Stocks Fall As Inflation Report Looms; Covid Vaccine Maker Crashes

The Dow Jones Industrial Average was lower Tuesday ahead of Wednesday’s key inflation report — the Labor Department’s consumer price index. Vaccine maker Novavax (NVAX) crashed 31% after cutting its 2022 revenue guidance due to lack of demand for its Covid-19 vaccine.




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American International (AIG), Perrigo (PRGO), Planet Fitness (PLNT) and Ralph Lauren (RL), Shockwave Medical (SWAV) and Take-Two Interactive (TTWO) were key companies reporting earnings Tuesday.

AIG shares added 0.9% as Perrigo rallied more than 2%. Planet Fitness lost nearly 2%, while Ralph Lauren rose about 1%. Shockwave leapt 8% in early trade. And video game maker Take-Two slid around 5%.

Chip stocks were sharply lower again Tuesday following Monday’s revenue warning from Nvidia (NVDA). Nvidia shares dropped another 2.6%. Advanced Micro Devices (AMD) was down 2.4%. And the VanEck Semiconductor ETF (SMH) declined 2.4% early Tuesday.

Tesla (TSLA) traded almost 2% lower early Tuesday. Elsewhere, Dow Jones tech leaders Apple (AAPL) and Microsoft (MSFT) fell 0.4% and 0.3%, respectively, after today’s stock market open.

Nike (NKE) posted the heftiest drop on the Dow, down 2.6% following a downgrade and price target cut from BNP Paribas, due to increased uncertainty in the company’s guidance.

In the strengthening stock market environment, Dow Jones stocks Coca-Cola (KO) and UnitedHealth (UNH) — as well as Monolithic Power Systems (MPWR), Ollie’s Bargain Outlet (OLLI) and Vertex Pharmaceuticals (VRTX) — are among the top stocks to buy and watch.

UnitedHealth and Vertex are IBD Leaderboard stocks. Ollie’s and Vertex were featured in this week’s Stocks Near A Buy Zone column. Monolithic Power was Thursday’s IBD Stock Of The Day. Vertex is also an IBD SwingTrader idea.

Dow Jones Today: Treasury Yields, Oil Prices, CPI

The Dow Jones Industrial Average dropped 0.2% in morning trade. The S&P 500 fell 0.4% and the tech-heavy Nasdaq composite declined 1.1%.

Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.1%. And the SPDR S&P 500 ETF (SPY) dropped 0.4%.

The 10-year Treasury yield ticked up to 2.80% Tuesday morning, rising after Monday’s fall to 2.76%. The 10-year Treasury yield is rebounding after hitting its lowest level since early April last week.

Meanwhile, U.S. oil prices looked to rebound from recent losses, as West Texas Intermediate futures gained around 1% on Tuesday, trading above $91 a barrel. Last week, WTI fell below $88 a barrel for the first time since mid-February.

The Labor Department’s consumer price index comes out early Wednesday. Econoday estimates call for consumer prices to rise 0.2% in July, down from June’s 1.3% jump. Inflation is expected to surge 8.7% in July from a year ago, easing from June’s 9.1% year-over-year rise.

Stock Market Rally

On Monday, the Nasdaq wiped out a 1.6% increase and closed 0.1% lower. The S&P 500, up as much as 1%, also lost 0.1%. The Dow Jones Industrial Average got away with a 0.1% increase.

Monday’s The Big Picture column commented, “The stock market faded and closed near session lows. The bearish reversal marked a swift change in character from Friday: The surprisingly strong July jobs report boosted odds of a 75-basis-point rate hike in September. Yet, the market regained its composure and closed near session highs.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines. IBD offers a broad range of growth stock lists, such as Leaderboard and SwingTrader.

Investors also can create watchlists, find companies nearing a buy point, or develop custom screens at IBD MarketSmith.


Five Dow Jones Stocks To Watch Now


Dow Jones Stocks To Watch: Coca Cola, UnitedHealth

Dow Jones soda giant Coca Cola is building the right side of a flat base that has a 67.30 buy point. Shares are testing their 50-day line following last week’s losses. KO stock traded up 0.2% Tuesday.

Health insurance giant and IBD Leaderboard stock UnitedHealth remains in buy range above its double-bottom-with-handle base’s 518.80 buy point amid Monday’s 0.3% gain, according to IBD MarketSmith chart analysis. Shares were up 0.65% Tuesday.

UNH stock shows a solid 94 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. Investors can use the IBD Composite Rating to easily gauge the quality of a stock’s fundamental and technical metrics.


4 Top Growth Stocks To Watch In The Current Stock Market Rally


Top Stocks To Watch: Monolithic, Ollie’s, Vertex

Thursday IBD Stock Of The Day Monolithic Power Systems continues to build the right side of a consolidation with a 580.10 buy point. Meanwhile, shares are about 3% above a 514.80 early entry. Keep an eye out for a potential handle to offer another alternate buy point. Shares dropped 3.1% Tuesday.

Ollie’s Bargain Outlet is rebounding from its 10-week line — a critical support level — placing the top discount retailer in a new buy zone. Shares are also carving a handle after a large cup base, putting the latest buy point at 72.37. Current price action is about 10% away from that entry. Shares edged higher early Tuesday.

IBD SwingTrader stock Vertex Pharmaceuticals rallied 2.1% Monday, moving out of buy range past a cup with handle’s entry at 279.23. The 5% chase zone goes up 293.19. The stock’s June 23 breakout is back on track following last week’s second-quarter earnings results. Vertex stock crept 0.5% higher Tuesday morning.


Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live


Tesla Stock

Tesla stock pared gains to 0.8% Monday, recovering a small part of Friday’s 6.6% skid. Shares lost 1.9% Tuesday morning.

Last week, Tesla shares reached their highest level since early May, but are now finding resistance around their 200-day line, which is a key level to watch. On Friday, the company announced that a 3-for-1 stock split will occur on Aug. 24. The stock is about 30% off its 52-week high.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares fell 0.3% Monday, extending a losing streak to three sessions. The stock is building the right side of a new base. Shares dipped 0.4% Tuesday morning.

Microsoft dropped 0.9% Monday, falling for a second straight day. The software giant is still ranging below its long-term 200-day line. The stock on Monday closed about 20% off its 52-week high, and moved down 0.3% early Tuesday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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