The stock market pulled back in midday action Wednesday as investors rethought higher-than-expected consumer price data, leaving major indexes mixed as the Nasdaq tried to stay positive.
Released before the open, September wholesale prices rose 0.5% on a month-over-month basis vs. the expected 0.3% rise, and down from a 0.7% gain in August. Year over year, the price gain was 2.2% vs. the 1.7% consensus from economists. That was up slightly from the revised 2% in August.
September core prices that exclude food and energy rose 0.3% month over month, meeting expectations. That was slightly above the August 0.2% reading. Year over year, core prices increased 2.7% — higher than the 2.1% forecast and down slightly from 2.2%.
Stock Market Action
The Nasdaq gave back some gains but still eked out a 0.1% rise on the stock market today. The Dow Jones Industrial Average deteriorated to a 0.3% loss, while the S&P 500 fell 0.2%. Meanwhile, the small-cap Russell 2000 weakened to a 0.6% loss.
The Nasdaq is trading near its 50-day moving average while the S&P 500 is climbing back toward its 50-day line. That comes as the Dow is testing its 200-day moving average.
Volume rose on the New York Stock Exchange and fell modestly on the Nasdaq, compared with Tuesday's trading at the same time of day.
The Invesco QQQ Trust exchange traded fund, which tracks the Nasdaq 100, added 0.1%. The Innovator IBD 50 ETF reversed course and edged lower 0.4%.
The Federal Open Market Committee is due to release minutes from its September meeting at 2 p.m. ET.
AI Defense Stock Hits A Buy Point
Booz Allen Hamilton stock gained 1.1% and broke out of a cup base after hitting a 125.19 buy point, according to MarketSmith pattern recognition. The defense consulting firm announced on Wednesday it is expanding its artificial intelligence capabilities used by the federal government.
"We are focused on safely, responsibly, and quickly bringing real AI solutions to the federal government using explainable, trustworthy technology," said John Larson, Booz Allen executive vice president.
The stock is on pace for a nine-day rally off the bottom of the cup base in heavy volume. The IBD 50 stock hit a 52-week high on Wednesday, while its relative strength line hit a 52-week high on the weekly chart.
Taser maker Axon Enterprise gained 0.5% and tapped the 217.61 buy point of a cup-with-handle base. The IBD 50 stock is on pace to rise for its sixth straight session.
Palo Alto Networks trimmed earlier gains and shed 0.1% after tapping the 258.88 buy point of an irregular base. The cybersecurity stock hit an all-time high Wednesday. Its relative strength line hit a 52-week high.
Dow Jones component Amgen spiked more than 4% in heavy volume and nestled into a 5% buy zone. Its entry point was 268.24 out of a cup-with-handle base.
Stock Movers: Drug Stock Jumps
Exxon Mobil gapped down more than 4% in huge volume after the company announced it will buy Permian shale giant Pioneer Natural Resources. The all-stock deal is worth $59.5 billion. Exxon stock fell back below its 200-day line. PXD stock rose 0.9% on the news, as it sits in a flat base with a 245.23 buy point.
Elsewhere on the stock market, Swing Trader stock Novo Nordisk popped more than 5% in heavy volume. The Danish drug giant said it ended a Phase 3 test early that examined whether its diabetes drug Ozempic could treat kidney disease.
The study was halted after an independent group determined the drug proved effective. Shares of Eli Lilly also jumped more than 3% in sympathy with NVO stock as it has a similar diabetes drug. LLY stock was the biggest gainer in the S&P 500 Wednesday.
Meanwhile, kidney dialysis provider DaVita gapped down more than 18% in huge volume on the Novo kidney drug news. DVA stock was the S&P 500's biggest loser on Wednesday. Fellow dialysis stock Fresenius Medical Care tumbled more than 18%, while health care product maker Baxter International sold off more than 10% on the news.
Futures: Indexes At Key Levels With Inflation Data Due
Other Stock Market Action: Auto Stock Taps Buy Point
Shares of automaker Stellantis rallied 3% and hit a buy point of 20 out of a cup-with-handle base. STLA is in the buy zone reaching to 21. That followed news the company would team up with Korea-based Samsung to build a second battery plant in Indiana. Meanwhile, the IBD 50 stock's relative strength line hit a 2-week high.
Take-Two Interactive Software eased from larger gains and advanced 0.5% after Raymond James upgraded the stock to outperform from market perform with a price target of 170.
Dow Jones component Walgreens Boots Alliance rose 0.9% in heavy trading after the pharmacy retailer named Tim Wentworth as it new chief executive to start on Oct. 23.
Bearings manufacturer Timken fell 1.4% after Bank of America downgraded TKR to underperform from neutral.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
