The major stock market indexes strengthened slightly in the last hour of trading, but posted losses to close out Wednesday's session. Investors remained patient in the stock market today despite no resolution again in the debt ceiling negotiations.
The May FOMC meeting minutes were released Wednesday afternoon, but didn't seem to affect stock market action.
"Several participants noted that if the economy evolved along the lines of their current outlooks, then further policy firming after this meeting may not be necessary," reported the minutes of the FOMC May 2-3 meeting.
Meanwhile, the sticking point in the debt ceiling talks appears to be government spending.
"You have to spend less than you spent last year. That's not that difficult to do," House Speaker Kevin McCarthy told reporters Wednesday. Republicans and Democrats have just eight days to figure it out, before the government runs out of money to pay some of its obligations.
The Dow Jones Industrial Average closed 0.8% lower, while the Nasdaq was down 0.6%. The S&P 500 lost 0.7%. The iShares Russell 2000 ETF fared worse, falling 1.1%.
NYSE and Nasdaq volume both fell vs. the same time Tuesday, in preliminary numbers.
The Nasdaq 100-tracking Invesco QQQ Trust ETF edged 0.5% lower. The Innovator IBD 50 ETF fared better than the major indexes, falling 0.4%.
Crude oil rose 1.3% to $73.87 per barrel. Gold futures shaved 0.7% and remained below the psychological $2,000 level. Bitcoin, meanwhile, was down 3.5% to $26,260.
The 10-year U.S. Treasury yield added 2 basis points to 3.72%. The CME FedWatch tool shows over 70% odds for no rate hike at the June Fed meeting. The remainder of Fed watchers expect a quarter-point hike.
Watch on Friday for the April personal income and outlays numbers at 8:30 a.m. ET. The Personal Consumption Expenditures (PCE) part of the report is closely watched by the Federal Reserve and is a factor in its policy decisions.
The consensus shows April PCE rising 0.4%, according to Econoday. Estimates show April personal income rising 0.4% and the monthly PCE Price Index rising 0.3%.
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Action In The Stock Market Today
IBD 50 stock Tecnoglass sank 4.7% in heavy volume, sending it below the 50-day line and triggering a sell signal.
The specialty glass and window stock sold off May 17 after announcing a secondary offering of 2 million shares of its stock at a price of $43 per share. TGLS was the biggest loser today on the IBD 50 list of top growth stocks.
Dow Jones industrial average component Visa was down 1%, adding to Tuesday's 2.9% loss, as financial stocks sold off. The stock is below its 50-day line, a warning sign.
Similarly, Mastercard retreated 1.4% in weak volume, falling below both its 50-day moving average and its 369.25 buy point of a double-bottom base.
Security software stock Palo Alto Networks rose 7.7% after the company reported stronger-than-expected April-quarter earnings and sales, which were in line with views. PANW stock's relative strength line hit a 52-week high as shown by the blue dot on MarketSmith charts.
Most Retail Stocks Shine
Among retail stocks, Urban Outfitters gapped up 17.6% in heavy volume after the clothing chain reported a beat on fiscal Q1 2024 top and bottom lines. Comparable sales increased 5% over the prior year, while inventories decreased 6.3%.
Urban Outfitters stock is in a buy zone of 29.84 to 31.33, after topping a buy point. Its relative strength line hit a 52-week high, a sign of stock market leadership.
Retailer Kohl's popped 7.5% but trimmed larger gains after reporting a profit for Q1. Revenue was higher than expected, although down 3.3% from last year's same quarter. Comparable sales fell 4.3%, while inventories decreased about 6%.
"While there is still work to be done and the macroeconomic environment remains challenging, we are affirming our 2023 guidance and continue to have conviction in Kohl's longer-term opportunity," said CEO Tom Kingsbury.
Abercrombie & Fitch soared 31.1% in heavy volume after the apparel retailer posted an unexpected adjusted Q1 profit of 39 cents. Analysts were looking for a 1-cent loss. Sales grew 3% over the prior year, while inventories dropped 20% year over year. The stock gapped up and retook the 50-day line.
But Lululemon Athletica sank 2.6% and dove deeper below its 50-day line. Its move in the stock market today triggered the 7% sell rule from the 371.36 buy point of a cup-with-handle base.
LULU stock started its descent following Foot Locker's earnings release Friday, when it lowered guidance. LULU reports Q1 earnings June 1.
Analog Devices sank 7.8% after the chipmaker's guidance was weaker than expected. Analog Devices stock gapped below its 50-day moving average, undermining a base it's been forming for eight weeks. ADI was the biggest loser among S&P 500 stocks today.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
