Stock Market Action Remains Weak; Indexes On Track For Weekly Decline

The major stock market indexes continued to struggle in midday trading. 

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The Nasdaq composite is the hardest hit of the major indexes today, down 3.3%. The S&P 500 is down 2.6% and the Dow Jones Industrial Average is down 2.3%. The Russell 2000 shed 3.1%. 

Indexes are trading near the lowest point of the day. NYSE volume is up 26.7% and Nasdaq volume is down 2.9% compared with the same time on Thursday.

The Nasdaq was on pace for a 5.6% loss for the week, and the S&P 500 was off 5%. The Dow’s weekly loss was 4.4%.

Oil stocks are down as crude prices drop to the $120-a-barrel level. Devon Energy (DVN) is down 6.3% while Imperial Oil  (IMO) is down 4.9%. Both dipped to their 21-day exponential moving averages. Comstock Resources (CRK) fell 2.7% but is holding above its 21-day exponential moving average.

Stock Market Action: DocuSign Continues Its Slide

DocuSign (DOCU) dropped nearly 25% today. It plummeted Thursday in extended trading after reporting a miss on Q1 earnings. DOCU reported a loss of 14 cents per share, while analysts’ consensus was looking for a profit of 46 cents, according to FactSet.

Management gave Q2 revenue guidance of $600 million to $604 million, the lower end of the range analysts were expecting.

Revenue increased 25% over Q1 of 2021, but that didn’t impress analysts.

Analysts didn’t waste any time lowering ratings and cutting price targets on DocuSign. Evercore cut its rating to in-line from outperform and cut its price target to 75 from 100 per share. Morgan Stanley maintains its equal-weight rating, but lowered its price target to 73 from 80. Other price-target cuts came from Piper Sandler, RBC Capital and JPM Securities, to name a few. 

The stock is near its 50-day moving average and 78.2% off its 52-week high.

Vail Resorts Soar On Earnings

Vail Resorts (MTN) is up 0.4% after it popped to start the day on Thursday’s positive earnings report after the market close. MTN reported April-quarter earnings per share of $9.16, beating analysts’ consensus estimate of $9.06, according to FactSet. Vail has 37 ski resorts in Colorado, Utah, California, Minnesota and Australia. 

The company updated its guidance and cited strength from increased travel as Covid concerns lessen. Vail annual earnings per share has an expected 161% growth rate for 2022 but a decline of 9% in 2023.

Credit Suisse maintained its outperform rating but raised its price target to 383 from 379. 

Vail shares are converging at the 21-day exponential moving average and the 50-day moving average. Shares are 33.8% off their 52-week high. Mutual fund ownership has grown to 1,168 in March 2022 from 1,135 funds in December 2021.

Chinese Stocks Rebound

May Chinese consumer price index numbers rose 2.1%, no change from April’s report. Chinese stocks made a rebound after yesterday’s drop, with ADR NetEase (NTES) up 2.8% in heavy volume.  NTES shares have been steadily increasing since they crossed the 21-day exponential moving average on May 13. 

ADR Bilibili (BILI) is up 0.8% after plummeting 14.8% yesterday on a negative Q2 earnings report.

The Cboe Market Volatility Index, or VIX, rose in the stock market sell-off. ProShares Trust Ultra VIX Short-Term Futures (UVXY), a leveraged ETF that tracks the VIX, climbed 10.9% today. 

The Innovator IBD 50 ETF (FFTY) is down 3.5%, dropping below the 50-day moving average and 21-day exponential moving average. 

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The post Stock Market Action Remains Weak; Indexes On Track For Weekly Decline appeared first on Investor’s Business Daily.