The Nasdaq staged a lackadaisical rebound in the stock market today, up just 0.1%, while other key indexes soured after initial modest gains. In general, Wall Street firms left few clues that they're either eagerly buying or selling stocks. Meanwhile, institutions crept slowly back into long-dated U.S. Treasuries.
Notable events later this week include more earnings reports as well as a speech slated for Friday at 10:05 a.m. ET by Federal Reserve Chair Jerome Powell at the annual summit of central bank heads in Jackson Hole, Wyo. Watch for stock market action to intensify on Friday during what is normally a slow trading month.
According to Cboe data, the yield on the benchmark 10-year government bond rose initially to as high as 4.36% before dipping to 4.32%. When buyers bid the price of bonds up, the yield coming from fixed interest payments (known as the coupon) goes down.
Inside the IBD 50, only four of the 50 stocks moved in volume higher than their respective average over the past 50 sessions.
They included Zurn Elkay Water Solutions, a relative newcomer to the list of elite growth stocks, and manufacturing sector leader Modine Manufacturing.
Zurn Elkay has made a strong rebound off its March low of 19.29, rising as much as 60% to a year-to-date high of 30.87, before cooling off the past few weeks. ZWS is still trading above its climbing 50-day moving average. Watch for a potential test of buying support at or near the 50-day line. Modine has expanded its gain from a 26.90 buy point in a nearly three-month cup without handle to more than 65%.
Meanwhile, Microsoft gained for the second day in a row, edging up 0.2% to 322.46 in below-average turnover. The Dow Jones Industrial Average component joined three other members of the 30-stock average with gains of 1 point or more.
Microsoft: Part Of The Nasdaq Vanguard
At the day's high of 326.08, the stock traded 11% below its 52-week peak of 366.78. The member of the so-called Magnificent Seven stocks also claims a stout year-to-date gain of almost 35%.
The daily chart also shows Microsoft rising sharply off its low during Friday's market sell-off. Such a reversal could indicate the stock is trying to bottom out.
Keep in mind, however, that Microsoft stock has remained on the defensive since sellers yanked shares in the cloud computing, computer and gaming hardware, and enterprise software titan below the 50-day moving average in heavy turnover on July 27. Strong stocks tend to travel on the north side of their 50-day lines, not the south side.
Also, MSFT has not yet made a successful challenge of resistance at an important short-term technical level, the 21-day exponential moving average.
Wall Street analysts on consensus see the Redmond, Wash.-based company's earnings rising 12% in the current fiscal year (ending in June 2024) to $10.98 a share. In the September fiscal first quarter, Microsoft is expected to earn $2.65 a share, up 13%, on a 9.8% rise in revenue to $54.46 billion.
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Beyond The Nasdaq
Meanwhile, the S&P 500 edged down 0.3%, similar to the Russell 2000's decline. The S&P 500 had rallied just 0.4% during the first 15 minutes of trading. The broader NYSE composite index reversed from a small early gain to also fade 0.3%, vs. a 0.5% drop by the Dow Jones Industrial Average.
The NYSE composite took out its 50-day moving average last week. In doing so, it also frittered away solid gains for the third quarter.
Amid news of S&P downgrading the credit ratings of a handful of regional banks — including Comerica and small-cap lender UMB Financial — financial stocks within the Dow Jones helped paced the decline. Travelers, American Express, Goldman Sachs and JPMorgan Chase lost 1 to 3 points each. Chase closed below its 50-day line for the first time in two months.
Volume on the Nasdaq ran virtually flat vs. the same time on Monday and 5% lower on the NYSE.
Looking at IBD's 197 industry groups, beaten-down homebuilders got a reprieve from heavy selling lately as 30-year fixed mortgage rates have recently climbed past 7.4%. The residential and commercial building group rose 1.8% on a price-weighted basis, according to early data.
Also up 1% or more on Tuesday: telecom cable and satellite equipment, up 1.6%; coal and computer networking, up 1.3%; computer hardware and peripherals, as well as cement and concrete, up 1.1%; and travel booking, up 1%.
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A New Retailing Winner
Beyond the Nasdaq, China-based Miniso Group deserves attention. Shares in the global chain of discount and variety stores gapped bullishly higher at the open and rallied 9.8%. Volume jumped 149% above average. Such heavy-volume buying points to accumulation by professional fund managers.
Miniso posted a 131% vault in June-quarter earnings to 25 cents a share. That marked the third quarter of triple-digit profit growth in four quarters. The operator of more than 5,200 shops across 80 countries also ended a sales slump as the top line grew 16% to $430.1 million.
In the prior three quarters, Miniso saw sales dip 10%, 5% and 17% vs. year-ago levels.
NYSE-listed MNSO has now gotten well-extended past the 5% buy zone after toying with its 19.49 breakout point from a four-month consolidation pattern. The 5% buy zone goes up to 20.46.
Dick's Falls Hard
On the downside, Dick's Sporting Goods plunged more than 24% and hit a session low of 110.06. That decline erased nine months' worth of upside progress. Volume shot 18 times its usual level to 19.2 million shares, or 32% of its total float (freely traded shares) of 58.9 million shares.
The sporting goods retailer posted a disappointing 23% drop in fiscal third-quarter profit to $2.82 a share, even though sales picked up 5% to $2.84 billion. The company cited challenges with organized retail crime in hurting both profit and inventories.
Dick's CEO Lauren Hobart noted that organized shoplifting activities by mobs of thieves is an "increasingly serious issue impacting many retailers," MarketWatch reported.
DKS stock had been building a relatively shallow base for at least five months with a 152.61 proper buy point. However, prior to earnings, the stock had yet to break out and trigger an entry.
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