Stock Market Lower As Benchmark Yield Jumps; IBD 50 Stock Triggers Sell Signal

The stock market indexes fell to session lows at midday as the benchmark Treasury yield surged again. A few tech stocks flashed sell signals.




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The Nasdaq composite lost 1.7% as technology stocks came off Monday’s rally. The S&P 500 reversed lower to a loss of 0.6%. The Invesco QQQ Trust (QQQ) ETF fell 1.5% and is meeting resistance around the 200-day moving average.

The Dow Jones Industrial Average was down only 0.1%. Procter & Gamble (PG) rose 1.5% and is back above the 50-day moving average as the stock forms a flat base. walmart (WMT) is poking above a 152.67 buy point, although a prior entry could be spotted at 146.73.

Volume rose on the NYSE and fell on the Nasdaq compared with the same time on Monday.

US Stock Market Today Overview

Index symbol Price Gain/Loss % change
Dow Jones (0DJIA) 34876.61 -45.27 -0.13
S&P500 (0S&P5) 4556.07 -26.57 -0.58
Nasdaq (0NDQC ) 14285.31 -247.24 -1.70
Russell 2000 (IWM) 205.14 -2.77 -1.33
IBD 50 (FFTY) 38.24 -1.01 -2.57
Last Updated: 11:50 AM ET 4/5/2022

Treasury Yield Jumps After Economic Data

The yield on the 10-year Treasury note jumped 13 basis points to 2.54%.

The rise followed a bullish reading on the service sector, while inflation and interest rates show no sign of letting up.

The S&P US Services Purchasing Managers’ Index showed the largest increase so far this year. The service sector gauge rose to 58 in March from 56.5 in February, although it was lower than the initial estimate of 58.9.

The rebound in services sector activity leaves the door open for the Fed to move more aggressively on tightening its monetary policy, starting next month, said BMO Capital Markets economist Jennifer Lee.

Chris Williamson, chief business economist at S&P Global, said in the report that “business activity in the vast service sector enjoyed a boost from the relaxation of virus-fighting restrictions in March, regaining strong momentum after the omicron-induced slowdown seen at the start of the year.”

Demand for services is growing so fast that the survey saw the largest rise in backlogs of work since the survey began in 2009, Williamson added. With firms’ costs inflated by the soaring price of energy “and other raw materials, as well as rising wages, prices charged for services are rising at an unprecedented rate. Consumer price inflation therefore looks likely to accelerate further as we head into the spring, “he said.

In another service-sector report, the Institute for Supply Management’s index for March came in 58.3, in line with forecasts. It’s an improvement from 56.5 the previous month in the index, which surveys more than 375 service-providing firms in 16 industries.

Russia Faces More Sanctions

Another worry for the stock market is a set of new sanctions against Russia sought by the European Union. Those could include Russian energy exports.

“If leaving the Russians without Big Macs, Starbucks coffees, or Nike shoes hasn’t been effective in discouraging Putin from ending the war in Ukraine, banning the Russian energy imports should make a difference,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note. “Yet it would also mean a severe energy crunch in Europe, and a big hit to economic growth.”

US crude oil trimmed gains to 0.3% to $103.62 a barrel at midday.

Twitter (TWTR) pared gains to 5%. The social media company said You’re here (TSLA) CEO Elon Musk will join its board of directors. The news follows Monday’s disclosure that Musk acquired a 9.2% stake in Twitter. While Musk is on the board he cannot own more than 14.9% of Twitter’s common stock, the company said in a regulatory filing.

Twitter stock soared 27% Monday on Musk’s ownership disclosure, the largest single-day gain in the company’s history. Volume also was an all-time record, according to Dow Jones Market Data. Twitter shares today climbed above the 200-day moving average for the first time since Oct. 22.

Tesla stock fell 2.3% as it works on a cup base with a 1,208.10 buy point.

Digital World Acquisition (DWAC) slide 14.5% and is on track for its eighth straight decline. Digital World is a SPAC that plans to take public Donald Trump’s social media company, Truth Social, which is a rival to Twitter. The SPAC is down more than 23% this week, after tumbling 11.5% last week.

Carnival Cruise, Teva Among Stock Market Movers

Carnival Cruise Line (CCL) pared gains to 3% at midday after the company reported a record number of bookings the week of March 28-April 3. The week’s bookings topped the previous seven-day record by double digits, Carnival said in a news release.

The cruise line also said 22 of its 23 ships are back in operation after the industry was hit hard by the pandemic. The stock gapped up above its 50-day moving average but is still consolidating below the 200-day line.

Teva Pharmaceutical (TEVA) erased its entire 5.4% morning gain. Barclays upgraded the generic-drugs maker to overweight from equal weight and raised the price target to 13 from 11. Teva shares are clearing resistance around 10.25.

The Innovator IBD 50 ETF (FFTY) fell 2.6% as many of its technology stocks slide 2% to 4%. Axcelis Technologies (ACSL) lost nearly 9% in heavy trading, slipping further below the 75.10 buy point of a March 17 breakout. Axcelis fell more than 7% below the entry, which is a sell signal. It also broke below the 50-day line.

Alpha & Omega Semiconductor (AOSL) slide below the 50-day line. It is now 17% below its 59.48 buy point. That also is a sell situation.

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