Major stock indexes closed Monday's trading session mixed amid skidding Treasury yields and ahead of a critical Federal Reserve meeting. Trading was low key, but a number of big-name stocks moved higher, including Tesla, McDonald's and ON Semiconductor. Meanwhile, Apple and Nvidia lost ground on the stock market today.
The Dow Jones Industrial Average lagged the other major indexes, as it lost nearly 50 points to finish the day fractionally lower.
The tech-heavy Nasdaq composite had been up nearly 1% early but its gain faded to less than 0.1% by the close. Dexcom jumped more than 5% in an apparent "dead cat bounce" after the stock tumbled more than 40% last week. But Arm lagged as it fell more than 5%.
The benchmark S&P 500 also trimmed gains and finished marginally higher. Both the Nasdaq and S&P 500 were in the red earlier Monday.
Stock Market Today: Small Caps Mauled And These Sectors Shine
Revvity was among the best performers in the S&P, surging more than 9% following a beat-and-raise second-quarter report. Enphase Energy and First Solar were among the laggards.
Meanwhile, the S&P 500 sectors were mostly positive. Consumer discretionary and communication services were strongest while energy and technology lagged.
Bears were mauling small caps, with the Russell 2000 down nearly 1%. The Innovator IBD 50 exchange traded fund fell fractionally.
3:38 p.m. ET
Treasury Yields Fall As Fed, Powell Loom
Treasury yields were lower across the board Monday as investors weighed the implications of the latest Fed meeting. The Federal Open Market Committee meeting is set to take place Tuesday and Wednesday in Washington.
With hopes for a rate cut in September rising, investors will be hoping to see signs central bankers are more confident they can loosen monetary policy.
The CME FedWatch Tool has the likelihood of rates holding steady during this week's meeting at around 95%. It then suggests there is a 90% likelihood of a cut at 25 basis points during the September meeting.
The post-meeting media conference featuring Federal Reserve Chair Jerome Powell could be key to bolstering or hindering trader expectations.
Meanwhile, yields were lower across the board. The 10-year Treasury note fell 3 basis points to 4.17% while the 2-year dipped 1 basis point to 4.38%.
2:12 p.m. ET
ON Semiconductor Rockets
ON Semiconductor was the top performer on the S&P 500 on the stock market today following its latest quarterly report. The company, a key supplier for the auto and industrial markets, saw its stock soar around 13% after topping earnings views.
Earnings fell 28% to 96 cents a share while revenue slumped 17% to $1.74 billion. While this appears disappointing, it was comfortably better than analyst expectations.
The company called for third-quarter earnings of 91 cents to $1.03 a share. The midpoint here was in line with Wall Street expectations for 97 cents during the quarter.
Onsemi stock gapped up in volume that ran way above average. It managed to pop above the 50-day, 200-day and its short-term moving averages in one fell swoop.
The stock now sits nearly 10% above its 50-day moving average, quite the turnaround. Nevertheless, lackluster performance overall is reflected in its IBD Composite Rating of 40 out of 99.
These Stock Market Groups Flex Muscles
There was a mixture of underperformers and overperformers among the 197 IBD industry groups Monday.
Auto manufacturers, shoemakers, travel booking plays and integrated telecom services were among the best performers. Hospitals were also having a positive session.
In contrast, media periodicals, solar stocks, database software firms and dairy products companies struggled on the stock market today. Department stores were also having a challenging day.
12:17 p.m. ET
Abbott Stock Stumbles After Verdict
Abbott Laboratories was off lows for the day, but remained down nearly 1%. It was forced below the 50-day moving average but was back above it at midday.
A jury found it failed to warn that its Similac formula for premature infants increased the risk of a bowel disease, and ordered the firm to pay $495 million. This includes $400 million in punitive damages, which could be reduced or reversed on appeal.
"We strongly disagree with the verdict," an Abbott spokesman told the Wall Street Journal. "We will pursue all avenues to have the erroneous decision overturned."
The verdict comes after Mead Johnson, which is owned by Britain's Reckitt Benckiser, was ordered to pay $60 million in a similar case.
The issue looks like it will be an overhang for both companies, with JPMorgan Chase analysts saying there are almost 1,000 similar lawsuits pending against them.
Stock Market Today: Gambling Stock Eyes Entry
Churchill Downs inched toward a cup-with-handle entry of 146.64, according to MarketSurge analysis.
Last week, the company beat views. EPS popped 29% to $2.89 while revenue climbed 16% to $891 million. The gambling stock is bouncing back after getting support at the 50-day moving average. The relative strength line is also bending higher.
Funds have been net buyers of late, with its Accumulation/Distribution Rating coming in at A-.
Virco Manufacturing is eyeing a cup-base entry of 17.83. The furniture maker holds an IBD Composite Rating of 94 out of 99.
Earnings are a key weakness here, with its EPS Rating sitting at 38 out of 99. However it is the top 2% of issues in terms of price performance over the past 12 months.
10:55 a.m. ET
Dow Jones Today: McDonald's Earnings Miss
Breakfast was a surprisingly happy meal for McDonald's investors on the stock market today. Shares rallied more than 3% despite the firm serving up disappointing earnings. Earnings per share fell 6% to $2.97 while sales held virtually steady at $6.49 billion. Both were worse than analysts expected. Same-store sales fell 1%, also below views. But the company did reaffirm its outlook.
McDonald's has been trying to lure lower-end consumers back to its stores by offering value meals. The fast-food behemoth has already moved to extend the initiative beyond the initial four-week run time.
Walt Disney also outperformed, rising more than 1% following the strong weekend performance of superhero film "Deadpool & Wolverine."
3M, Honeywell International and Chevron lagged in the Dow Jones today.
Magnificent Seven: Analysts Bullish On Tesla, Nvidia
The so-called Magnificent Seven were moving higher on the stock market today following some bullish Wall Street calls. One of the components, Tesla, surged more than 6% after it was named a "top pick" by Morgan Stanley auto analyst Adam Jonas.
"While Tesla is still making cars, we note the company is aggressively redeploying incremental resources, technology, people and capital away from the auto side of the house," Jonas said in a note to clients.
The move allowed Tesla stock to pop back above its 21-day exponential moving average. Ford, which lost its top-pick status, fell nearly 2%.
Cantor Fitzgerald reiterated its overweight rating on fellow Magnificent Seven stock Nvidia. The price target here is 175. The hot AI stock is currently trading around 114, below its 50-day moving average, MarketSurge analysis shows.
Elsewhere in the Mag Seven, Google-parent Alphabet rose more than 1% while Meta Platforms, Amazon.com[ticker symb=AMZN] and Microsoft were up less than 1% each.
Apple was down slightly despite TD Cowen reiterating a buy rating on the stock and raising its price target to 250. It is a crunch week for the Mag Seven, with Apple, Meta, Amazon and Microsoft all set to report earnings.
Outside Dow Jones: This Stock Eye Entry
A highly rated stock was eyeing a potential buy point on the stock market today.
Victory Capital is eyeing a cup base entry of 54.94 on the stock market today. Earnings performance is strong here, with Victory's Earnings Per Share Rating at a solid 90. Earnings are due in three days, though.
An approach highlighted by Investor's Business Daily is to use options as a strategy to reduce risk around earnings. It's a way to capitalize on the upside potential of a stock's move around earnings, while reducing the downside risk.
Big Money has been snapping up Victory shares of late, with the stock's Accumulation/Distribution Rating sitting at B-.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
