The Dow Jones Industrial Average rallied after Federal Reserve chairman Jerome Powell turned market whisperer once again. Microsoft founder Bill Gates said Tesla CEO Elon Musk could make Twitter worse if he completes his takeover. Ride-share stocks Uber and Lyft crashed.
Meanwhile a trio of stocks attempted breakouts amid the bullish late action. International Money Express tested an entry on earnings while Phillips 66 and Exxon Mobil also passed buy points.
Volume was up on both the Nasdaq and the New York Stock Exchange, according to preliminary data.
Meanwhile, the yield on the benchmark 10-year Treasury note slipped 4 basis points to 2.92%. It briefly passed the 3% mark for the first time since 2018 earlier in the session. Oil spiked higher as the EU muses over banning Russia imports. West Texas Intermediate crude rose more than 5% to almost $108 per barrel.
Fed Chair Powell Soothes Interest Rate Fears
The Federal Open Market Committee ended its latest meeting by announcing a half-point interest rate increase. The rate hike will push the federal funds rate to a range of 0.75%-1%.
The central bank also unveiled its plan to reduce its balance sheet. It will happen in phases and kicks off June 1, when it will roll off $30 billion of Treasuries and $17.5 billion of mortgage-backed securities. After three months, the cap for Treasuries will increase to $60 billion and $35 billion for mortgages.
Powell once again used his post-meeting news conference to talk investors off the ledge.
One of the key moments was when he told journalists that raising rates by 75 basis points at a time "is not something the committee is actively considering."
Nevertheless, he was once again masterfully able to walk the line between showing he is not afraid to meet the inflation problem head-on.
"Inflation is much too high and we understand the hardship it is causing. We're moving expeditiously to bring it back down," Powell said.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34061.72 | +932.93 | +2.82 |
| S&P 500 | (0S&P5) | 4300.39 | +124.91 | +2.99 |
| Nasdaq | (0NDQC ) | 12964.86 | +401.10 | +3.19 |
| Russell 2000 | 193.55 | +5.06 | +2.68 | |
| IBD 50 | 33.22 | +0.40 | +1.22 | |
Last Update: 4:12 PM ET 5/4/2022 |
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Nasdaq Surges As Small Caps Charge
The Nasdaq surged in good volume, a key ingredient during a rally attempt. It closed up 3.2%. Starbucks was a top performer following its earnings report, rising 9.8%.
The S&P 500 also vaulted, closing up 3%. Paycom stood out here with a gain of nearly 14% after earnings.
The S&P sectors all closed in positive territory. Communication services, energy and technology made the best gains, while consumer staples and real estate performed worst.
Small caps muscled higher as the Russell 2000 ended the day up 2.7%.
Growth stocks also powered back, though gains were less impressive. The Innovator IBD 50 ETF,ticker symb=FFTY], a bellwether for growth stocks, rose 1.2%.
Dow Jones Jumps As Apple Stock Pops
The Dow Jones Industrial Average lagged the other major indexes but still gained more than 900 points. It rose 2.8%.
Apple was among the top Dow performers as it jumped 4.1%. It managed to close back above the key 50-day moving average.
But it was Honeywell International that was the top performing stock on the Dow Jones today. The aerospace stock closed up 4.5%.
Bill Gates Issues Elon Musk Twitter Warning
Gates spoke out on his worries over Musk's plan to buy Twitter.
He said that Musk could "actually could make it worse." Nevertheless, he also pointed out at a Wall Street Journal event Wednesday that the entrepreneur who took his place as the world's richest man is not used to failure.
"I mean his track record with Tesla and SpaceX is pretty mind blowing at putting together a great team of engineers and taking the people who work in those fields in a less bold way and really showing them up," he said. "I kind of doubt that will happen this time, but we should have an open mind and never underestimate Elon."
Gates also raised his concerns about whether his fellow billionaire's emphasis on allowing free speech could aid the spread of misinformation.
Twitter stock closed almost flat while Leaderboard stock Tesla rose almost 5%. TSLA managed to move clear of its 50-day moving average and its 200-day line.
Uber Stock Falls As Lyft Crashes
Ride-sharing stock Uber was smacked lower after the firm posted a massive loss of $3.04 for the most recent quarter. This compares to a six-cent loss the previous year.
Earnings were damaged by big losses on investments in Grab, Aurora and Didi. This overshadowed the fact revenue surged by 136% as the economy recovers from the coronavirus pandemic. The stock remains rooted below its major moving averages.
But Uber's dip was left in the shade by rival Lyft. The stock plunged about 30% on underwhelming Q2 guidance. It gapped down from its 50-day line, which was already shy of the 200-day moving average.
It was also harmed after management said the firm would boost spending to attract more drivers amid surging gas prices.
Stocks Soar As Powell Rules Out Supersize Hikes; What To Do Now
Outside Dow Jones: These 3 Stocks Test Buy Points
International Money Express jumped above its entry from a flat base, though it closed below the 22.08 buy point.
The RS line hit a new high, which is a bullish sign. Institutional investors have been getting behind the stock, with its Accumulation/Distribution Rating coming in at A-. In total, 63% of its shares are held by funds, according to MarketSmith data.
The Florida-based company allows consumers to send money from the U.S. and Canada to 17 countries in Latin America, eight countries in Africa, and two countries in Asia.
Energy giant Exxon Mobil moved clear of a cup-with-handle entry of 89.90. It is actionable as high as 94.40. The RS line is spiking here as well. Exxon has a perfect IBD Composite Rating of 99 thanks to excellent price performance over the past 12 months. The company recently reported first-quarter results, with EPS surging 218%.
Earnings are seen growing 79% in 2022. However, flawed prior performance means it holds an EPS Rating of 73 out of 99.
Oil refiner and marketer Phillips 66 is also actionable after breaking out from a consolidation pattern. The entry here is 93.65. But with the market still in a correction, buying stocks is extra risky.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
