The major stock market indexes fell to start a holiday-shortened trading week, but were rallying from session lows on Tuesday afternoon.
The indices were far from this morning’s lows. The Nasdaq trimmed its loss to 0.1% in midday trading. The Dow Jones Industrial Average fell 0.5%. The S&P 500 lost 0.3%. The Russell 2000 was down 0.5%.
Nasdaq 100 tracker Invesco QQQ Trust (QQQ) ETF improved on major losses and fell 0.2%. The First Trust Nasdaq 100 Equal Weighted ETF (QQEW) fell 0.8%.
The Innovator IBD 50 ETF (FFTY) pared earlier losses and fell 0.1%. NYSE and Nasdaq volume fell from Friday’s levels at the same time of day. (The stock market was closed on Monday for the June 16th holiday.)
The housing market surprised investors with higher-than-expected May and June numbers.
Housing starts in May were much higher than expected: 1.631 million annualized units versus the consensus estimate of 1.4 million, and well above April’s revised 1.34 million. Permits of 1.491 million also surpassed the 1.433 million forecast and showed strength in the housing market.
June’s housing market index came in at 55 versus 50 expected, according to Econoday.
The yield on the 10-year US Treasury fell 5 basis points to 3.72%.
The CME FedWatch tool showed odds of over 70% for a quarter-point hike at the July Fed meeting. Fed Chairman Jerome Powell is expected to address the House of Representatives’ Financial Services Committee at 10 a.m. ET on Wednesday. The meeting is the first of a semi-annual report on US monetary policy.
Crude fell 1.8% to $70.63 a barrel. Bitcoin price gained 4% to $27,505.
European stocks finished lower, with Germany’s DAX down 0.6% and Paris’ CAC 40 down 0.3%. London’s FTSE also lost 0.3%.
Stock Market Engines: China’s E-Commerce Stocks Sink
Alibaba (BABA) fell 4.3% on news that CEO Daniel Zhang will step down on Sept. 10, to be replaced by Alibaba co-founder Eddie Wu. Wu is also currently the president of Taobao and Tmall Group.
Alibaba co-founder Joe Tsai will assume the presidency of the Chinese e-commerce giant. In March, the company announced it was splitting into six different groups, including Taobao Tmall Commerce Group.
Tmall Taobao will be separated once again. It runs business-to-business and business-to-consumer online retail operations under Alibaba.Taobao Tmall is increasing the adoption of AI-powered technology.
BABA shares retook the 50-day moving average last week and fell slightly below the 200-day line today.
Dice therapy (DICE) was up 37% in massive volume on news that Eli Lilly (LLY) to acquire the biopharmaceutical company for $2.4 billion in cash. Dice specializes in treatments for autoimmune diseases. The deal is expected to close in the third quarter.
Eli Lilly shares rose 1.4%. LLY is in the 20% profit taking zone of a cup basis with a buy point of 375.25.
Avis Budget Group (CAR) jumped 8.3% in heavy volume after Morgan Stanley upgraded the car rental company to overweight from 182 and increased its price target to 230 from 182.
IBD 50 stocks hit an all-time high
Allegro Microsystems (ALGM) climbed 3.3% in above-average volumes. The shares of the IBD 50 stock are in a base cup with a buy point of 48.72.
symbolic (SYM) took a break from last week’s all-time highs and fell 5.5% as of midday. The AI-focused robotics company is now the biggest loser in the IBD 50.
Another IBD 50 stock, Amphastar Pharmaceuticals (AMPH), recovered from an initial decline to gain 1.8% in high volume and hit another all-time high. The stock is above the 20% profit zone of a cup-with-a-handle long basis with a buy point of 44.15. AMPH has nearly doubled this year so far.
ELF Beauty (ELF), also in the IBD 50, rallied 3.4% after BofA Securities raised its price target to 120 from 105 and maintained a buy rating on the seller of cosmetics and consumer products skin care.
The shares have shown dominance and hold a perfect IBD Relative Strength Score of 99, meaning they have outperformed 99% of the shares in the IBD database in terms of price performance over the past 12 months. The shares have gained 94% so far this year.
Stock Exchange Action: Biotech Tanks on the Move FDA
Atmus filtration technologies (ATMU) rose 4.5% after several analysts initiated coverage on the maker of filters for industrial and heavy equipment. Wells Fargo has set an overweight rating with a price target of 24, while Goldman Sachs has started with a buy rating and a price target of 30.
The company was listed on May 26 at 19.50 per share.
Biotechnology Arcellx (ACLX) plunged 7% in heavy volume after the Food and Drug Administration suspended its investigational new drug to treat a type of blood cancer after a patient died.
Stocks have triggered sell signals. The stock fell further below its 50-day moving average and erased a sizable gain from the 35.26 buy point.
Follow Kimberley Koenig for more stock market news on Twitter@IBD_KKoenig.
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