The stock market indexes bounced overnight, opening Tuesday's session above Monday's lows. Aggressive sellers stepped in immediately, dropping prices to new sell-off lows. Tesla CEO Elon Musk and Twitter filed opposing documents, adding and disputing recent whistleblower allegations.
The Dow Jones Industrial Averages is trading lower by 0.3% in the first hour while the S&P 500 is down by 0.2%. The Nasdaq composite has lost 0.5% so far this morning.
Nasdaq volume is higher than at the same time on Monday while NYSE volume is lower.
Yields at all maturities are sliding in early action, shedding a few basis points. However, the 10-year Treasury note is growing comfortable above 3.0%, suggesting additional gains in coming sessions.
West Texas Intermediate crude oil is retreating, down more than 4% to $92.90 per barrel. Natural gas is also getting pummeled after Europe reported full gas storage facilities, losing 4.5% while violating psychological support at the $9.00 level.
Stock Market Support Levels In Play
The Nasdaq composite closed 1% lower on Monday, right at the key 50-day moving average. This placement should give bulls an opportunity to retake control of the ticker tape in the next few days.
Unfortunately, weak buying interest or outright failure will encourage aggressive bears to reload positions, perhaps fueling a major breakdown. The Dow Jones Industrial Average is also testing 50-day support.
Monday's The Big Picture column perfectly sums up the current stock market situation, noting that a "6% cushion above (the 50-day line) vanished in the Nasdaq's past two sessions. A break below the line would bring another — perhaps worse — bearish sign. Thus, how the indexes behave around the 50-day line this week has keen importance."
Musk And Twitter Catfight Continues
Elon Musk filed an amended 13D overnight, adding whistleblower allegations to his original request to terminate the $44-billion Twitter acquisition. His opponent fired back this morning, insisting the "purported additional termination" request is "invalid." TWTR stock is losing ground on the news, trading below 40, while TSLA stock has relinquished a 1% premarket rally.
Stock Market Today: China Plays And Retailers On The Move
Key earnings movers on Tuesday morning include China search engine giant Baidu and Best Buy. BBY stock traded 5% higher after beating Q2 profit estimates, even though year-over-year comparable sales fell more than 12%.
BIDU shares have fallen nearly 6% despite better-than-expected results.
Discount retailer Big Lots has gapped up nearly 10% after reporting a smaller-than-expected Q2 loss of $2.28 per share. In addition, revenue fell 7.6% year-over-year.
The company has decided not to provide forward guidance.
Market Rally Breaks Lower As Rate-Hike Fears Intensify
Top Stocks To Watch
No. 35 on the IBD 50, Arista Networks added a handle to a double-bottom base, placing the correct entry at 132.97, according to MarketSmith chart analysis. Arista's relative strength line is holding near highs despite recent market weakness, which is a bullish sign. ANET shares traded higher by 0.3% early Tuesday.
IBD Leaderboard stock Costco fell further below its 552.81 buy point from a cup with handle on Monday, declining 3.4%. Wait for a bullish retake of the entry before you consider buying shares. COST stock traded up 0.1% in the first hour.
GlobalFoundries fell below a double bottom's 61.98 buy point on Monday, skidding 6%. An alternative entry, from a handle, is in play at 66.06. GFS stock has jumped 1.7% so far on Tuesday.
Cosmetics leader and Nasdaq 100 component Ulta Beauty is right above a double bottom's 417.08 buy point after Monday's 1.5% gain. Shares are in the buy zone, but the current market weakness should be considered before taking risk.
ULTA shares are trading flat this morning.
