Stock market indexes held the majority of morning gains at midday Wednesday. The Nasdaq composite, which had underperformed this week, led broad benchmarks higher with a 1.3% increase.
The Dow Jones Industrial Average climbed 0.6% and is looking to add some space above its 200-day moving average.
The S&P 500 rose 1%. It climbed back above 4000 and is now testing potential resistance at the 50-day moving average. Small caps also rallied, with the Russell 2000 up 0.6%.
Volume rose on the Nasdaq and NYSE compared with the same time on Tuesday.
Indexes continue with a rally attempt but still lack a meaningful follow-through signal. Until then, the market remains in a correction and investors should avoid buying stocks.
Microsoft climbed back above its 276.86 buy point, although volume was below average. Alphabet spent only moments above the 106.69 buy point of a cup-with-handle base and slid back into the pattern.
Tradeweb Markets broke out of a flat base in active trading. The stock topped its 76.60 buy point and is in buy range up to 80.43.
Innovator IBD 50 ETF rallied 1.5% at midday. Workday broke out above the 193.74 buy point of a flat base in busy trading.
Earnings Reactions Are Positive
Micron Technology climbed more than 7% in heavy volume. The memory-chip maker late Tuesday missed quarterly estimates. But investors keyed on management's comments that the worst may be over for its business.
Lululemon Athletica was a star Wednesday, gapping up 13% after the athletic wear company breezed past analysts' expectations. January-quarter profit leapt 31% on a 30% increase in quarterly sales. Lululemon also raised guidance. The stock cleared resistance around the 330 level and is forming the right side of a base.
Cal-Maine Foods jumped nearly 11% in heavy volume after beating February-quarter profit estimates late Tuesday.
The nation's largest egg producer benefited as an outbreak of bird flu diminished chicken flocks and kept egg prices high. On Wednesday, the stock bounced back above the 200-day moving average as it shapes the lows of a base.
UBS Downgrades Five Retailers
Several retailers fell in Wednesday's stock market after UBS gave a bearish outlook, downgrading several to sell.
Urban Outfitters lost more than 3% as it met resistance at the 50-day average. But shares remained in a base with a 29.84 buy point.
Ross Stores lost 2%. The discount chain is trying to bounce off the 100 price level this week. Shares remain above the 200-day moving average but well below the 50-day line.
UBS analysts cut both stocks to sell and also downgraded Foot Locker (down 1%) and Burlington Stores (down 4%) to sell. Bath & Body Works (off 2%) was cut from buy to neutral. Analysts also cut price targets on 17 other retail stocks.
"Our view has been a consumer spending slowdown will cause the industry's earnings outlook to deteriorate throughout the year, leading to persistent downward EPS revisions and pressure on Softline (price/earnings ratios)," analysts said in a report.
Deteriorating evidence and financial-sector challenges contributed to the gloomy outlook. "We think Fed rate hikes will have a more negative impact than previously thought."
Stock Market Gets More Data
Pending home sales rose 0.8% to an 83.2 reading in February vs. the previous month. The report defied expectations for a 3% decline and marked the third straight month of gains.
"After nearly a year, the housing sector's contraction is coming to an end," said National Association of Realtors Chief Economist Lawrence Yun. SPDR S&P Homebuilders ETF rose 0.3%.
The economic calendar will be busier between now and Friday's closing bell. On Thursday, the weekly jobless claims report comes out before the stock market opens.
On Friday, the February personal income and spending report is due out. The report includes the core PCE price index, which is believed to be the Fed's most trusted inflation gauge. Economists expect personal income to rise 0.3% from January and spending to rise 0.2%. The PCE price index and core index are forecast to rise 0.4%.
Also Friday, the University of Michigan's consumer confidence report comes out.
