Dow Jones, S&P Reverse Lower As Nasdaq Pares Gains

The Dow Jones Industrial Average finished lower to start the first week of fourth-quarter earnings season. The blue chip index was down 0.3% at closing bell on Monday after rising nearly 1% earlier today. It remained above its 50-day moving average.

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The S&P 500 also reversed lower and closed 0.1% lower. It had risen above its 50-day line today but closed below it. The Nasdaq led with a 0.6% gain and backed off after approaching the 50-day line. The small-cap Russell 2000 finished higher by 0.2% though it also gave up much of its gains.

Volume rose on the NYSE and fell on the Nasdaq, according to preliminary data.

Several stocks topped buy points but some faded below the entries. Modine (MOD) and Amkor (AMKR) still held up and volume was good. Modine is in a buy zone from a buy point of 22.23. Amkor is in a buy zone from a cup base’s buy point of 29.20.

SLB (SLB) fell back slightly from its buy point of 56.14. Volume was weak. Oil and gas drilling services company Halliburton (HAL) broke out of a cup-with-handle base and buy point of 40.09.

The Innovator IBD 50 ETF (FFTY) was up 0.2% at close of day.

Crude oil rose 1% to trade at $74.80 a barrel. The yield on the benchmark 10-year Treasury note fell 5 basis points to 3.55%.

According to the latest data from S&P Global Market Intelligence, real GDP rose to 2% in 2022.  Strong numbers from trade and inventories in November resulted in above trendline GDP growth in the second half of the year.

Joel Prakken, co-head of U.S. economics at S&P Global Market Intelligence, said, “An emerging risk is that the economy remains stronger for longer than previously anticipated, requiring a more aggressive and persistent monetary tightening to prevent higher inflation from becoming entrenched.”

A mild recession remains a strong possibility in the first half of 2023.

Stocks Moving Today

Shares of Uber (UBER) rose nearly 4% after an upgrade to overweight from Piper Sandler analyst Alexander Potter. The new price target is 33. Uber is forming a base with a buy point of 31.92.

Also up after an analyst upgrade was Oracle (ORCL). It got an overweight rating from Piper Sandler analyst Brent Bracelin, with a price target of 104, up from 85. Shares rose nearly 1% in today’s session. The stock’s relative strength line is also at a 52-week high.

Elsewhere, Regeneron Pharmaceuticals (REGN) was down over 7% and is on pace for its largest decline since March 20, 2o20. In its preliminary update, Eylea sales of $1.5 billion were lower than FactSet estimates of $1.64 billion.

Caterpillar (CAT) is in a buy zone from a cup-with-handle base and buy point of 238. CAT is on IBD Leaderboard.

Bed Bath & Beyond (BBBY) popped over 20% with strong volume even as bankruptcy haunts the home goods company. Shares, however, are trading below 1.70. Earnings are due Tuesday.

Commercial leasing stocks have been breaking out. McGrath RentCorp (MGRC) broke out of a flat base with a buy point of 100.40 Friday and is back below the buy point today. H&E Equipment Services (HEES) reversed lower but is still in a buy zone after a breakout past 47.27.

Retail stocks Macy’s (M) and Lululemon (LULU) fell over 7% each after warning about dismal holiday season sales.

Earnings On Deck For Dow Jones Stocks

Commercial Metals (CMC) reversed lower after strong earnings today. Shares are in a buy zone after the stock found support at the 10-week moving average.

On Friday, Dow Jones leaders JPMorgan Chase (JPM) and UnitedHealth (UNH) will report earnings before the open. JPM is approaching a buy point of 138.76 in a flat base. UNH is well below its 50-day line.

Please follow VRamakrishnan @IBD_VRamakrishnan for more news on the stock market today.

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