Wall Street closes lower after Fed minutes, inflation data
The Dow Jones Industrial Average briefly rose more than 150 points Wednesday on cooler-than-expected inflation data, with the release of the Consumer Price Index. Meanwhile, minutes from the Federal Reserve’s latest policy meeting are due out in the afternoon.
The Labor Department’s March CPI report showed inflation rising 0.1% for the month, cooler than Wall Street’s expected 0.3% monthly rise. Year over year, the CPI increased 5%, below the 5.2% estimate. Core prices, which exclude food and energy, rose 0.4% on the month, with a one-year gain of 5.6%, both matching Wall Street’s estimates.
Meanwhile, first-quarter earnings season looms as JPMorgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) and PNC Financial (PNC) kick off bank earnings on Friday. Further, Delta Air Lines (DAL) reports Thursday and UnitedHealth (UNH) earnings are out Friday.
After Wednesday’s opening bell, the Dow Jones Industrial Average rose 0.4%, and the S&P 500 added 0.2%. The tech-heavy Nasdaq composite reversed slightly lower after giving up solid gains in morning action.
Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) advanced 0.6%, while the SPDR S&P 500 ETF (SPY) gained 0.5% early Wednesday.
The 10-year U.S. Treasury yield on Wednesday traded down to 3.37%. Last week, the 10-year yield hit its lowest level since mid-September, but is bouncing this week.
U.S. oil prices added to Tuesday’s gains, climbing more than 1% in early morning trade Wednesday. West Texas Intermediate futures moved above $82 a barrel. The Energy Information Administration’s weekly oil inventories are out at 10:30 a.m. ET.
On Tuesday, the Dow Jones Industrial Average rose 0.3%, while the S&P 500 inched lower. The tech-heavy Nasdaq composite dropped 0.4%.
Tuesday’s Big Picture column commented, “Selling never got intense on the Nasdaq, which closed lower by 0.4%. Breadth watchers liked the fact that winners had a slight edge over losers. But higher volume on the Nasdaq gave the index its second distribution day.”
Now is an important time to read IBD’s The Big Picture column with the stock market in an uptrend.
Dow Jones leader Boeing is nearing a flat base’s 221.43 buy point, according to IBD MarketSmith pattern recognition. Shares rose 0.6% Wednesday, just 5% away from the latest entry.
Cisco Systems fell further below a flat base’s 51.84 buy point amid a 1.4% fall Tuesday. CSCO stock topped the entry on March 31. Shares gained 0.3% Wednesday morning.
Visa shares moved closer to a cup base’s 234.40 buy point, climbing 0.9% Tuesday. V stock tacked on 1.2% early Wednesday.
Five Below tacked on 0.2% Tuesday, adding to Monday’s breakout gains past a 212.66 buy point in a flat base. Shares are in the 5% buy area that goes up to 223.29. The stock rose 1.1% Wednesday morning.
Backstory: On March, 15, Philadelphia-based Five Below, which operates 1,292 teen- and tween-focused discount stores in 42 states, closed out 2022 with an earnings and revenue beat. For the fourth quarter, Five Below earnings popped 23% to $3.07 per share, ending a three-quarter string of year-over-year declines.
IBD Leaderboard watchlist stock Floor & Decor moved within striking distance of a cup-with-handle’s 99.47 buy point. Shares rose 1% early Wednesday, breaking out past the latest entry.
Backstory: Floor & Decor operates 191 warehouse-format stores and six design studios across 36 states. It sells tile, wood, laminate, vinyl, and natural stone flooring products. It also sells decorative accessories. Earnings are seen slipping 2% this year before rising to 27% in 2024 and 24% in 2025.
IBD SwingTrader pick ServiceNow continues to move up the right side of a cup base with a 494.72 buy point. A potential handle is one day away from forming, which will display a 482.43 buy point. NOW stock gained 1.8% Wednesday morning.
Backstory: ServiceNow software tracks and manages services provided by information-technology departments. Also, its self-service tech portal enables workers to access administrative and workflow tools.
Vertex Pharmaceuticals continues to trade just under a cup base’s 325.29 buy point. VRTX stock was down 0.1% Wednesday morning.
Backstory: Vertex Pharmaceuticals researches and develops medical treatments for cystic fibrosis, sickle cell disease, muscular dystrophy, kidney disease and type 1 diabetes.