The stock market closed strong Wednesday, with the major indexes near the day's highs. A meeting on federal debt ceiling talks gave investors hope for a resolution, pushing indexes up more than 1%.
Negotiators seemed to reach some common ground, as the White House called Tuesday's meeting "productive and direct." House Speaker Kevin McCarthy also used similar verbiage, calling the meeting "a little more productive."
President Joe Biden sounded optimistic, saying a deal will be reached and that "America will not default." His comments appeared to give Wall Street a boost.
The Dow Jones Industrial Average gained 1.2% and the Nasdaq rose 1.3%. The S&P 500 also added 1.2%. The Russell 2000 fared better than the major indexes, pulling ahead 2.3%.
NYSE and Nasdaq volume rose vs. the same time on Tuesday, in preliminary numbers.
The Nasdaq 100-tracking Invesco QQQ Trust ETF rose 1.2%, highlighting continued Big Tech resilience. The Innovator IBD 50 ETF lagged with a 0.1% increase.
Crude oil rallied 2.7% to $72.76 per barrel. Gold futures shed 0.3% and traded below the psychological $2,000 level. Bitcoin added 1.8% to $27,460.
The 10-year U.S. Treasury yield added 3 basis points to 3.58%. The CME FedWatch tool shows over 70% odds for no rate hike at the June Fed meeting.
Stock Market Movers: Olive Garden Stock Hits Buy Point
Olive Garden parent company Darden Restaurants rose 3.6% and hit the 156 buy point of a flat base, but in light volume. Shares are in a buy zone stretching to 163.80.
Darden posted improved quarterly earnings and sales growth in its latest quarter vs. the previous quarters. The stock may be one for your watchlist. Its IBD Composite Rating got an upgrade to a high 96 from 94.
Dynatrace remained volatile. It added just 0.6% amid heavy volume despite better-than-expected fiscal Q4 earnings and sales plus Q1 and full-year revenue guidance that exceeded estimates.
The IBD 50, Leaderboard and IBD Sector Leaders stock is in a cup base with a 48.10 buy point. Its relative strength line hit a 52-week high on the weekly chart, as indicated by the blue dot on MarketSmith pattern recognition.
On Holding sold off 7.6% in heavy volume, on top of Tuesday's 9.7% slide. The company reported stronger-than-expected Q1 earnings Tuesday, but investors focused on comments for a lower growth rate in the second half of this year.
The stock plunged below its 50-day moving average in heavy volume, a sell signal. ONON also gave back profits as it fell below its 20% profit target from a 24.21 buy point.
Retired tennis star Roger Federer has been the face of the running-shoe company. William Blair downgraded the Swiss-based footwear and athletic apparel stock to a sell from a hold rating, and lowered its price target to 26 from 29.
Electronic testing stock Keysight Technologies catapulted 7.7% after a beat on second-quarter results.
Other Stock Market Movers: Axcelis Hits Buy Point
Axcelis Technologies popped 6% and topped the 136.48 buy point of a cup-without-handle base. It is in the 5% buy zone to 143.30. The move was on lighter-than-average daily volume, however.
Shares hit an all-time high, while the relative strength line hit a 52-week high. ACLS has gained 73% this year so far. Axcelis makes components used to make semiconductors.
Broadcom rose 2.5%, hit the 648.60 buy point of a flat base and is in a 5% buy zone to 681.03. The company submitted a proposal to address the European Union's antitrust concerns over its $61 billion VMware acquisition bid, according to Reuters. AVGO stock hit a 52-week high on Wednesday's move. It is trading at the highest price since Jan. 4, 2022, according to Dow Jones Market Data.
TJX Cos. rose 0.9%. The company today reported better-than-expected earnings per share, but a miss on first-quarter sales. The discount home and apparel retailer posted pretax profit margin of 10.3%, higher than expected, and up from 7.5% last year.
Shares are in a flat base with an 83.23 buy point and have been wavering around the 21-day exponential moving average.
Target rose 2.6% in heavy volume after the retailer reported a beat on its April-quarter sales and profit. But Target noted higher inventories and increased theft in its earnings release, sounding a cautious outlook.
Regional bank Western Alliance popped 10.2% after reporting its deposits have increased by $2 billion in the second quarter. The jump lifted the stock above its 50-day moving average for the first time since early March, right before the banking crisis erupted.
The SPDR S&P Regional Banking ETF gained 7.4% on the news. The ETF had its best day since Jan. 6, 2021, when it gained 7.8%.
Tesla Stock On The Move
Tesla gained 4.4% after the EV giant hosted its annual shareholder meeting Tuesday night. CEO Elon Musk hinted at two new products, and said it will have a Cybertruck delivery event this year. The company may start advertising its products.
The stock is below its 50-day line and about 45% off its 52-week high.
April housing starts came in at an annualized rate of 1.401 million vs. the 1.405 million Econoday consensus, while permits issued came in at 1.416 million vs. the 1.430 million projected.
The Mortgage Bankers' Association mortgage applications Composite Index for the week ended May 12 fell 5.7% vs. an increase of 63.3% the prior week.
The Purchase Index dipped 4.8% for the week vs. a 4.8% rise in the previous week.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
