWatch.
BAM shares hold an IBD Composite Rating of 75 and a Relative Strength Rating of 87.
Market Rally Sells Off On Hot Inflation, 'Dramatically' More-Hawkish Fed
Mattel, Twilio And Datadog Beat Earnings
Mattel led the upside of the stock market as the toy giant broke through its buy range Thursday, jumping 9.5%, following strong fourth-quarter results late Wednesday.
The consumer spending play is in a double-bottom base with a 23.28 buy point, based on its daily chart and MarketSmith chart analysis.
Twilio surged 7% after fourth-quarter revenue blew past estimates. Twilio — whose tools enable app developers to embed voice, text messaging and video into their products — also forecast profitability on an adjusted basis by 2023. Current-quarter revenue guidance was well above views.
Datadog sprang 15% after its fourth-quarter earnings and revenue breezed past estimates, and 2022 revenue guidance also topped expectations. An expanding partnership with Amazon Web Services contributed to an 84% sales surge for the enterprise software maker. The stock is forming a double-bottom base with a 186.38 entry.
Innovator IBD 50 ETF gained 0.3%.
Follow Michael Molinski on Twitter @IMmolinski
