The stock market pared gains in early trading, after steep declines on Tuesday, as new inflation data on Wednesday showed milder price increases for wholesalers.
Meanwhile, the Dow Jones Industrial Average ticked up 0.4% while the S&P 500 climbed 0.5%. Both indexes plunged roughly 4% Tuesday. The Nasdaq composite strengthened by 0.4% after plummeting 5.2% Tuesday, while the small-cap Russell 2000 fell over 0.3%. Volume was lower on both the Nasdaq and NYSE compared to the same time on Tuesday.
The yield on the benchmark 10-year Treasury surged to 3.46% before settling at 3.42% in early trading. U.S. crude oil rose to $88.39 a barrel, and many energy stocks followed with gains.
Energy Sector Leads Market
Energy stocks are holding up in bases, with a few topping buy points. The weak market outlook, however, means caution for investors.
ConocoPhillips climbed above a buy point of 115.57 from a cup-with-handle base in heavy volume. Northern Oil & Gas broke out above the 33.60 buy point of another cup-with-handle base. Volume was heavy.
SM Energy is up over 5% today and is breaking out past a 47.29 buy point in volume 40% above average.
Devon Energy is near a buy point of 75.37 in a cup-with-handle base. Devon has also gained over 4%.
Warren Buffett stock Occidental Petroleum continues to hover near its buy point of 66.26. The stock is also testing its 50-day moving average.
The Energy Select Sector SPDR ETF ticked up more than 2% and is in a cup-with-handle base with a buy point of 85.28.
The Innovator IBD 50 Fund ETF gained over 1%, easily outperforming the broad market.
IBD 50 stock Pioneer Natural Resources is forming a cup-with-handle pattern with a buy point of 265.97. Shares are up over 4% today.
Dow Jones Reacts To New Inflation Data
The August Producer Price Index showed a 1.2% decline in demand for goods and a 0.4% increase in demand for services. Demand for goods fell 1.7% in July while services demand rose for the fourth consecutive month in August.
Yesterday, the consumer price index eased from July's 8.5% to 8.3% in August, still more than expected. Consumer prices rose 0.1% in August from the previous month, with the food and rent indexes rising by 0.8% and 0.7% even as the energy index fell 5%.
Food prices will likely continue to rise through 2022, though below the price of futures, and ease in 2023, says Morgan Stanley Chief Global Economist Seth Carpenter. He noted that "food price shocks impact consumption up to one year following the shock and inflation up to close to eight months." A 20% supply-driven increase in food price leads to a 1% drop in private consumption, notably in discretionary spending.
In addition, a looming rail strike could also result in continued supply constraints and jack up prices of goods further, says Quincy Krosby, chief global strategist at LPL Financial. Unions representing engineers and conductors were unable to reach an agreement with railroads Tuesday, reports said. Negotiations are scheduled to continue today.
Retail sales numbers are on watch Thursday, along with initial jobless claims followed by Friday's nonfarm payroll and the University of Michigan Consumer Sentiment Index.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31220.36 | +115.39 | +0.37 |
| S&P 500 | (0S&P5) | 3951.94 | +19.25 | +0.49 |
| Nasdaq | (0NDQC ) | 11674.98 | +41.40 | +0.37 |
| Russell 2000 | 182.02 | -0.20 | -0.19 | |
| IBD 50 | 28.06 | +0.38 | +1.37 | |
Last Update: 10:00 AM ET 9/14/2022 |
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Dow Jones Leaders
Dow Jones component Johnson & Johnson is rallying over 2% after it announced a $5 billion share buyback program and confirmed its outlook for full-year earnings of $10.65-$10.75 a share.
And Dow Jones leader Apple gained about 1%. Microsoft erased early gains and was flat.
Outside Of The Dow Jones
Shares of PayPal rose less than 1% after the company got an upgrade. Raymond James analyst John Davis raised the stock to outperform from market perform with a price target of 123 after near-term estimates bottomed and cost-cutting could lead to better earnings.
In July, Bank of America's Jason Kupferberg upgraded the stock to buy from neutral with a target of 114. The upgrade followed Elliot Management taking a 2% stake in the company. PayPal stock remains in a deep decline.
