Dow Breaks Support Ahead Of Fed Report; Tesla Shareholders Vote On Elon Musk’s Pay Package| Investor’s Business Daily
Major indexes remained lower on the stock market today as fears of inflation resurfaced ahead of a key Fed report. The Dow Jones Industrial Average fell further below the 50-day moving average in afternoon trades Wednesday as yields surged. Tesla (TSLA) fell as shareholders vote on two key matters, while C3.ai (AI) fell ahead of its results after the market close.
X
Investors awaited the Fed’s Beige Book, which will contain anecdotal evidence of economic activity in the 12 Fed districts. The findings will be key to rate decisions made during the Fed meeting on June 11-12.
X
The Dow’s loss remained at 1%, while the S&P 500 fell 0.6% in the stock market today. All 11 S&P sectors declined, the first time that’s happened since April 30, according to Dow Jones Market Data. The Nasdaq fared slightly better and pulled back 0.5%.
Volume on the NYSE and on the Nasdaq was lower compared with the same time on Tuesday. Decliners outnumbered advancers by 8-to-1 on the New York Stock Exchange, while on the Nasdaq they were nearly three times higher than advancers.
The small-cap Russell 2000 dropped further and was 1.4% lower in afternoon action. The index broke support at the 50-day line. The Innovator IBD 50 ETF (FFTY) held a loss of 0.8% in the stock market today.
Crude oil fell slightly to $79.23 a barrel as traders expect OPEC+ to extend its production cuts for the next quarter on Sunday.
The yield on the benchmark 10-year Treasury note jumped 9 basis points to 4.63%, adding to Tuesday’s 7-point increase. Investors appear to be growing nervous that rate cuts will be pushed back more than expected. Traders expect the target fed funds rate to stay unchanged in the next Fed meeting, according to the CME FedWatch Tool. The Beige Book is due to be released at 2 p.m. ET.
Dow Jones, Health Care Stocks
Dow component UnitedHealth Group (UNH) fell nearly 5% and undercut the 50-day moving average. At a conference, CEO Andrew Witty cited concerns that Medicaid reimbursements are squeezing managed-care providers and the problem may persist for multiple quarters. With pandemic emergency measures falling off, states are paring back on enrollments.
Other health insurers, such as Centene (CNC) and Molina Healthcare (MOH), also fell sharply. IBD’s managed-care industry group is the second-worst-performing today, down 3.1%.
Salesforce (CRM) rose modestly but remained below the 50-day moving average ahead of its fiscal first-quarter earnings report after today’s market close.
Merck (MRK) eased 0.1% after news that it has entered into a stock deal to buy Eyebiotech that values the privately held company at as much as $3 billion. Merck stock is in a flat base with a buy point of 133.10.
Apple (AAPL) was one of the few gainers in the Dow, up 0.8%.
In energy news, ConocoPhillips (COP) fell 4% and undercut its 200-day moving average after it announced it is buying Marathon Oil (MRO) for $22.5 billion in stock. Marathon shares surged 8% at midday.
Abercrombie & Fitch (ANF) soared 22% after the fashion retailer reported fiscal first-quarter results. Abercrombie was the best-performing stock in the IBD MarketSurge Growth 250 today. It’s on pace for its best day since Aug. 23, 2023, when it rose 23.5%, according to Dow Jones Market Data.
Earnings Movers In Stock Market Today
In leisure services, recent new-issue Viking (VIK) reported Q1 results and beat both sales and earnings views. Sales of $718 million were higher than expectations. However, shares fell 3.5%.
Cava (CAVA) erased losses and was nearly 2% higher after beating views for its first quarter. Lower traffic and slowing same-store sales growth pressured the stock in morning trading.
Tesla was slightly lower as shareholders vote on CEO Elon Musk’s pay package. Shareholders will also vote on getting the electric-vehicle company incorporated in Texas rather than in Delaware.
Earnings are due today for three enterprise software stocks: UiPath (PATH), Nutanix (NTNX) and C3.ai. Among computer data storage stocks, Pure Storage (PSTG) remained extended ahead of first-quarter results after the market close.
Online pet products seller Chewy (CHWY) soared after first-quarter results were released. The company also announced a $500 million stock buyback plan. Shares gapped back above the 200-day moving average, according to IBD MarketSurge.
American Airlines (AAL) plunged 15% after the airline cut its sales and earnings outlook for the current quarter. It’s on track for its worst day since June 11, 2020, when it fell 15.5%.
Please follow VRamakrishnan on X/Twitter for more news on the stock market today.
YOU MAY ALSO LIKE:
IBD Live: Learn And Analyze Growth Stocks With The Pros
Learn How To Time The Market With IBD’s ETF Market Strategy
Find The Best Long-Term Investments With IBD Long-Term Leaders
MarketSurge: Research, Charts, Data And Coaching All In One Place
