The Dow Jones Industrial Average turned positive in midday trading Monday, following last week's big rally in the major indexes. The S&P also turned slightly positive while the Nasdaq remained lower.
Dow Jones Today
At around 12 p.m. ET, the Dow Jones Industrial Average rose 0.1% while the S&P 500 gained 0.2%. after erasing losses. Small caps also showed gains, with the Russell 2000 up 0.8%. The S&P 500 gained a strong 6.5% for the week, its second-biggest weekly gain this year and its first weekly gain since the end of May. The Dow rose 5.4% for the week.
The tech-heavy Nasdaq composite saw a 7.5% advance last week, leading the upside, but is struggling to turn positive on Monday. Volume was higher on the Nasdaq and on the NYSE vs. the same time on Wednesday, according to IBD data.
While solid progress was made last week, the indexes still have many hurdles to clear. Namely, the 10-week moving average remains an overhead point of resistance the indexes are all close to touching.
Pending Homes Sales Rise In May
Pending home sales, released at 10 a.m. ET rose 0.7% on a month-over-month basis in May, according to the National Association of Realtors. According to Mortgage News Daily, the average on the 30-year fixed mortgage hit a high of 5.64% in the first week of the month, but then fell to 5.25% later in the month. This pullback may likely account for the sales gain in May, which broke a six-month streak of declining demand. However, pending home sales were down more than 13% from May of 2021.
On Wednesday at around 9 a.m. ET, Federal Reserve Chairman Jerome Powell is expected to participate in an economic policy panel discussion before the European Central Bank Forum on Central Banking. Powell's comments could have an effect on the market.
Leading In The Dow Jones
Oil stock Chevron led the upside in the Dow Jones industrials Monday, as shares rose 2.6%. The oil giant is up after a few weeks of major losses.
Among S&P 500 sectors, the energy sector led by a wide margin. Energy Select Sector SPDR climbed 3.5% as it attempts to break a two-week downtrend. The price of U.S. crude oil reversed higher on Monday, rising over 1% to $108.72 a barrel.
Merck was also among stocks leading the upside, with a gain of over 2%, according to MarketSmith analysis. Shares moved above a 95.02 flat-base entry while the stock's RS line is near a new high. Shares of the Dow Jones leader gained over 10% last week.
Fellow medical stock UnitedHealth also led the Dow, rising 2%. Shares rose as the managed care stock is trying to break out above a 507.35 double-bottom buy point. UnitedHealth has finally gained a firm footing above its 50-day moving average, while its RS line also hit a new high on Monday.
Dow Jones Leader Nike Falls Ahead Of Earnings
Dow Jones giant Nike is trading lower while it gears up to report fiscal fourth-quarter results after the market closes. Wall Street expects Nike earnings per share to fall 13% to 81 cents a share with revenue down 2% to $12.07 billion. The athletic-wear giant has faced a number of headwinds over the past few quarters, including pandemic shutdowns in its Vietnam operations, where it makes 80% of its footwear and half its apparel.
The Dow Jones component declined nearly 2% to 110.75 after the market opened on Monday, cutting into the modest gains it made last week. Shares remain below a declining 50-day line and are close to eclipsing a 22-month low of 103.46 on May 26. The stock has plunged from a record 179.10 on May 5.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
