The Dow Jones Industrial Average traded lower along with the major stock indexes Friday as debt-ceiling talks stalled. Dow Jones stock Nike lagged badly, down in sympathy with Foot Locker, which fell sharply after earnings. Early gainers in the Dow Jones included technology stocks Cisco Systems and IBM, along with Merck.
Small caps faded after a strong start, with the iShares Russell 2000 ETF down 0.7% after rising 0.8% intraday.
According to the Associated Press, Rep. Garret Reaves, picked by House Speaker Kevin McCarthy to lead the debt-ceiling talks, said negotiations had become "just unreasonable."
Deere soared in the early going but reversed lower, despite a strong earnings report and rosy outlook. DE stock remains on a downtrend. The stock's 200-day moving average around 395 is a potential resistance level to watch.
In a fireside chat at the Thomas Laubach Research Conference, Federal Reserve Chairman Jerome Powell said the Fed remains committed to getting inflation down to 2%. He also said the banking system remains sound.
WTI crude oil futures started off strong but faded to flat just below $72 per barrel. Occidental Petroleum opened solidly higher but pared gains after an SEC filing showed that Warren Buffett purchased another 3.46 million shares of OXY stock for $200 million. That brings his stake in the oil giant to just over 24%.
Other strong gainers in the oil patch included EOG Resources, Pioneer Resources and APA.
Outside the Dow Jones
The Nasdaq composite, up more than 3% so far this week, delivered outperformers, including CrowdStrike, Regeneron and Adobe Systems.
Start Trading Options With An Edge: OptionsTrader By IBD
After surging above its 50-day moving average Thursday, Workday extended gains ahead of next week's earnings report.
Semiconductor stocks were under mild selling pressure, weighed down by weakness in Applied Materials, which reported earnings late Thursday. AMAT stock surged out of an eight-week cup base ahead of the results. AMAT stock was down 2.5% midday. The VanEck Semiconductor ETF gave back 0.7%.
Google parent Alphabet got a modest lift after the Wall Street Journal reported that Samsung will not switch its default search engine from Google to Microsoft's Bing.
The S&P 500 turned lower after topping the 4,200 level and is up 1.6% so far this week. The Dow Jones also reversed lower and is up 0.3% for the week
Advancing stocks outnumbered decliners on both exchanges by less than 2-to-1.
Bond Yields
The 10-year Treasury yield turned flat after hitting an intraday high of 3.72%, up 2 basis points.
Odds for another rate hike at the June meeting were on the rise. But the market has shifted back to an 84% chance that the Fed will leave the federal funds rate right where it is at 5% to 5.25%.
The Dow Jones and stock market remain in a confirmed uptrend, although market breadth was curiously weak Thursday. Advancing stocks barely beat decliners on the Nasdaq despite a 1.5% gain for the Nasdaq composite and a 1.8% gain for the Nasdaq 100. On the NYSE, breadth was less than 2-to-1 positive.
The S&P 500 still shows six distribution days since April 20. Higher-volume declines can impede a stock market rally. But out of the six distribution days, only two showed a decline of more than 1%.
So, what's most important now?
The stock market tide is flowing positive amid a bumper crop of technical breakouts. Just take a look at daily charts for Rambus, Lam Research and Axcelis Technologies in the semiconductor group.
Inside the MarketSmith Growth 250, solar firm Array Technologies moved closer to the top of an 18-week consolidation, rising more than 4% early. But gains faded.
China EV maker Li Auto continues to perform well after surging more than 20% last week. The daily chart shows support holding at the 10-day moving average after an orderly pullback.
Please follow Ken Shreve on Twitter at IBD_KShreve for more stock market analysis and insight.
