The Dow Jones Industrial Average and other indexes ended the first day of a big retail-earnings week lower. The blue chip index gained 0.6% Monday afternoon but pared back to trade over 0.5% lower at 4 p.m. ET.
On Sunday, Federal Reserve Gov. Christopher Waller said that the pace of rate increases will likely slow, although the end point remains "a ways off" and "depends on inflation." On Monday, Fed Vice Chair Lael Brainard pointed out that she is in favor of a slower pace of rate hikes.
The S&P 500 also gained after it fell nearly 0.2% in early trading but finished nearly 0.1% lower. The Nasdaq composite was the biggest loser. Having lost over 1% in the morning, the tech-dominated index pared some losses in the afternoon but ended over 0.1% lower.
Volume on the NYSE and on the Nasdaq was significantly lower when compared to the same time on Friday.
The small-cap Russell 2000 ended over 1% lower.
Crude oil fell steeply over 3% to $85.27 a barrel.
The yield on the benchmark 10-year Treasury note rose to 3.86% after nose-diving last week. The U.S. dollar regained strength over the weekend as investors realized that interest rate hikes will likely stretch past the first quarter of 2023. The U.S. dollar index rose nearly 0.5%.
Outside Dow Jones: Stocks To Watch and Buy
Pure Storage is trying to break out of a cup-with-handle base and buy point of 32.07. On Semiconductorsis also trying to break out of consolidation at a buy point of 76.88. Pure Storage and On Semiconductors are IBD 50 stocks.
Advanced Micro Devicesgot an upgrade after UBS and Baird analysts Timothy Arcuri and Tristan Gerra upgraded the stock. Both raised the price target to $95 and $100 respectively based on its new data center chip Genoa. Shares cleared their 50-day moving line last week and were up over 1% today.
Tesla CEO, Elon Musk faces court probe on his compensation worth $55.8 billion. The 10 year package was set in place in 2018 and ties Musk's pay to the company's and Tesla stock performance. Shareholders are becoming concerned as the Twitter rout continues and Tesla shares are getting slammed. Musk is expected to testify on Wednesday, according to reports. Tesla shares fell 2.5% in today's market.
Economic Data on Deck
Retail sales and industrial production on Wednesday will show us where the economy is headed after the producer price index and Empire State manufacturing numbers are released on Tuesday. On Thursday housing permits and starts and Friday's new home sales will indicate what is going on in the rapidly cooling housing market. Initial jobless claims, also Thursday, will be on watch after last week's higher number of 225,000, seasonally adjusted.
It is a big week for big box retailers and high growth tech companies.
Dow Jones components Home Depot and Walmart report earnings on Tuesday, and Cisco on Wednesday.
Home Depot is treading cautiously above its 200-day moving average. Walmart has been holding up solidly above its 50- and 200-day lines ahead of earnings. Cisco rebounded from its 50-day line in October and is still below its 200-day line.
Also on tap Wednesday are Target and Nvidia and on Thursday Applied Materials, Palo Alto Networks and BJ's Wholesale Club.
Target and Nvidia are above their 50-day lines and heading toward their 200-day lines. AMAT cleared its key 200-day line in Friday's bullish action. It is testing that level ahead of earnings and is on watch. PANW is building the last leg of a long double-bottom base and may present an early entry at 176.20 if it makes it above its 50- and 200-day lines. The regular buy point is 193.01. BJ's is in a cup base with a 79.79 buy point. Watch for a handle that could allow an earlier entry.
Among energy stocks, IBD 50 stock Flex LNG is on tap with earnings Monday, while Golar LNG follows on Tuesday. FLNG is approaching a buy point of 37.09 and may offer an earlier entry at 35.37 while GLNG is testing its 50-day line and has an entry at 30.76.
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