The stock market strengthened in midday trading Wednesday as indexes held near session highs. Big box retailer Target gave a cool outlook but shares climbed. Broadcom rallied into the buy zone.
The S&P 500, Dow Jones Industrial Average and Nasdaq composite were up 0.6%. The small-cap Russell 2000 led with a 1.3% increase. Volume fell on the NYSE and rose on the Nasdaq compared with the same time on Tuesday.
The White House called the latest meeting on raising the U.S. debt limit "productive and direct." House Speaker Kevin McCarthy termed the talks "a little more productive."
Meanwhile, House Democrats are planning a long-shot tactic to force a vote on the debt ceiling that bypasses Republican leadership, The Wall Street Journal reported.
A few stocks topped buy points.
Nasdaq-100 semiconductor giant Broadcom surged above the 648.60 buy point of a flat base, though volume was soft. A Barron's article says Broadcom is one of the 10 companies with highest exposure to AI.
SPX Technologies broke out of a cup-with-handle base in heavy trading. And Darden Restaurants is trying to move above a 156 buy point.
Regional banks climbed after Western Alliance Bancorp said deposits grew by more than $2 billion in Q2 so far. Western Alliance jumped 13.5% and SPDR S&P Regional Bank ETF rallied nearly 6%.
Target Posts Mixed Results, Strikes Cautious Tone
Target reported a mixed April quarter early Wednesday, beating profit expectations on sales growth of less than 1% and flat same-store sales. It also gave a cautious outlook, saying consumers continue to cut back on discretionary items and spend more on essentials.
"We came into the year clear-eyed about the challenges consumers are facing, and we were determined to build on the trust we've established with our guests," said CEO Brian Cornell. "It's required agility and the ability to flex across our multi-category portfolio as we lean into value and the product categories our guests need most right now."
Cornell says those efforts led to an increase in guest traffic in Q1. Inventory shrink will reduce the current year's profitability by more than $500 million vs. last year, Cornell said, citing theft and organized retail crime as "increasingly important drivers of the issue."
Target kept its full-year forecast for little change in comparable sales and adjusted earnings of $7.75 to $8.75 per share. But softening sales trends in Q1 left Target with a current-quarter forecast of a low-single-digit drop in comparable sales and EPS of $1.30 to $1.70.
The stock reversed higher and was up nearly 3% in midday trading, poking above the 50-day and 200-day moving averages.
Stock Market Digests TJX, Tesla
In another big retail report, TJX erased most morning gains and was flat at midday.
The parent of HomeGoods, T.J. Maxx and other chains reported mixed results. Earnings of 76 cents per share beat views on 55% growth but $11.78 billion in revenue missed estimates. TJX stock is forming a flat base with an 83.23 buy point.
Tesla shares climbed more than 4% in the wake of yesterday's annual shareholder meeting.
CEO Elon Musk cautioned about a "challenging" next 12 months. He said the EV maker "is not immune to the global economic environment." Musk also teased new products and shot down rumors he could step down.
IBD 50 Lags Stock Market
The Innovator IBD 50 ETF fell 0.3% at midday, with On Holding dragging down the growth fund.
The running-shoe maker continued to tumble after Tuesday's earnings report, which cautioned of a sharp slowdown in growth. The stock slid below its 50-day moving average in heavy volume today, a sell signal.
Tecnoglass gapped down nearly 8% after the maker of window glass products announced a 2 million-share secondary offering at $43 by a big shareholder. The stock closed at 46.76 on Tuesday.
IBD 50 stock Dynatrace was volatile after the maker of network monitoring software beat first-quarter expectations and gave a bullish outlook. Shares continue to form a cup base with a 48.10 buy point.
Homebuilding stocks rallied after April housing starts rose to 1.401 million units. That's up more than 2% from the previous month and in line with forecasts. Building permits fell to 1.416 million from a revised 1.437 million in March. Economists had expected 1.430 million, according to Econoday.
Priscilla Thiagamoorthy, senior economist at BMO Capital Markets, says the data shows the housing market appears to be stabilizing. Limited inventory in the resale market is buoying confidence among homebuilders, she added.
SPDR S&P Homebuilders ETF rose 0.9%.
