Stock Market Sees Pockets Of Strength; Hotel Stocks Jump
The major stock market indexes faded in the final half-hour, and closed mixed to end the session. Chinese stocks remained in a slump after a strong start to the day.
The S&P 500 was off 0.4% and the Nasdaq fell 1.4%. But the Dow Jones Industrial Average rose 0.1%. The Russell 2000 small-cap index lost 0.7%.
The S&P 500 remains below its 50-day moving average. The Dow is above its 50-day line but finding resistance at its 21-day exponential moving average.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF (QQQ) lost 1.4%. Volume on the NYSE and Nasdaq was higher vs. the same time on Friday, according to preliminary data.
Crude oil pulled edged up 0.2% to $79.74 per barrel. The Energy Select Sector SPDR ETF (XLE) popped 1.1%. Natural gas regained 2.2% and is trading above $5 per million British thermal units.
Bitcoin futures gave back 1.1% to $16,595. The 10-year Treasury note yield gained 10 basis points to 3.85%.
European markets closed higher, with the German DAX adding 0.4% while the Paris CAC 40 gained 0.7%. The London FTSE 100 rose 0.1%.
Odds for a 25-basis-point hike by the U.S. Federal Reserve at the February meeting stand at 63.7%. such an increase would take the fed funds rate to the 4.5%-4.75% range. Meanwhile, 36.3% are looking for a 50-basis-point hike, according to the CME Group FedWatch Tool.
October’s Case-Shiller home price index came in better than expected, down 0.5% vs. the consensus estimate for a 1.2% decline. This added to September’s 1.2% drop, and makes for a year-over-year increase of 8.6%.
China Loosens Restrictions; Hotel Stocks Benefit Reopening
Chinese authorities said the country would end its incoming travelers’ mandatory quarantine beginning on Jan. 8. Restrictions on the numbers of passengers and international flights will also be lifted. The news gave hotel and gaming stocks a lift.
Hotel and gaming giant Wynn Resorts (WYNN) gapped up 4.5% and led the S&P 500. The bump pushed the stock above its 21-day exponential moving average. Las Vegas Sands (LVS) also gapped up 4.2% and is back above its 21-day line. The companies have casino operations in Macao. Las Vegas Sands holds the fifth spot in IBD’s gaming and equipment industry group, while Wynn is seventh.
Solar parts manufacturer Daqo New Energy (DQ) reversed lower 0.6% as solar stocks fell broadly. Solar product component maker JinkoSolar (JKS) also retreated from earlier gains, down 0.4%, adding to Friday’s 6.7% drop.
Nio (NIO) was a big Chinese loser, down 8.3% on news it is cutting its Q4 deliveries forecast, citing Covid-related production and deliveries plus supply-chain issues.
Stock Market Movers: Drug And Airline Stocks Plunge
Caterpillar (CAT) gained 1.4% and is in the 5% buy zone of a flat base from a buy point of 239.95 to 251.95. The heavy equipment maker is a Dow Jones leader today and helped the index outperform. The stock received interest after getting mentions in Reddit’s Wallstreetbets discussion board.
Moderna (MRNA) plummeted 9.5%, sending it below its 21-day line and below the 188.75 buy point. This is the third day of losses in a row for the vaccine and drugmaker. MRNA broke out of a cup-with-handle base mid-December, following positive midstage clinical trial news on its skin cancer vaccine. Shares have been choppy since that breakout, which is now looking bad.
Southwest Airlines (LUV) plunged 6% after the carrier canceled about 3,000 flights on Monday, for a total of almost 8,000 canceled flights from Thursday to Monday. The Department of Transportation called the cancellations “disproportionate and unacceptable.” While airlines in general encountered weather-related problems, Southwest got hit harder.
IBD 50 Movers: Shoe Stock Above The Profit Zone
The Innovator IBD 50 ETF (FFTY) dipped 0.4% and was in line with the S&P 500 Index.
Mobileye Global (MBLY) rose 1% as shares are starting to consolidate. The stock returned to the stock market on Oct. 26. The Israeli company is the dominant supplier of camera-based technologies used in self-driving-car systems. The company is looking to lead the autonomous-vehicle market.
Lattice Semiconductor (LSCC) was the IBD 50’s big loser, down 3.6% in light volume. Shares of the power-management chipmaker are below the 21-day line.
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