The Dow Jones Industrial Average saw gains fade as indexes lost momentum. A senior Federal Reserve official delivered an inflation warning. Coinbase (COIN) plunged even as Bitcoin rallied again, with the likes of Riot Blockchain (RIOT) rising. Walt Disney (DIS) was the top blue chip on earnings.
Three impressive stocks were among those breaking out. Sector Leader Matador Resources (MTDR), Western Midstream Partners (WES) and Clean Harbors (CLH) all tested buy points.
Volume was up on the Nasdaq but lower on the New York Stock Exchange, according to preliminary data.
The yield on the benchmark 10-year Treasury note jumped 11 basis points to 2.89%. West Texas Intermediate crude oil rose around 2.5% to just over $94 per barrel.
Fed Official Gives Warning Amid Encouraging Inflation Data
Stocks were boosted Thursday amid more encouraging inflation data.
New producer price index data showed wholesale prices fell 0.5% in June, better than the 0.3% expected by analysts. Core prices increased 0.2% from June vs. the consensus of 0.4%.
Year over year, prices were up 9.8%, below the 10.3% consensus. The core rate rose 7.6%, just under the 7.8% consensus
But the San Francisco Fed president warned it is still too soon to “declare victory” in the fight against inflation. She told the Financial Times that she is not ruling out a third consecutive 0.75% rate hike when the Federal Reserve Open Market Committee meets in September. However, she did say that a half-percentage point rate rise in September is her “baseline.”
While Daly welcomed the latest inflation reports, she wants to see more evidence the central bank is “on a path to bring inflation down substantially and achieve our price stability target.”
Nasdaq Reverses As Small Caps Shine
The Nasdaq saw gains evaporate as it fell 0.6%. DocuSign (DOCU) was among the worst laggards as it fell 4%.
The S&P 500 also saw progress stall and closed down 0.1%. Devon Energy (DVN) was a top performer here, popping 7.3%.
U.S. Stock Market Today Overview
Last Update: 4:24 PM ET 8/11/2022
A slim majority of the S&P 500 sectors were negative. Energy, financials and industrials fared best. Consumer discretionary and health gave up the most ground.
Small caps managed to outshine the major indexes, with the Russell 2000 index up 0.5%.
The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, reversed late as it closed down 0.1%.
Dow Jones Today: Disney Stock Soars On Earnings
The Dow Jones saw early gains fade away but ended with a thin gain of 0.1%.
Walt Disney stock was the top performer on the Dow Jones today. It closed up 4.7% on a strong earnings report. The firm beat Wall Street targets for fiscal Q3 earnings, revenue and subscribers.
Disney also announced plans for an ad-supported Disney+ and a 38% price hike for the ad-free version.
Disney stock is climbing off a mid-July low and is now pulling away from its 50-day moving average, according to MarketSmith analysis. But it remains more than 41% below its March 2021 high of 203.02.
Chevron (CVX) also did well on the upside as it popped 2.4%. On the downside, Johnson & Johnson (JNJ) brought up the rear as it fell 2.1%.
Coinbase Stock Falls Despite Bitcoin Rally
Coinbase stock fell sharply Thursday as its poor quarterly report looked to have finally caught up to it. The cryptocurrency exchange stock fell despite Bitcoin rising again.
A broad rally and a jump in Bitcoin helped COIN move higher despite widely missed earnings views and the firm slashing its full-year forecast for transacting users. Coinbase now expects 7 million to 9 million monthly transacting users vs. a range of 5 million to 15 million three months ago.
But Coinbase stock plunged 10.8% Thursday in above-average volume. It dipped toward its short-term moving averages and the key 50-day line.
Bitcoin was trading at more than $24,000 after gaining nearly 2% in the past 24 hours, according to CoinDesk.
Other cryptocurrency plays had better luck. The Grayscale Bitcoin Trust (GBTC) rose 1.5% while Bitcoin mining play Riot Blockchain vaulted 4.5%. The latter stock is now up more than 15% for the week.
Outside Dow Jones: Energy Stock Among Breakouts
Matador Resources made a bullish move by moving above a cup-with-handle buy point of 58.68, MarketSmith analysis shows. The oil and gas explorer has a best-possible EPS Rating of 99. It is also in the top 3% of stocks in terms of price performance over the past 12 months.
Matador is a member of Sector Leaders, IBD’s most stringent and powerful screen. All IBD Sector Leaders show outstanding earnings and sales growth in recent quarters and are strong across many other fundamental and price-performance metrics.
Western Midstream Partners currently sits in a buy zone after breaking out of its own cup-with-handle base. The entry point here is 27.80. The natural gas transportation play has seen its relative strength line turn higher. Excellent all-around performance is reflected in an IBD Composite Rating of 99.
Clean Harbors saw its relative strength line hit new heights as it popped above a double-bottom-base buy point of 115.10. It closed just below this entry. Profits are ramping up at the pollution control play, with EPS rising by an average of 81% over the past three quarters.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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