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The stock market closes to start the year; Tesla was a loser

techsm5

Major stock indexes recouped some of Tuesday’s earlier losses and closed the day’s lows. The fall on the first trading day of the new year added to the losses in 2022, as investors are still worried about interest rate hikes and a possible recession in 2023. You’re here (TSLA) was down double digits.




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The S&P 500 fell 0.4% in the afternoon session while the Nasdaq plunged 0.8%. The Dow Jones Industrial Average lost less than one percent. The Russell 2000 Small Cap Index fell 0.2%.

The tech-heavy Invesco QQQ (QQQ) Nasdaq 100 ETF was down 0.7%.

Volume for the NYSE and Nasdaq was significantly higher compared to the same time on Friday.

Crude oil fell 3.9% to $77.16 a barrel. The SPDR Energy Select Sector ETF (XLE) lost 3.5%. Natural gas plunged more than 10% and is trading at $4 per million British thermal units.

Bitcoin futures added 0.5% to $16,610. The yield on 10-year Treasury bills fell 11 basis points to 3.77%.

European stock markets rose, with the German DAX up 0.8% and the Paris CAC 40 up 0.4%. London’s FTSE 100 added 1.4% in afternoon trading.

The odds of a 25 basis point hike by the US Federal Reserve at the February meeting stand at 69.2%. This would bring the fed funds rate into the range of 4.5% to 4.75%. Meanwhile, 30.8% of market watchers are looking for a 50 basis point hike, according to CME Group’s FedWatch tool.

The final December Manufacturing Purchasing Managers’ Index (PMI) came in as expected at 46.2, unchanged from the preliminary reading. The number shows a drop from 47.7 in November and marks the biggest drop since May 2020, rivaling numbers not seen since 2009.

The PMI measures private sector changes in production, new orders, inventory levels, employment and prices in manufacturing industries. Numbers below 50 signal an economic contraction.

Tesla Cuts Deliveries; Payment stock increases when upgrading

Tesla plunged 12.2% in the stock market on Tuesday after announcing fourth-quarter delivery numbers. They were higher than the third quarter and the year-ago quarter, but lower than analysts’ expectations. The stock has fallen to levels not seen since August 2020 and is Tuesday’s biggest loser on the S&P 500.

Conversely, the Chinese electric vehicle manufacturer Li-Auto (LI) added 2.8% after reporting that December shipments were up more than 50% from a year earlier.

Another Chinese electric vehicle manufacturer NIO (NIO) fell 1.2% despite record fourth-quarter delivery numbers, which were above projections given just a week ago.

Wynn Resorts (WYNN) jumped 3.8% after Wells Fargo upgraded the overweight stock from equal weight and raised the price target from 74 to 101.

Las Vegas Sands (LVS) rose 2.6% after the bank raised its price target from 45 to 53 and maintained its overweight rating. Analysts are bullish on casino stocks with exposure to Macau as the Chinese government eases Covid restrictions.

PayPal (PYPL) gained 4.7% after Truist Securities upgraded the stock to buy from 75 and raised its price target to 95 from 75. PYPL was a leader in the S&P 500 today.

Beauty product stock hits new high

Beauty Elf (ELF) closed modestly up 0.1% in choppy trading. ELF shares hit a new high on the relative strength line and posted a blue dot on the weekly chart.

Sterling Infrastructure (STRL) rose 2% and broke off an eight-week flat base, reaching the buy point of 33.72 on the MarketSmith chart. The newly formed base emerged from a cutting base and held on to gains, following better-than-expected Q3 EPS and sales numbers in October. Remember that it is risky to buy in a market correction.

IBD 50 Stock Market Movers: Paying for Stocks Was a Loser IBD

The Innovator IBD 50 ETF (FFTY) underperformed the major equity indices, losing 1.2%.

Shift4 Payments (FOUR) fell 6.4% and is the biggest loser on the IBD 50. However, FOUR stock is finding support at its 21-day exponential moving average.

Medical Education Society Afya Educational (AFYA) jumped 3.7% on the announcement of the completion of the acquisition of a Brazilian medical school, adding 340 places. Stocks are in a consolidation pattern with a buy point of 17.12. The stock hit a new high on the relative strength line, as indicated by the blue dot on the MarketSmith chart. AFYA is in the list of IBD industry leaders in the ranking.

Univar Solutions (UNVR) fell 1.1% after the Illinois-based specialty chemicals and ingredients distributor said it was no longer in talks to be acquired by its German counterpart Brenntag.

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