The stock market traded lower Monday as President Joe Biden announced a $5.8 trillion budget that calls for a substantial increase in defense spending. But defense stocks fell.
The Nasdaq fell 0.1%. The S&P 500 lost 0.4%. The Dow Jones Industrial Average fell 0.8%. Small caps also were down, with the Russell 2000 off 1.3%.
Volume fell on the Nasdaq and the NYSE compared with the same time on Friday.
Consumer Discretionary Select Sector SPDR (XLY) soared 1.9%, making consumer discretionary the biggest gainer among the S&P sectors.
Tesla (TSLA), the second largest holding in the consumer discretionary ETF, rose about 7% after the company said it plans a new stock split. Amazon (AMZN), the top holding in XLY, gained 0.9%.
U.S. Stock Market Today Overview
|Last Update: 12:28 PM ET 3/28/2022|
Tesla Announces Stock Split
“Tesla will ask shareholders to vote at this year’s annual meeting to authorize additional shares in order to enable a stock split,” the company said in its Twitter account. The size of the split was not mentioned. Tesla split its stock 5-for-1 in August 2020. After its last stock split, Tesla shares shot up 13% on the day of the announcement but then fell 16% in the following week. Three months later, the stock was back up 17%, according to Dow Jones Market Data.
President Biden on Monday released a $5.8 trillion budget, which includes $813 billion for defense spending, more than double the 1.6% boost the administration had sought for last year’s defense budget, The Wall Street Journal reported. The proposed budget includes aid for Ukraine in its fight against Russian aggression.
Major defense contractors Lockheed (LMT), Northrop Grumman (NOC) and General Dynamics (GD) all fell more than 1% on the news. SPDR S&P Aerospace & Defense ETF (XAR) fell 2.3%.
The price of U.S. crude oil tumbled 6.5% to $107 a barrel after rising nearly 9% last week. Energy Select Sector SPDR (XLE) fell 2%, making it the weakest S&P sector ETF.
Staar Surgical (STAA) won Food and Drug Administration clearance for its implantable nearsightedness lens on Monday, leading STAA stock to soar nearly 10%.
Staar says its Evo lens is an alternative to laser vision correction for people reliant on glasses or contact lenses. Surgeons can also remove the lens if needed. The company estimates there are 100 million potential candidates for the implantable lens in the U.S.
The stock is still a long way down from the 157.94 cup-with-handle entry that it hit last August. The stock has been trying to rebound from its long downward trend.
Apple Shares Fall On iPhone SE Report
Apple fell 0.8% after paring opening losses, on track to snap a nine-day win streak. A Nikkei Asia report said the company plans to make about 20% fewer iPhone SEs next quarter. Apple cited weaker demand for the lower-cost model, the report said.
The Apple+ film “CODA” won the Oscar for best picture. It is the first time a streaming service wins the top Oscar.
Netflix (NFLX) also came away with an Oscar. Jane Campion won best director for “The Power of the Dog.” Netflix shares fell 0.9%.
Capital Products Partners (CPLP) shot up another 4% Monday, adding to the 15% gain it posted on Friday. Thinly traded CPLP is one of several shipping companies that were gaining Monday, including Costamare (CMRE), Zim Integrated Shipping (ZIM) and Matson (MATX), all three of which are IBD 50 stocks.
Innovator IBD 50 ETF (FFTY) rose 0.4%. Vertex Pharmaceuticals (VRTX) broke out of a cup-without-handle base but the stock faded below the entry at midday. Volume was only slightly above average. The relative strength line has backed away from highs.
Murphy USA (MUSA) rose above the 195.78 buy point of a cup-with-handle base but volume faded. Murphy USA, which was discussed in IBD Stock Spotlight last week, is a chain of lower-cost gas stations. The buy range goes to 205.57.
Brown & Brown (BRO) broke out of a flat base in heavy volume. The buy range goes from the 70.85 entry to 74.39. The company is part of a group of insurance stocks that have been outperforming.
Follow Michael Molinski on Twitter @IMmolinski
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