Tuesday, May 24, 2022

Stock Market Falls As Russia Sours On Peace Talks; Oil Prices Climb; Yields Fall

The stock market fell Wednesday after Russia downplayed hopes of progress in peace talks and intensified attacks in Ukraine. Oil prices climbed back near $108 a barrel.




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The S&P 500 fell 0.4%. If the losses hold, the S&P 500 would end a four-day win streak. The Nasdaq composite lost 0.6%. The Dow Jones Industrial Average dropped 0.2%. The small cap Russell 2000 index fell 0.6%.

Volume fell on the NYSE and Nasdaq compared with the same time on Tuesday.

A Russian official dismissed talk of a breakthrough in peace talks with Ukraine. Russian forces today continued shelling Kyiv, even after a Russian official said Tuesday it would dramatically reduce military operations near Ukraine’s capital.

Ukraine President Volodymyr Zelenskyy said today that Russia is sending in new troops.

US Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35220.49 -73.70 -0.21
S&P 500 (0S&P5) 4609.83 -21.77 -0.47
Nasdaq (0NDQC ) 14531.68 -87.96 -0.60
Russell 2000 (IWM) 210.35 -1.36 -0.64
IBD 50 (FFTY) 40.05 +0.04 +0.10
Last Update: 12:00 PM ET 3/30/2022

US crude oil rose 3.8% to $108 a barrel, after it fell briefly below $100 on Tuesday. The Energy Select SPDR ETF (XLE) jumped 1%, leading all S&P sectors.

Big Oil also gained Wednesday, led by Netherlands-based Shell (SHEL), which jumped 4%. Shell’s American depository receipts are close to a breakout from a flat base entry of 56.23. Exxon Mobil (XOM) and Chevron (CVX) also gained.

In another side-effect of the Ukraine conflict, Germany’s economy minister said the country took the first step in a contingency plan that aims to protect against reductions in Russian gas deliveries. The first step is a formality, and for now Russian supplies continue, the minister said.

Yields Continue To Fall Despite Stock Market Losses

The 10-year Treasury yield fell again on Wednesday, dipping to 2.37%. The two-year Treasury yield inched up to 2.35%. On Tuesday, the 10-year yield fell 8 basis points, briefly inverting below the two-year yield. An inverted yield curve is considered by many investors and economists as a precursor to a recession.

Among major US stock market movers, Lululemon Athletica (LULU) gapped up 10% to the highest price since early January after the workout apparel company beat profit expectations. But sales for the January-ended quarter were slightly below views. Lululemon stock is recovering from a 43% plunge from November through mid-March.

Upscale furniture chain RH (RH) fell more than 12% in heavy volume. The company beat profit expectations, but its full-year sales forecast disappointed.

Micron Technology (MU) jumped to a gain of 3.5% as the market opened but then retreated to trade flat, failing to regain the 50-day moving average. The memory-chip maker beat analysts’ estimates for its February-ended quarter and guided higher for the current period. Micron is forming a double-bottom base.

BioNTech (BNTX) rose 5% after paring gains following a strong earnings report and bullish full-year guidance. The company, which makes a Covid-19 vaccine with partner Pfizer (PFE), also announced a $1.5 billion share buyback.

Staffing And Real Estate Stocks Hold Onto Gains

Staffing companies Robert Half (RHI) and ASGN (ASGM) dipped slightly below their buy ranges today, but managed to hold onto most of their gains from the previous day. Both RHI and ASGN had passed buy points yesterday after completing cup-with-handle patterns.

Similarly, real estate companies Brookfield Asset Management (BAM) and REIT Essex Property Trust (ESS) held in their buy zones after crossing their respective buy points yesterday off cup-with-handle patterns.

The Innovator IBD 50 ETF (FFTY) rose 0.2%. Nvidia (NVDA) fell 2% in heavy trading but remains higher for the week.

Energy, mining and agricultural stocks bounced back in the IBD 50. MP Materials (MP) gained 5.5% and was back in the profit-taking range. CF Industries (CF) rose 1.9%.

Ahead of Friday’s jobs report, the ADP estimate of job growth showed an increase of 455,000 jobs in March, vs. a revised 486,000 in February. The March number was above the consensus forecast for 438,000 new jobs. The ADP report is a precursor to the Labor Department’s report, which is expected to show an increase of 438,000 in private payrolls. The stock market will be watching that headline Friday morning.

Also this morning, the final fourth-quarter GDP revision came in with a 6.9% increase. That’s slightly lower than the 7% in the previous estimate.

Follow Michael Molinski on Twitter @IMmolinski

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