The major stock market indexes held their morning gains in afternoon trading on Wednesday, and held near the highs of the day. Investors are seeing a mild day after yesterday's massive sell-off, the worst day since June 2020.
The Nasdaq added 0.7%, while the S&P 500 gained 0.4%. The Dow Jones Industrial Average inched up 0.2%. Small caps held their own, with the Russell 2000 index up 0.3%. The major indexes remain below their 50-day moving averages after sinking below them yesterday.
Stock Market Squeezes Out Small Gains, Gas Sees Strength
NYSE volume was down 1.3% and Nasdaq volume was up 0.4%, compared to the same time Tuesday.
The Nasdaq 100-tracking Invesco QQQ Trust (QQQ) gained back 0.8%.
Crude oil rebounded 2.4%, trading at $89.41 per barrel. The SPDR Select Energy ETF added 3.3%.
Natural gas gained, up 6.2%, on anticipated tight gas supplies going into winter and a possible railroad strike.
Bitcoin futures lost another 0.2% to $20,180. The yield on the 10-year U.S. Treasury note rose to 3.42%.
Markets project a 74% chance the Fed will raise interest rates by 75 basis points at this month's meeting. And 26% of traders expect a 100-basis-point hike, according to CME Group's FedWatch.
The German DAX stock index lost 1.2%, the London FTSE 100 dipped 1.5% and the Paris CAC 40 trimmed 0.4% to close out the trading day.
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Producer Prices Mostly in line
The August Producer Price Index (PPI) month-over-month change was -0.1%, in line with expectations. The monthly PPI change excluding food and energy was reported at an increase of 0.2%, slightly less than the 0.3% consensus increase.
The year-over-year PPI increase came in at 8.7%, also in line with expectations, with an 8.1% increase (vs. 7.0% consensus) excluding food and energy. The PPI measures prices at the producer level before they are passed along to consumers.
The MBA mortgage applications Composite Index for the week ended Sept. 9 dropped 1.2% versus the prior drop of 0.8%. The purchase Index increased 0.2%, better than the 0.7% decrease the prior week. The Refinance Index showed a drop of 4.2%, an acceleration from the decline of 1.1% the previous week.
Stock Market Gainers And Losers
Moderna stock jumped 6.1% on news that it is open to providing its Covid-19 vaccines to China, and potentially building a vaccine plant in Japan.
Starbucks popped 5.9% on heavy volume after yesterday's release of its Reinvention plan and three-year growth plans at its biennial Investor Day. The company has a low 57 Composite Rating and a weak 43 EPS Rating. The stock gapped up above its 200-day moving average on the MarketSmith chart.
Natural gas company Cheniere Energy rose 7.2% as natural gas saw a strong day. RBC Capital raised its price target to 199 from 184 and maintained its outperform rating. The chart is extended from its latest buy point. The stock is on IBD Leaderboard.
Target Hospitality rose 6%, is trading above its 21-day exponential moving average and got support at the 50-day line. The company is No. 2 in the Leisure-Lodging group, which is ranked No. 118 out of the 197 groups IBD tracks. Target Hospitality specializes in temporary lodging for remote workforces in harsh climates. The company's quarterly sales growth ranged between 46% and 77% in the prior three quarters.
Flex LNG was up 5.9% in heavy volume. Flex LNG is in the Leaderboard IBD 50 Top 10 list.
Oil Stocks Break Out Of Cup-With-Handle Bases
Northern Oil & Gas was up 7.1% and broke out of a cup-with-handle base, hitting the 33.60 buy point, and remains in the 5% buy zone. The company has a Relative Strength Rating of 96, meaning it has outperformed 96% of the stocks in the IBD database.
Analysts expect annual EPS growth of 115% for 2022 and 38% in 2023. Northern Oil & Gas has a high 98 Composite Rating and a 94 EPS Rating. Shares are held 63% by mutual funds, with more adding each quarter. Institutional ownership shows conviction by big money managers, which helps increase stock prices in the long run.
ConocoPhillips was up 5% and also broke out of a cup-with-handle base with a 115.57 buy point. The company has accelerating quarterly EPS growth with an expected annual EPS growth rate of 155% for 2022.
ConocoPhillips boasts a perfect 99 Composite Rating with an acceptable 81 EPS Rating. The company has a 21% return on equity, a measure of financial efficiency.
Hess Oil was up 3.8% and broke out of a cup-with-handle base after hitting the 129.18 buy point. It is in the 5% buy zone.
Stock Market Today: IBD 50 Stocks On The Move
The Innovator IBD 50 ETF recouped 2.9%, holding up better than the major indexes.
Oil company Comstock Resources is up 9.6% and clearing a 21.28 entry. The stock has a 99 Composite Rating and a 97 EPS Rating. Stifel raised its stock price target to 27 from 22 on Monday.
Talos Energy popped 9.2% with the energy group. The stock has a 97 Relative Strength Rating.
Steel stocks are down sharply. Nucor was a big IBD 50 loser, tumbling 10.1% after announcing disappointing Q3 guidance.
