The major stock market indexes recouped some of Tuesday's early losses and closed off the lows of the day. The slide, on the first trading day of 2023, added to last year's losses as investors are still uneasy about interest rate hikes and a potential 2023 recession. Tesla fell double digits, to the lowest low in more than two years.
The S&P 500 retreated 0.4% in the afternoon session while the Nasdaq dove 0.8%. The Dow Jones Industrial Average lost less than one percent. The Russell 2000 small-cap index fell 0.2%.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF faded 0.7%.
Volume for the NYSE and Nasdaq was sharply higher vs. the same time on Friday.
Crude oil shed 3.9% to $77.16 per barrel. The Energy Select Sector SPDR ETF dumped 3.5%. Natural gas plunged over 10% and is trading at $4 per million British thermal units.
Bitcoin futures added 0.5% to $16,610. The 10-year Treasury note yield dropped 11 basis points to 3.77%.
European stock markets were higher, with the German DAX up 0.8% and the Paris CAC 40 gaining 0.4%. The London FTSE 100 added 1.4% in afternoon trading.
Odds for a 25-basis-point hike by the U.S. Federal Reserve at the February meeting stand at 69.2%. That would take the fed funds rate to the 4.5%-4.75% range. Meanwhile, 30.8% of market watchers are looking for a 50-basis-point hike, according to the CME Group FedWatch Tool.
The final December purchasing managers' manufacturing index (PMI) came in as expected at 46.2, unchanged from the preliminary reading. The number shows a drop from November's 47.7 and marks the steepest decline since May 2020, rivaling numbers not seen since 2009.
PMI measures private sector changes in production, new orders, stock levels, employment and prices in manufacturing industries. Numbers below 50 signal an economic contraction.
Tesla Crashes On Deliveries; Payment Stock Rises On Upgrade
Tesla plunged 12.2% in Tuesday's stock market after reporting Q4 delivery numbers. They were higher than Q3 and the previous year's quarter, but lower than analyst expectations. The stock has dropped to levels not seen since August 2020, and was Tuesday's biggest loser on the S&P 500.
Conversely, Chinese EV maker Li Auto added 2.8% after reporting that December deliveries rose over 50% from the previous year.
Fellow Chinese EV maker NIO gave back 1.2% despite record Q4 delivery numbers, which were higher than projections given just one week ago.
Wynn Resorts popped 3.8% after Wells Fargo upgraded the stock to overweight from equal weight, and raised the price target to 101 from 74.
Las Vegas Sands rose 2.6% after the bank raised its price target to 53 from 45, and maintained its overweight rating. Analysts are optimistic about casino stocks with Macau exposure, as the Chinese government eases Covid restrictions.
PayPal gained 4.7% after Truist Securities upgraded the stock to buy from hold and raised its price target to 95 from 75. PYPL was an S&P 500 leader today.
Beauty Retail Stock Hits New High
Elf Beauty closed near unchanged in choppy trading. Earlier, ELF shares hit a new high on the relative strength line and posted a blue dot on the weekly chart.
Sterling Infrastructure rose 2% and broke out of an eight-week-old flat base, hitting the 33.72 buy point on the MarketSmith chart. The newly-formed base emerged from a cup base and held gains, after better-than-expected Q3 EPS and sales numbers in October.
Remember, it is risky to buy in a market correction.
Futures Rise After Stocks Hit Resistance
IBD 50 Stock Market Movers: Payment Stock Biggest Loser
The Innovator IBD 50 ETF fared worse than the major stock market indexes, shedding 1.2%.
Shift4 dropped 6.4% and was the IBD 50's biggest loser. However, FOUR stock may find support at its 21-day exponential moving average.
Medical education company Afya Educacional jumped 3.7% on news that it completed its acquisition of a Brazilian medical school, adding 340 seats. Shares are in a consolidating pattern with a buy point of 17.12. The stock hit a new high on the relative strength line, as indicated by the blue dot on the MarketSmith chart. AFYA is in the Leaderboard's IBD Sector Leaders List.
Univar Solutions dropped 1.1% after the Illinois-based specialty chemical and ingredients distributor said it was no longer in discussions to be acquired by German peer Brenntag.
