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Indexes Bleed More Red As YY, Target Go In Opposite Directions | Stock News & Stock Market Analysis

Weakness in Asia and Europe overnight spilled into the U.S. stock market Wednesday.

The session was shaping up to be a carbon copy of Tuesday’s that saw indexes recover well off lows, but sellers came in late, resulting in a weak close. Some attributed the late selling to news that Senator Ron Johnson, R-Wis., will oppose the current GOP tax bill.

XAutoplay: On | OffThe Nasdaq composite, S&P 500 and Dow Jones industrial average ended with losses of around 0.5% to 0.6%. Chipmakers were a drag on the Nasdaq, while Caterpillar (CAT) lagged in the Dow, falling 2.5%. Preliminary data showed volume on the NYSE and Nasdaq coming in just below Tuesday’s levels.

Airline stocks and department stores outperformed, along with several retail-related groups.

In economic news, October retail sales were a mixed a bag, but there was arguably more good news than bad. Overall, sales rose 0.2%, just above the consensus estimate for a 0.1% gain. Excluding autos, sales rose 0.1%, just below the consensus estimate of 0.2%. An additional bright spot was that September sales were revised higher to a gain of 1.9% vs. an initially reported rise of 1.6%.

In the stock market today, retailer Children’s Place (PLCE) shot up 6% to 120.65, helped by a solid earnings report and news that same-store sales rose 5.1%. Children’s Place is near the top of a consolidation that shows a conventional entry at 125.40, but an earlier entry of 119.55 also looks valid.

On the downside, Target (TGT) crashed 10% despite reporting better-than-expected earnings, sales and same-store sales. The outlook was the problem as Target cited a “highly competitive  holiday quarter.”

Target is often mentioned as a retail bellwether alongside Wal-Mart (WMT), but it’s Wal-Mart that seems to be executing better at this point. After a recent breakout over an 82.09 buy point, Wal-Mart is holding near highs ahead of its earnings report Thursday before the open.

Inside the IBD 50, YY Inc. (YY) was a huge gainer, up 25%, on strong earnings. Early Wednesday, the China internet name reported a 42% rise in quarterly profit and 49% jump in sales.

Also in the IBD 50, Essent Group (ESNT) continued to show good action after a recent trip to the 50-day moving average. Shares rose nearly 4% to 43.92. It’s slightly extended after reclaiming a 41.54 buy point.

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