The stock market reversed early gains, yielding minor losses into Tuesday's noon hour. Investors are cautiously positive and sitting on high levels of cash, as earnings start to trickle in. Big bank earnings varied, with polar opposite results from industry leaders. Dow component Travelers took big losses after winter storms.
The January Empire State manufacturing index came in at a dismal -32.9 vs. -8.1 after December's -11.2 reading. The low number flashes a recessionary sign.
The New York Fed surveys manufacturing executives about how busy they are, their views of the future, commodity prices and their input on inflation. The Fed and the market watch the results for inflation signals.
The S&P 500, Nasdaq and Russell 2000 posted minor losses. The Dow Jones Industrial Average fell more than 1%. Volume on the NYSE and Nasdaq was marginally higher vs. the same time on Friday.
Mixed January Signals
Major indexes have posted gains to start the year, with small caps leading the charge, up over 7% so far in January. 2023 "Value stocks" are in favor after losing their growth status during 2022's bear market. Major themes could take more time to evolve, suggesting continued caution but a positive outlook.
The Dow is holding above its 50-day and 21-day exponential moving averages. The S&P 500 found support Friday at its 200-day moving average and Nasdaq remains above its 50-day line.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF gained 0.1%.
Crude oil jumped 0.5% above the $80 level, at $80.27 per barrel.
Bulls are watching for a run toward the $100 psychological level while keeping an eye on Ukraine. The war could heat up as we approach the spring months. The Energy Select Sector SPDR ETF was unchanged. Natural gas rallied 6.5% but is still below $4 per million British thermal units.
The 10-year Treasury note yield added 2 basis point to 3.52%. Odds for a 25-basis-point hike at the February Fed meeting rose to 93.2%. That would take the fed funds rate to the 4.5%-4.75% range, according to the CME Group FedWatch Tool.
The Innovator IBD 50 ETF was unchanged.
European stock markets were mixed, with the German DAX up 0.4% and Paris CAC 40 up 0.5%. The London FTSE shed 0.1% in afternoon trading.
Stock Market Movers: Gaming Stock Pops, Insurance Stock Tanks
Dow Jones component Goldman Sachs dropped 7.5% after missing Q4 top and bottom-line estimates. Investment banking fees fell 48% compared to the same quarter in 2021, due to lower equity and debt underwriting revenue. The paltry results represent the largest miss in 10 years. The bank stock is the Dow and S&P's biggest loser today.
The banking stock is in a double-bottom base and pulling back from the 378.66 buy point. A new base emerged from a cup-with-handle base after hitting a high 389.58 in November. Shares found support at the 50-day moving average. GS is on pace for the largest percent decrease since January 18, 2022, when it fell 6.97%.
Travelers also weighed on the Dow, as morning losses mounted, down 6.1% after big losses from December's winter storms. The property and casualty insurer plummeted below the 21-day, 50-day and 200-day moving averages, all at the same time.
Morgan Stanley rocketed 6.3% in heavy volume after reporting better-than-expected Q4 EPS and sales.
The investment banking and wealth management firm raised their provision for credit losses to $87 million from $5 million in the prior year. The stock has been trading in a long choppy base with support at its 50-day line. It leads the S&P 500. The company pays a hefty 3.4% annualized dividend yield to shareholders.
Gaming and entertainment stock Roblox popped 13% in heavy volume after reporting December bookings that beat expectations.
Cloud business solutions provider CDW rose 1.2% and broke out of a long cup-with-handle base, hitting the 197.10 buy point on the MarketSmith chart.
Futures: Market Rally Pauses As Tesla Jumps
Stock Market Movers: Payment Stock Up On Upgrade
Tesla gained 5.2% even though several analysts reduced price targets.
Payment technology provider Global Payments rose 3.3% after Morgan Stanley upgraded the stock to overweight from equal weight and raised its price target to 135 from 124.
Chinese e-commerce company Alibaba gave back early morning gains, down 1.6% after activist Ryan Cohen put the heat on Alibaba to speed up and boost its share-repurchase program.
Crypto-Related Stocks Rebound With Bitcoin
Bitcoin futures popped 8.7% to $21,250.
Cryptocurrency-related exchange Silvergate Capital popped over 9%, despite missing Q4 EPS in a 27% year-over-year decline. Management pointed to the industry going through a "transformational shift." It reported a $1 billion loss, above analyst estimates.
Cryptocurrency fintech company Coinbase popped 4.1% as bitcoin posted another strong day.
