Stock Market Trades Lower On Mixed Ukraine Signals; Retail Sales Climb

The stock market dropped Wednesday morning as investors absorbed rising retail sales, earnings and mixed signals about the Ukraine crisis.

X

The Nasdaq composite declined 1% as the technology and communications services sector sold off. The S&P 500 lost 0.6% and is now slightly below its 200-day moving average.

The Dow Jones Industrial Average fell 0.6%. The small cap Russell 2000 index fell 0.4%. Volume fell on the Nasdaq and NYSE compared with the same time on Tuesday.

Russia declared it had withdrawn troops from Ukraine’s Crimean peninsula, in addition to the drawdown of 10,000 of troops deployed near the Ukraine border. That appeared to signal a possible easing of tension. However, Western officials warned that large-scale Russian military maneuvers continued, and that increased tactical units and equipment have advanced toward Ukraine.

Retail Sales Beat Forecasts

U.S. retail sales rose 3.8% in January from the previous month, much better than the 2% increase economists had forecast. Excluding cars and trucks, sales rose 3.3%, above estimates for a 1% improvement.

“The strong, broad-based rebound in retail sales after the weak December is particularly impressive given the drag from the omicron variant and serves as a reminder that the U.S. consumer doesn’t stay down for long,” Jeff Buchbinder, Equity Strategist for LPL Financial, said in a commentary. “Rising wages are supporting spending despite high inflation.”

SPDR S&P Retail ETF (XRT) fell 1.3%.

At 2 p.m. ET, the Federal Reserve will release minutes of its January policy meeting. With inflation still overheated, investors are trying to determine how large a rate increase the Fed plans for next month’s meeting. Odds of a half-point rate hike now exceed those for a quarter-point increase.

The 10-year Treasury yield ticked down to 2.03% Wednesday at midday.

Stock Market Gets Earnings Lift

Fertilizer maker CF Industries (CF) reported Q4 results that missed estimates. Still, the company expects growth into 2023. The stock reversed higher, up 3%. If Russia were to invade Ukraine, sanctions against Russia could include fertilizers, a risk for CF.

Oil prices bounced again Wednesday morning. West Texas Intermediate crude rose more than 2.5% to climb back above $94 a barrel.

Oil drilling company Nabors Industries (NBR) gained 4.2%, breaking through a 130.35 buy point after a long consolidation. Another entry is at 127.10. The stock has an IBD Relative Strength Rating of 97.

The company saw both earnings and sales growth rise last quarter. Earnings per share jumped 37% from the previous quarter. Nabors Industries holds the No. 3 rank among its peers in the Oil & Gas-Drilling industry group.

Roblox (RBLX) plunged more than 23% Wednesday after missing Wall Street’s estimates for the fourth quarter.

Airbnb Beats Estimates; Stock Gains

Airbnb (ABNB) reported fourth-quarter sales and earnings that beat analysts’ estimates as did its first-quarter outlook. The stock climbed 6%, extending a rebound from its Jan. 31 low. The vacation rental company’s shares are climbing the rear wall of a cup base.

Shopify (SHOP) plunged more than 18% to the lowest point since June 2020 even though fourth-quarter earnings and revenue topped consensus estimates. The company’s outlook appeared to disappoint the stock market.

The Trade Desk (TTD) tumbled 7.5% in heavy volume, but pared losses. The advertising tech company’s fourth-quarter earnings and revenue beat views and its guidance for the current quarter topped estimates. In Q4, The Trade Desk’s earnings were 42 cents per share, up 14% from a year earlier. Revenue rose 24% to $395.6 million. Analysts expected Trade Desk earnings of 27 cents a share on sales of $389.2 million for the period ended Dec. 31.

Nvidia (NVDA) will announce results after today’s close. Analysts expect Nvidia to earn $1.22 a share, an increase of 58%, on sales of $7.4 billion, up 48%, according to FactSet. Nvidia fell 1.3% Wednesday morning.

Innovator IBD 50 ETF (FFTY) fell 0.3%.

Follow Michael Molinski on Twitter @IMmolinski

YOU MAY ALSO LIKE:

IBD 50 Stocks Offer Broader Range Beyond Cyclicals

2022 Stock Market Forecast Brings Unfamiliar Risks For Investors

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It

IBD Live: Learn And Analyze Growth Stocks With The Pros

The post Stock Market Trades Lower On Mixed Ukraine Signals; Retail Sales Climb appeared first on Investor’s Business Daily.