The stock market held gains Wednesday at midday, seemingly resigned to accepting a large interest-rate increase later today.
The Nasdaq composite climbed 0.5% and the S&P 500 was up 0.6%. The Dow Jones Industrial Average also rose 0.5%. Small caps led, with the Russell 2000 up nearly 1%.
Volume fell on the NYSE and Nasdaq compared with the same time on Tuesday, although it is likely to pick up once the Fed announcement is out.
Among major stocks, Microsoft rose 0.7% as it tries to break a four-day losing streak. Shares are near the year's lows and below the main moving averages.
Up more than 4% this week, Apple is trying for a three-day win streak as it aims to climb back above its 50-day and 200-day moving averages.
Stock Market Zeros In On Fed Announcement
At 2 p.m. ET, the Fed will announce its latest policy changes. Most traders expect another 75-basis point increase in the fed funds rate, to a target range of 3%-3.25%. Traders now expect the Fed to take interest rates to at least 4% in an all-out effort to tamp down inflation.
In midday trading, the 10-year Treasury yield was down 1 basis points to 3.56%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30870.21 | +163.98 | +0.53 |
| S&P 500 | (0S&P5) | 3878.44 | +22.51 | +0.58 |
| Nasdaq | (0NDQC ) | 11477.22 | +52.17 | +0.46 |
| Russell 2000 | 179.77 | +1.71 | +0.96 | |
| IBD 50 | 26.77 | +0.05 | +0.19 | |
Last Update: 11:46 AM ET 9/21/2022 |
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Geopolitical risk flared after Russian President Vladimir Putin raised the threat of using nuclear weapons in the conflict with Ukraine.
"Russia will use all the instruments at its disposal to counter a threat against its territorial integrity — this is not a bluff," Putin was quoted saying in The Wall Street Journal. He alluded to a nuclear threat from the West. In addition, Putin mobilized reservists as Russia tries to shore up troops following a series of battlefield losses in Ukraine.
Defense Sector Up, Leisure Down
The news sent defense and energy stocks higher. The iShares U.S. Aerospace ETF climbed 1.6% to 99.10 but remains well below its August high of 109.08.
Northrop Grumman jumped 2.8% to an all-time high, though it remains in buy range from a 487.99 buy point.
Lockheed Martin rose 2.6% as it regained the 50-day line. L3Harris Technologies rallied more than 3% and also regained the 50-day average. General Dynamics rose 2.2%.
The Energy Select Sector SPDR ETF
reduced its gain from more than 1% to 0.5% at midday. The price of U.S. crude oil reversed lower 1.1% to $82.93 a barrel. The Department of Energy reported U.S. crude oil inventories rose by 1.141 million barrels for the week, less than the 2.2 million forecast.
Travel and other leisure stocks took the Russia news badly. Lodging, airline, travel booking, casino and leisure service industry groups made up the five worst performing industry groups today.
TripAdvisor slid 4% and is back below the 200-day line. Marriott International also is sliding below the 50-day line, down 3.3% in heavy volume. Hyatt Hotels fell 3%, losing its grip on the 200-day line. Marriott Vacations tumbled below its 50-day line.
Delta Air Lines, United Airlines and American Airlines fell 3% to 4%.
Stocks Sell Off As Fed Sees New 'Terminal' Rate
IBD 50 Index Outperforms Stock Market
The Innovator IBD 50 ETF was up more than 1% earlier and pared gains to 0.7%. It is benefiting from strength in energy stocks, although the index was broadly higher. Comstock Resources, Northern Oil & Gas and EOG Resources rose more than 1%.
Electrical equipment maker Hubbell climbed to a new high and is rising from support in a pullback to the 10-week moving average. But shares faded from the early gains.
Waste Management rose 1.8% and is firming up above it 170.28 buy point. Toro, a landscape equipment provider and a new name in the IBD 50, is getting close to the 92.05 buy point of a short base within a larger consolidation.
Remember, the stock market is in a correction, and making stock purchases is extra risky.
Celsius dropped 2.5% as the fitness beverage stock tests its 50-day moving average.
Outside the IBD 50, General Mills soared 7% in heavy volume after the packaged foods company posted a 23% jump in August-quarter EPS and raised its outlook, despite rising costs. The stock is on pace for its best day since March 17, 2020, when it rose 11.8%, according to Dow Jones Market Data.
The August existing-home sales report was mixed. The sale of 4.8 million homes was slightly lower than the revised 4.82 million the previous month but above economist estimates of 4.7 million. Sales declined nearly 20% from a year ago and 0.4% from July.
The sales decline was the seventh straight, extending the longest monthly stretch since 2013, noted BMO Capital Markets economist Erik Johnson. While the decline was expected, August sales of existing homes fell only 0.4% annualized. "However, that's still the lowest level of activity since 2015 (excluding the pandemic)," he added.
