The stock market dropped Tuesday after labor productivity declined amid a growing belief that we've entered a recession. Energy stocks jumped after Russia cut off crude oil supplies to parts of Europe.
The Nasdaq composite dropped 1.3% while the S&P 500 was down 0.4%. The Dow Jones Industrial Average dropped 0.1%. The small-cap Russell 2000 index lost 1.6%.
Volume rose on the Nasdaq but fell on the NYSE vs. the same time on Monday.
U.S. labor productivity declined for the second consecutive quarter as employers spent more on wages and benefits. U.S. nonfarm labor productivity — a measure of goods and services produced in the U.S. per hour worked — fell in the second quarter at a seasonally-adjusted annual rate of 4.6%, according to the Labor Department.
Economists surveyed by Econoday had estimated a drop of 4.5%. Unit labor costs, a measure of worker compensation and productivity, increased at a 10.8% pace compared to the prior quarter. Economists had expected a 9.3% increase.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32801.47 | -31.07 | -0.09 |
| S&P 500 | (0S&P5) | 4122.09 | -17.97 | -0.43 |
| Nasdaq | (0NDQC ) | 12475.44 | -169.02 | -1.34 |
| Russell 2000 | 189.76 | -3.06 | -1.59 | |
| IBD 50 | 28.91 | -0.42 | -1.43 | |
Last Update: 12:06 PM ET 8/9/2022 |
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IBD 50 Leader Jumps On Earnings
Despite recent job gains, a solid majority of Americans — 62% — think the U.S. economy has entered a recession, up from 58% a month ago, according to a new IBD/TIPP Poll.
The 10-year U.S. Treasury yield fell five basis points to 2.78%. Crude oil prices eased down to $90.66 per barrel.
Energy stocks posted the largest gains on Tuesday after Russian oil stopped flowing through a pipeline that feeds Central and Eastern Europe. The S&P Energy Select Sector ETF gained 2.1%.
Shockwave Medical soared more than 16% after reporting earnings and sales that easily beat Wall Street estimates. This IBD 50 Stocks to Watch pick jumped past the 223.25 buy point of a cup base with a rising relative strength line. The stock is trading well above its 50-day moving average and 200-day moving average.
The Innovator IBD 50 ETF lost 1.4%.
Chipmakers Lead Stock Market Losses
Chipmakers are having a rough day.
Contract chipmaker GlobalFoundries beat Wall Street targets for the second quarter and guided higher for the current period. Even so, the stock fell 6%.
Micron plunged 5% after it warned that fiscal Q4 revenue may not reach the lower end of guidance.
In other sectors, Novavax tumbled nearly 30% after reporting a weak 2022 outlook on sluggish demand for their recently-approved Covid-19 vaccine.
The decision followed a major second-quarter disappointment, in which sales booked less than one-fifth of analyst expectations. In addition, the company reported an unexpected loss that widened vs. the same quarter last year.
Principal Financial Group jumped more than 6% after easily beating earnings estimates. Shares are building a base with a 77.32 buy point. Tuesday's jump is on pace for the largest percent increase since November 9, 2020, when it rose 15.16%.
Still to come this week on the earnings calendar: Walt Disney and Tesla rival Rivian Automotive.
Follow Michael Molinski on Twitter @IMmolinski
