Major indexes finished lower in the stock market today, with the Dow Jones Industrial Average falling further below the 50-day moving average as yields continued to climb. Salesforce plunged after the company released its April quarter results after the close.
On Wednesday, the Fed's Beige Book showed a modest increase in economic activity in most districts from early April to mid-May. But higher interest rates and inflation curbed business activity to some extent. Higher prices pressured margins for certain industries such as restaurants, although in manufacturing those moderated while businesses in general saw consumers resist price increases.
The Beige Book, an overview of economic activity in the 12 Fed districts, will be part of the rate decision when the Fed meets June 11-12.
On Friday, the Personal Income and Outlays report for April will be released. According to Econoday, the personal consumption expenditure price index is seen rising 0.3% month on month while remaining unchanged at 2.7% annually.
The Dow saw a loss of 1.1% Wednesday, while the S&P 500 fell 0.7%. All 11 S&P sectors declined, the first time that's happened since April 30, according to Dow Jones Market Data. The Nasdaq fared slightly better and pulled back 0.6%.
Breadth Poor In Stock Market Today
Volume fell on the NYSE and rose on the Nasdaq, according to preliminary data. Decliners outnumbered advancers by about 5-to-1 on the New York Stock Exchange, while on the Nasdaq losers were nearly three times more than advancers.
The small-cap Russell 2000 closed 1.5% lower. The index broke support at the 50-day line. The Innovator IBD 50 ETF held a loss of 0.9% at the close.
Crude oil fell slightly to $79.23 a barrel as traders expect OPEC+ to extend its production cuts for the next quarter on Sunday.
The yield on the benchmark 10-year Treasury note jumped 8 basis points to 4.62%, adding to Tuesday's 7-point increase. Investors appear to be growing nervous that rate cuts will be pushed back more than expected. Traders expect the target fed funds rate to stay unchanged in the next Fed meeting, according to the CME FedWatch Tool. Chances of a rate cut in September stand at 41.7%.
Dow Jones And Health Care Stocks
Salesforce rose modestly in regular trading but remained below the 50-day moving average ahead of its fiscal first quarter earnings report after today's market close. Shares slid 15% in extended trading after the report came out.
Dow component UnitedHealth Group fell nearly 4% and undercut the 50-day moving average. At a conference, CEO Andrew Witty cited concerns that Medicaid reimbursements are squeezing managed-care providers and the problem may persist for multiple quarters. With pandemic emergency measures falling off, states are paring back on enrollments.
Other health insurers, such as Centene and Molina Healthcare, also fell sharply. IBD's managed-care industry group was the fourth-worst performing today, down 3.1%.
Merck fell 0.1% after news that it has entered into a stock deal to buy Eyebiotech that values the privately held company at as much as $3 billion. Merck stock is in a flat base with a buy point of 133.10.
Apple was one of the few gainers in the Dow, up 0.2% after paring gains.
In energy news, ConocoPhillips fell 3% and undercut its 200-day moving average after it announced it is buying Marathon Oil for $22.5 billion in stock. Marathon shares surged 8.5%.
Abercrombie & Fitch soared 24.3% after the fashion retailer reported fiscal first quarter results. Abercrombie was the best-performing stock in the IBD MarketSurge Growth 250 today.
Futures Fall As Dow Giant Plunges Late; Nvidia Closes In On Apple
Earnings Movers In Stock Market Today
In leisure services, recent new-issue Viking reported Q1 results and beat both sales and earnings views. Sales of $718 million were higher than expectations. However, shares fell 3%.
Pure Storage reported Q1 revenue of $694 million and gave a sales outlook of $755 million for the current quarter, above views of $753 million. Shares soared over 7% in after hours trading.
Cava reversed higher and closed with a 7% gain after beating views for its first quarter. Lower traffic and slowing same-store sales growth pressured the stock in morning trading. But buyers came into the stock after the first half-hour of trading.
Tesla was slightly lower as shareholders vote on CEO Elon Musk's pay package. Shareholders will also vote on getting the electric-vehicle company incorporated in Texas rather than in Delaware.
Online pet products seller Chewy soared 27% after first quarter results were released. The company also announced a $500 million stock buyback plan. Shares gapped back above the 200-day moving average, according to IBD MarketSurge.
American Airlines plunged 14% after the airline cut its sales and earnings outlook for the current quarter.
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