The Dow Jones Industrial Average reversed lower in the final hour of trading. Meanwhile, the S&P 500 and Nasdaq both fluctuated between small gains and losses but ultimately closed lower as well.
The Dow Jones industrials fell 0.6% after being up earlier in the session. The S&P 500 erased early gains as well and fell 0.9%, while the Nasdaq also lost 0.9%. All three major indexes met with resistance at their 10-week lines and are moving lower from this area.
Small caps fared the best, with the Russell 2000 down only 0.3%. Volume was lower on the Nasdaq and higher on the NYSE vs. the same time on Monday, early data indicated.
Meanwhile, U.S. crude oil closed down 8.2% to below $96 a barrel amid growing concerns over demand destruction. Steep losses last week brought the commodity below $100 a barrel for the first time since May. The SPDR Energy Select Sector Fund (XLE) ETF fell 2.4% along with falling crude prices and led the downside among S&P 500 sectors, all of which closed lower on Tuesday.
U.S. Stock Market Today Overview
|Last Update: 4:30 PM ET 7/12/2022|
Investors seem to be turning away from riskier investments such as growth stocks and moving their money into safe haven assets like U.S. Treasuries. The 10-year Treasury yield fell as much as 6 basis points to 2.928% intraday. The yield closed at around 2.95% on Tuesday.
The euro fell to “parity” vs. the U.S. dollar for the first time since 2002, meaning one euro became worth one dollar. The euro fell as low as 1.0004 against the dollar in the overnight session. German recession fears are driving much of the selling pressure.
PepsiCo Eyes Breakout After Earnings
PepsiCo (PEP) surprised investors with stronger-than-expected earnings Tuesday morning. Second-quarter EPS rose 8% to $1.86 a share while revenue increased 5% on a year-over-year basis. The company also raised its revenue outlook for the year.
The snacks and soda giant, which distributes products under brands like Lay’s, Doritos, Cheetos, Tropicana, Gatorade and more, traded 5% below a 177.72 flat-base entry. The upward-trending relative strength line hit new highs on Tuesday and is supporting the stock as it holds support above its 50-day moving average and 21-day exponential moving average.
Technology, Oil Stocks Lead Downside In Dow Jones
Leading the downside among Dow Jones stocks on Tuesday were tech leaders Salesforce.com (CRM) and Microsoft (MSFT), down 4.8% and 4.6%, respectively. Salesforce.com fell back below its 50-day line after briefly reclaiming this area last week. Similarly, Microsoft also faded back below support at its 50-day line.
Chevron (CVX) also led the downside among Dow Jones stocks, falling 2.2% in sympathy with fading oil prices. The stock slipped below support at its 200-day line for the first time since September of last year.
On the upside, Boeing (BA) led with a 7.5% gain. The aerospace giant spiked in heavy volume and moved further above support at its 50-day line. The firm early Tuesday announced major program deliveries across its commercial and defense operations for Q2. Deliveries hit their highest level since March of 2019. Boeing is scheduled to announce financial results for Q2 on July 27.
Outside Dow Jones: Stocks To Watch
Despite the market’s weak close, automotive replacement parts supplier Dorman Products (DORM) closed up 0.3% after scoring a breakout from a cup-with-handle base on the weekly chart. The stock’s relative strength line notched a new high as well to support the breakout’s strength.
Shares closed below the 113.22 entry on Tuesday. Additionally, the breakout occurred in lighter-than-normal volume. Dorman Products also remains 10% below a 123.06 cup-base entry. The firm is expected to report Q2 earnings before the market opens on July 25.
Elsewhere, solar energy stocks led the downside in the IBD 50 index, with Enphase Energy (ENPH) and Daqo New Energy (DQ) down 8% and 4%, respectively.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
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