Investor enthusiasm kept climbing Wednesday as major indexes piled on gains amid further evidence that inflation is on the wane. The Dow Jones Industrial Average led major indexes, surging into the close.
The Dow added 163.51, amounting to a 0.5% rise for the blue chip index and its fourth straight up session. The benchmark S&P 500 index ticked 0.2% higher, adding to Tuesday's big gap-up. The tech-heavy Nasdaq composite dipped into negative ground earlier, but turned it around and edged fractionally higher.
Before the opening bell, the Bureau of Labor Statistics said the Producer Price Index fell 0.5% for October from September, well below estimates for a 0.1% rise, and was the largest monthly decline since April 2020. The index rose 1.3% year over year. Core prices excluding food and energy were unchanged month to month, and up 2.4% on an annual basis.
Economists consider the index a key measure that markets sometime rely on more heavily than the Consumer Price Index to get a gauge on inflation. On Tuesday, the Labor Department reported CPI was unchanged for October after increasing 0.4% in September. On an annual basis, prices rose 3.2%, cooling off from recent hikes of 4% or more.
Meanwhile, small caps on the Russell 2000 were still feeling the love from Tuesday, as they climbed 0.2%. Coupled with Tuesday's gains, the index has cleared both its 50-day moving average and 100-day line. The index tried to crack the 200-day line earlier in the session but pulled back.
Volume Drops; Treasuries Tick Up
Volume was down Wednesday on both the New York Stock Exchange and the Nasdaq. Advancers led decliners on the two exchanges by roughly a 4-3 ratio.
Together, the two reported more than 230 issues on the stock market reaching 52-week highs and roughly half that amount at fresh lows.
The 10-year Treasury yield was slightly higher to 4.53%. West Texas Intermediate crude oil dropped 2.3% to $76.50 a barrel.
Among exchange traded funds, the Vanguard Mega Cap Index Fund edged 0.2% higher while the IBD Innovator 50 ETF fell 0.4%.
Target Surprises Wall Street; Dow Jones Stocks On The Rise
Target surprised Wall Street with better-than-expected results for its fiscal third quarter and soared nearly 18%. The big-box retailer said earnings were $2.10 a share on revenue of $25.4 billion. Wall Street was looking for earnings of $1.47 a share with sales at $25.3 billion.
In the Dow Jones index, chip giant Intel was among the leaders, climbing 3% as it continued its resurgence off its Oct. 26 earnings. Intel topped the 40.07 buy point of a cup base as its relative strength line hit a new high. Its Relative Strength Rating is 94 out of a best-possible 99.
Walt Disney also basked in its post-earnings glow, as shares also jumped more than 3%. Disney moved solidly above its 200-day moving average Wednesday, after having cracked its 50-day line earlier this month.
There weren't many losers among Dow Jones stocks, as most of the issues were in positive ground. One in negative territory was Salesforce, with a 0.8% drop. CRM stock is trying to hit a buy zone out of a double-bottom base.
Outside Dow Jones: Stocks On The Move
Away from the Dow, ELF Beauty spruced itself up with a gain of 6.6% Wednesday. The cosmetic products maker surged past its 50-day line as investors seem to be emboldened by the company's recent results.
Expedia Group surged through a buy zone as the Thanksgiving travel season approaches. EXPE stock jumped more than 6% and pulled well above its 122.59 buy point out of a cup base.
On the negative side, Global-E Online crashed with a drop of more than 27% in the wake of the enterprise software developer's earnings report. Global-E reported a loss of 23 cents a share, but analysts expected a deficit of 20 cents, according to FactSet. Its plunge was a major drag on the IBD 50 Wednesday.
Breakouts Begin To Fade
Tuesday's bonanza of 30 breakouts in the stock market started to fade. Ten more companies ventured into buy zones earlier in the session but only a handful remained above entries by Wednesday afternoon.
Among the leaders was Arcellx, a biotech that surged more than 5% after scoring a deal with industry giant Gilead Sciences to develop cancer treatments. IBD gives Arcellx a near-best Relative Strength Rating of 98. Gilead had a fractional gain.
Ryanair clung to a buy zone with a 3% surge on high volume. The Irish air carrier continues to climb on the strength of last week's results. They showed a 51% gain in earnings.
But the likes of software developer Palantir Technologies and A.O. Smith, a maker of heating and air conditioning products, slipped back down after venturing into buy zones. A.O. Smith lost 1.3% while PLTR stock was virtually flat.
