The Dow Jones Industrial Average traded near session lows on Thursday as the major indexes continued to pull back moderately this week. The pause comes after a series of powerful up days established the new market uptrend in the middle of March.
In early-afternoon trading, the Dow Jones industrials were off 0.5% as the Nasdaq lost 0.5% as well. The S&P 500 declined 0.4% while the Russell 2000 pared earlier gains and lost 0.2%.
At least eight components in the Dow Jones lost 2 points or more.
Data showed volume was running lower on the Nasdaq and on the NYSE vs. the same time on Wednesday. Stocks in general have been rising in heavy or rising volume and selling off in lighter volume, a good sign for the market uptrend.
Dow Jones Today: Showing Technical Fortitude
The indexes have rallied considerably from their near-term lows and have reclaimed key moving averages. The Nasdaq is currently battling resistance at its 200-day line, while the Dow Jones and S&P 500 remain comfortably above the 200-day and 50-day simple moving averages, as well as the 21-day exponential moving average.
U.S. Stock Market Today Overview
|Last Update: 1:40 PM ET 3/31/2022|
Overall, stocks were negatively impacted by a rise in the annual inflation rate to 6.4%, the highest since January 1982. The PCE deflator, a closely watched inflation metric, shows the current status of price pressures relative to the past.
Among Sectors, Oil Stocks Outperform
The S&P 500 sectors traded mixed. On the downside, communication services and financial stocks fell roughly 1% each.
Utilities, real estate and consumer staples — all defensive categories — led the upside with modest gains of less than 1% each. Energy stocks also were among leading groups. However, U.S. crude oil futures moved contrary to the sector and were down more than 4% to around $103 a barrel.
Energy futures were impacted by the anticipated announcement from President Joe Biden on the largest oil release ever from the country’s strategic petroleum reserve, with the goal of mitigating the recent spike in energy prices. Oil futures have skyrocketed in recent weeks, especially after Russia’s invasion of Ukraine in late-Feb.
A handful of oil stocks were rising Thursday, including Occidental Petroleum (OXY), up 2.2%; Valero Energy (VLO), up 1.8%; and Range Resources (RRC), up 4%. Both Occidental Petroleum and Valero were extended from buy points. Meanwhile, Range Resources moved into its profit-taking zone from a buy point of 26.58 off a cup.
Outside Dow Jones: Notable Moves
Outside the Dow Jones, Vertex Pharmaceuticals (VRTX) moved 0.9% higher and traded within a buy range after the company released Phase 2 trial data for an experimental pain drug. The 5% buy area above the 255.03 cup-base entry tops out at 267.78.
Vertex Pharmaceuticals announced promising test results for its opioid alternative on Thursday, boosting shares. The biotech tested its pain drug in patients following bunion removal and abdominoplasty, a procedural commonly referred to as a tummy tuck. In both studies, a high dose of Vertex’s drug, dubbed VX-548, led to greater pain relief than a placebo and a standard treatment regimen.
Vertex holds a half-position weighting in IBD Leaderboard.
Elsewhere, Paychex (PAYX) rose over 1% and moved above a proper buy point. After reporting strong earnings on Wednesday, the stock broke out from a cup base with a 139.07 buy point.
Adjusted earnings of $1.15 per share beat estimates and showed year-over-year growth of 20%. Meanwhile, revenue of $1.28 billion also beat views and increased 15% year over year.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
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