Indexes extended Monday’s weakness into this morning’s trading, as a new warning in the retail sector chilled the stock market.
The Nasdaq composite fell 0.4% and dipped below the 21-day exponential moving average. The line had been offering the Nasdaq and other major indexes support, so the drop is a potential risk.
But a half-hour into the session, indexes traded off the opening lows.
The S&P 500 was down 0.5% and the Dow Jones Industrial Average lost 0.6%. Both indexes were trying to hold to their 21-day lines.
Volume fell on the NYSE and Nasdaq compared with the same time on Monday.
This morning’s selling comes after the stock market faded Monday, although it closed higher.
U.S. Stock Market Today Overview
|Last Update: 10:10 AM ET 6/7/2022|
The Reserve Bank of Australia lifted its key policy interest rate by 0.5 percentage point, which was more than expected. The news contributed to a drop in many world markets. But U.S. Treasury yields fell 5 basis points to 2.99%.
Target Shakes Retail Sector
Target (TGT) tumbled more than 5% in heavy trading after the retailer warned of shrinking profits because it is overstocked with unwanted merchandise that will force it to cancel orders or offer discounts.
The forecast reflects a mismatch between supply in stores and shifting demand among consumers. Walmart (WMT) fell in sympathy, down 2.4%. SPDR S&P Retail ETF (XRT) fell 2.2%, extending a downward trend.
Target’s warning comes nearly three weeks after the retailer missed earnings estimates due to inventory problems and higher costs.
Tesla (TSLA) was another big mover, down 2.7% in active trading.
But J.M. Smucker (SJM) climbed more than 3% in heavy trading. The food, beverages and pet food company beat April-quarter expectations, but warned that a voluntary recall of Jif peanut butter will impact full-year earnings. The stock is rebounding after snapping a four-day losing streak Monday.
IBD 50 Outperforms Stock Market
The Innovator IBD 50 ETF (FFTY) outperformed the stock market with a 0.5% increase. Arch Resources (ARCH) led the IBD 50 with a 7.6% jump to almost a new high. Jefferies upgraded the coal stock to buy from hold and lifted the price target to 225 from 160.
Jefferies also upgraded other coal stocks, including Warrior Met Coal (HCC) and Peabody Energy (BTU). Both rose sharply and are forming the right side of bases.
Darling Ingredients (DAR) rose above the 85.02 buy point of a cup-with-handle base, but volume is light and the price gain is unconvincing so far.
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