The U.S. stock market pared its gains in afternoon trading on Tuesday. The clues slipped after a report on Twitter that two rockets hit a town in Poland.
The Nasdaq composite jumped 2.5% at noon but pared its gain to 0.6% at 1:40 p.m. ET. The earlier 1.5% gain in the S&P 500 was almost entirely gone.
The S&P 500 is approaching the 200-day moving average. The line has been a resistance level for the index, especially in April and August. Watch how the S&P handles the next test of the line, which is still down.
The 4000 level is another important benchmark for the S&P 500. The index encountered resistance there on Friday and Monday. While breaking above it today, the index was below 4,000 in afternoon trading.
The Dow Jones Industrial Average reversed down 0.5%.
The indices fell sharply after a report on the Faytuks News Twitter account said two rockets hit the town of Przewodow in Poland, on the border with Ukraine. Two people were killed, according to the report.
There has been no confirmation from US news agencies. The Wall Street Journal earlier reported that Russian missiles hit parts of Ukraine. Oil prices jumped on the news.
Walmart, Home Depot Revenue Report
Dow Jones component walmart (WMT) widened a gap, gaining 7% after beating premarket sales and profit estimates. The world’s largest retailer by revenue saw same-store sales jump 8.2% and also raised its forecast. Walmart surpassed its previous best day on July 7, 2020, when it jumped 6.7%, according to Dow Jones Market Data.
Another major Dow retailer, Home deposit (HD) beat earnings and sales expectations for the quarter ended October and reaffirmed its outlook. The stock reversed up almost 1%.
The small-cap Russell 2000 jumped 2.1%.
Lincoln Electric (LECO) comes out of a cup base without a handle, but the volume on the welding system maker is light. The buy point is 148.60.
Volume increased on the NYSE and Nasdaq from the same time Monday.
In other good news for the economy, the producer price index (PPI) for October rose by 8% on an annual basis and by 0.2% compared to the previous month. Both readings were smaller than economists expected. Core wholesale prices, which exclude food and energy, rose 6.7% year on year and were flat from September, according to the Bureau of Labor Statistics.
The report offers more evidence that companies are losing pricing power in a slowing economy, says Bill Adams, chief economist for Comerica Bank.
“But even after the good news from the PPI inflation report, the Fed is likely to take a pretty hawkish tone in its decision next month,” Adams said. “Home heating costs will be significantly higher this winter than last winter, which could be behind the rise in consumer inflation expectations signaled by the New York Fed survey released yesterday. Inflation expectations from the University of Michigan survey have also risen over the past two months, reports.”
The yield on the 10-year Treasury fell 6 basis points to 3.8% in afternoon trading.
Stock market gets a boost from Chinese stocks
Chinese stocks contributed to the US stock market rally.
The iShares MSCI China ETF (MCHI) jumped 5.1% and the KraneShares China Internet ETF (KWEB) jumped 9.4%. The Shanghai Composite closed up 1.6% while the Hong Kong Hang Seng rebounded 4.1%.
President Joe Biden and Chinese leader Xi Jinping are meeting in Indonesia in hopes of improving a frayed relationship between the two countries. The initial reaction from both sides was optimistic.
The Innovator IBD 50 (FFTY) ETF rose 1% after lagging the stock market earlier.
Flexible LNG (FLNG) exceeded earnings and revenue expectations amid strong demand in the liquefied natural gas market. Still, the stock slid more than 7% in big volume. Flex LNG still forms a cup base with a buy point of 37.09.
Fleas are also boosting the stock market
Lattice Semiconductor (LSCC) led the IBD 50, jumping 6.7% to the highest price since January. Susquehanna raised the price target from 72 to 75.
Lattice and other chip stocks appear to rise following news that Warren Buffett Berkshire Hathaway (BRKB) made its first purchase of Taiwan semiconductor (TSM). Taiwan Semi gained 12%.
The Philadelphia Semiconductor Index rebounded nearly 4%.
Still in the IBD 50, steelworker Tenaris (TS) exceeds the buy point of 34.19 of a cup base with handle. Medspace Holdings (MEDP) regained a buy point of 231.10.
On the other hand, the lithium producer Livent (LTHM) slipped 7% in heavy volume. Other lithium stocks also fell.
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