Dow Jones, Nasdaq See Gains Wither; Oil Jumps As This REIT Breaks Out

The Dow Jones Industrial Average rebounded in Tuesday’s session after trading lower on Monday, then forfeited its morning advance. The indexes also are trading near intraday lows. Yet in early afternoon trading, small-caps led the upside while the tech-heavy Nasdaq outperformed mildly.

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Dow Jones Today

At around 1:30 p.m. ET, the Dow Jones industrials were up around 0.3%, but then backtracked near the break-even level. The index remains above support at its 50-day line but is solidly below the 200-day moving average. The Nasdaq was up well more than 1.8% after gapping down below the 21-day and 50-day moving averages on Monday. However, gains continued to fade to nearly zero.

The S&P 500 also struggled to holds its gains and is slightly negative in early-afternoon trading Tuesday. The 500 is also trying to hold support at the 50-day line. Finally, the Russell 2000 rose 1.3%, leading the upside. Volume was higher on the Nasdaq and lower on the NYSE from the same time on Monday.

The yield on the benchmark 10-year Treasury note declined to as low as 2.67% on Tuesday. Meanwhile, West Texas Intermediate crude continued with volatile action this week, up over 6% after a 4% decline on Monday. The S&P 500 sectors traded mostly higher, with energy stocks and consumer discretionary stocks leading the upside. After outperforming in recent weeks, the health care sector led the downside with modest losses of around 0.5%.

Energy Names Lead The Dow Jones

Among Dow Jones leaders, oil and gas giant Chevron (CVX) led the upside with gains at one point topping 3% as energy stocks rallied. The stock has had a very strong year, up 43% year to date as of Tuesday afternoon. Shares successfully broke out from a 113.21 cup-base entry near the end of 2021 and have been traveling higher since, holding nicely above the 50-day line.

Chemicals stock Dow (DOW) also led the upside, rising 1.7%. Shares have recently formed a 65.04 buy point in a very long cup-with-handle base and are gaining support at the 10-week line. The stock is now 2% away from the entry.

On the downside, Merck (MRK) and Cisco (CSCO) led with losses of over 1% each.

Consumer Prices Hotter Than Expected

The consumer price index, announced early Tuesday by the Labor Department, came in hotter than expected for the month of March. But while the CPI rate hit a new 40-year high, core prices were tamer than expected.

The CPI rose 1.2% from February and 8.5% vs. a year ago. This was the biggest annual gain since December 1981. Meanwhile, core CPI, which doesn’t include food and energy categories, rose a more moderate 0.3% from the prior month. The annual core inflation rate rose to 6.5%, highest since August 1982.

Economists expected the overall CPI to rise 1.1% on the month, while core CPI was expected to rise 0.5% vs. February and 6.6% from a year ago.

This Rental-Home REIT Breaks Out

The Innovator IBD 50 ETF (FFTY) rose 1.8%. Earlier last week, the ETF broke below support at the 50-day line and 21-day line after finally reclaiming these areas in mid-March.

Meanwhile, rental-home REIT American Homes 4 Rent (AMH) broke out from a 41.20 buy point in a cup with handle on Tuesday. Shares remained above the buy point in afternoon trading but the breakout has occurred in lighter-than-average volume so far.

You’d prefer to see a stock break out of a good base in volume that jumps at least 40% to 50% above its average amount over the past 50 sessions.

On the bullish side, the stock price remains above support at the key 200-day, 50-day and 21-day lines.

Elsewhere, tobacco firm Vector Group (VGR) scored a breakout from a 12.72 cup-with-handle entry. Investors should be aware that the stock trades in lighter-than-optimal daily average dollar volume, which could pose additional risks.

But on the positive side, the stock’s RS line traded near new highs, a bullish indicator. This low P-E stock also currently yields a 6.3% annualized dividend, according to MarketSmith.

Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.

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