The stock market deteriorated in the final hour of trading and closed near the day's lows Wednesday. Investor enthusiasm for the higher-than-expected GDP wore off as other, weaker, economic data rolled out.
The Fed's November Beige Book showed slowing overall economic activity with auto sales mixed and furniture and appliance sales declining. Travel and tourism remained robust, while transportation services lagged. Meanwhile, manufacturers gave a weaker outlook. Business real estate loans dropped, while office real estate activity remained depressed.
Separately, consumer credit held up, although some banks reported slightly higher delinquencies. The labor market softened but the majority of Fed districts claimed more job applicants, and more workers stayed at their jobs.
The overall economic outlook for the next six to 12 months deteriorated, the Beige Book noted.
Earlier today, third-quarter GDP rose 5.2% on an annualized basis vs. the 4.9% Econoday consensus and up from a 4.9% initial estimate. The third-quarter personal consumption expenditures increased 3.6% vs. the expected 4%.
Stock Market Indexes Give Up Most Gains
Indexes extended a retreat after the Beige Book was released. The Dow Jones Industrial Average gained less than 0.1% while the Nasdaq turned negative and slid 0.2%. The S&P 500 pulled back 0.1% in the stock market today. All three major indexes remained solidly above their 50-day moving averages. The small-cap Russell 2000 outperformed and lifted 0.6%. It breached its 200-day moving average on Wednesday, but met resistance at that level.
Volume rose on the New York Stock Exchange and the Nasdaq Wednesday compared with Tuesday, according to preliminary numbers.
The Invesco QQQ Trust, which tracks the Nasdaq 100, reversed course and dipped 0.1%. The Innovator IBD 50 ETF remained strong and popped 1.3%. And the 10-year Treasury yield shed about 6 basis points to 4.27%.
Stock Market Movers: Insurance Stocks Suffer On Deal News
Cigna tumbled 8.1% and Humana sold off 5.5% on news that the two health insurers are in merger talks, according to The Wall Street Journal. Cigna and Humana both fell below their 200-day lines in heavy volume. The two insurance stocks were the biggest losers on the S&P 500 Wednesday.
UBS Group broke out of a cup base and hit the 26.97 buy point and is in a buy zone. UBS and its relative strength line hit 52-week highs today.
Fluence Energy catapulted 23.8% after the renewable energy storage company posted a surprise September-quarter profit and sales that beat estimates. The company earned 2 cents per share in the September quarter vs. a 36-cent loss in last year's quarter. Sales grew 52%, easing from 124% and 104% in the prior two periods. FLNC gapped up past its 200-day line.
General Motors gapped up 9.4% on news the automaker is planning a $10 billion accelerated stock buyback program and will increase its dividend 33%. GM also gave 2023 operating profit guidance of $11.7 billion to $12.7 billion, reflecting the six-week autoworkers' strike.
The stock jumped past its 50-day line in huge volume and remains below its 200-day line. GM is on track for its largest one-day increase since March 24, 2020, when it rose 19.9%, according to Dow Jones Market Data.
Foot Locker surged 16.1% in heavy trading after the footwear retailer reported better-than-expected third-quarter earnings and sales. Foot Locker bumped up to its 200-day moving average before pulling back.
Intuit surged 2.2% in heavy volume after the TurboTax maker exceeded its October-quarter EPS and revenue estimates late Tuesday. On the downside, the software maker gave current quarter adjusted quarterly earnings and sales below analysts' forecasts.
CrowdStrike Jumps Over 10%
IBD 50 stock CrowdStrike soared 10.4% in heavy trading following the security software developer's higher-than-expected October-quarter profit and revenue. Earnings grew 105% after rising 84% and 106% the prior two quarters. Third-quarter sales grew 35%, trailing the 42% and 37% increases in the prior two periods.
Shares are extended and hit a 52-week high on Wednesday, closing at the highest close since April 14, 2022, according to Dow Jones Market Data.
Another IBD 50 name, Workday, gapped up 11% and broke out of a cup base with a 252.72 buy point. Shares topped the 5% buy zone, which reaches to 265.36. WDAY and its relative strength line hit 52-week highs.
The move came after the human resources software company reported higher-than-expected October-quarter earnings and sales.
Stock Market Action: Okta Sinks After Earnings
NetApp gapped up 14.6% in huge volume and broke out of a double-bottom base, bypassing a 79.95 buy point. The data management stock and its relative strength line hit 52-week highs. NTAP was the biggest gainer on the S&P 500 Wednesday.
Okta fell 2.5% in heavy volume, even after the cybersecurity provider reported a beat on third-quarter profit and sales estimates. Okta, which had a recent data breach, is below its 50-day and 200-day lines. Mutual funds have reduced their shares in the last two quarters, and the stock holds a weak IBD Accumulation/Distribution Rating of D-.
Phillips 66 jumped on reports that Elliott Investment Management has taken a $1 billion stake in the oil refiner and is looking for two seats on the board to make changes to enhance the firm's performance. Shares are in a flat base with a 125.19 buy point.
Berkshire Hathaway Vice Chairman Charlie Munger died Tuesday at the age of 99. Munger had been Warren Buffett's longtime right-hand man. BRKB stock edged 0.4% lower Wednesday.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.