Dow Pares Losses; Techs Rise; Nordstrom, Gap Crash

The Dow Jones Industrial Average closed near break-even in today’s stock market after paring an earlier loss. Stocks drifted higher and traded off their lows as both the S&P 500 and Nasdaq managed to reverse higher. Tech and growth stocks led on the upside on Wednesday after this week’s sell-off.


Stock Market Today

At the close, the tech-heavy Nasdaq was up around 0.4% as techs regained strength. The Dow Jones industrials traded down less than 0.1% after paring larger losses from earlier. Meanwhile, the S&P 500 traded up 0.2% and the small-cap Russell 2000 index gained just over 0.1%.

Early data showed volume ran lower on the Nasdaq and on the NYSE vs. the close on Tuesday. Markets will be closed on Thursday for the Thanksgiving Day holiday and will close early on Friday at 1 p.m. ET.

Positive economic news kicked off the trading day on Wednesday as the Labor Department said weekly jobless claims fell to 199,000. That marked the lowest level since 1969 and was well below Econoday estimates for 264,000 claims. This figure also came in below the prior week’s 268,000 filings.

The Federal Reserve’s November meeting minutes, also released on Wednesday, showed an important shift in members of the Federal Open Market Committee. “The Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee’s objectives,” according to the minutes.

Dow Jones Stocks: Nike Faces Supply-Chain Issues

As for Dow Jones stocks, Visa (V) outperformed with a gain of over 2%. Shares of the credit card and debit card transaction processing company have struggled in recent months as shares have fallen below both their 50-day and 200-day lines.

Elsewhere, Nike (NKE) pared an early 2% loss to break-even after finding support at its 21-day exponential moving average. On Tuesday, shares fell 1.6% on news that the athletic shoe and apparel giant canceled some orders until summer 2022 due to supply-chain issues.

Dow Jones stocks leading on the downside included Honeywell (HON) and Goldman Sachs (GS), with losses of over 1.5% each.

Retailers Sell Off On Earnings

After a series of retailers reported strong earnings in recent weeks, including Macy’s (M), Kohl’s (KSS) and several others, Nordstrom (JWN) and Gap (GPS) both sold off Wednesday after disappointing reports.

Nordstrom sank over 29% in heavy volume after the department store’s Q3 earnings came in below expectations. Cowen lowered its price target to 27 from 35, according to Barron’s, saying Nordstrom could face challenges in winning back shoppers.

Elsewhere, Gap plunged 24% in very heavy volume after the retailer reported disappointing Q3 results. Gap also cut its full-year guidance due to significant supply-chain constraints.

Growth Stocks To Watch

The growth-focused Innovator IBD 50 ETF (FFTY) gained 2.5% on Wednesday, outperforming the major indexes and regaining all of Tuesday’s losses. The ETF found solid support at its 200-day line after losing support at its 50-day and 21-day exponential moving averages earlier this week.

Stocks boosting the index included IPO leaders Roblox (RBLX) and On Holding (ONON).

Swiss running shoe company On Holding rose close to 8% on Wednesday as shares moved out of a recent 5% buy zone after pulling back to this area. The stock initially cleared a 39.90 cup with handle entry on Nov. 16 after a power earnings report. On Holding is also part of the leading apparel and shoe retailer industry group, which ranks No. 33 out of the 197 IBD groups.

Roblox, currently on the IBD Leaderboard Watchlist, rose over 8% and remains well extended from a 103.97 buy point of a consolidation pattern cleared on Nov. 9.

Meanwhile, Pure Storage (PSTG) jumped over 13% in heavy turnover as it gapped back above a 27.58 buy point of a cup-with-handle base. Shares initially broke out in early November, but failed to gain momentum and move beyond the buy zone. Shares are now extended from the buy area, which topped out at 28.96.

Strong earnings fueled Pure Storage’s move higher as the maker of high-speed storage systems reported adjusted Q3 earnings of 22 cents a share on revenue of $562.7 million. The company handily beat FactSet’s estimates for EPS of 12 cents on revenue of $531 million. Subscription services revenue grew 38% to $187.8 million.

Follow Rachel Fox on Twitter at @rachelgfox more Dow Jones and stock market commentary.


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