The stock market made some headway on Tuesday and was up in the last hour, near the highs of the day. Bank of Japan shocked investors, lifting the top end of their 10-year government bonds.
The S&P gained 0.4% while the Nasdaq reclaimed 0.1%. The Dow Jones Industrial Average rose 0.6%. The Russell 2000 small-cap index showed the most strength, up 0.8%. The Dow is the only index holding above its 50-day moving average.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF (QQQ) added back 0.2%.
Volume on the NYSE and Nasdaq was lower vs. the same time on Monday, as investors are getting into the holiday mood.
Crude oil gained 1.1% to $76.24 per barrel. The Energy Select Sector SPDR ETF (XLE) popped 1.9%. On the flip side, natural gas plunged another 8.9% and is trading at $5 per million British thermal units.
Bitcoin futures regain 1.6% to $16,760.
The 10-year Treasury note yield edged up 10 basis points to 3.69%. Bonds have come under pressure as the yield curve steepens, reversing after rallying on lower CPI numbers.
Bond Yield Surprise
Investors were taken back by the Bank of Japan’s flexible 10-year government bond policy.
The BOJ said it would allow the top end of the bond yield to rise to 0.5%, from the 0.25% currently in place. The move dropped the US Dollar versus the Japanese Yen, adding to ongoing concern of a global recession.
European markets were mixed, with the German DAX and Paris CAC 40 losing less than a point. However, the London FTSE 100 inched up 0.1% to close out the day.
Odds for a 25-basis-point hike at the February meeting stood at 66%, taking it to the 4.5%-4.75% range. Meanwhile, 34% are looking for a 50-basis-point hike, according to the CME FedWatch Tool.
Stock Market: Drug Stock Rebounds, Food Stock Tanks
Moderna (MRNA) clawed back a 7.2% gain, after three down days.
The stock pulled back on Dec. 15 after breaking out above the 21-day line. It extended above the 5% buy zone of a cup-with-handle base, with a 188.75 buy point, and turned lower. It is back in the 5% buy zone, which stretches to 198.19.
General Mills (GIS) dropped 4.1% and gapped down, despite reporting a positive fiscal Q2 2023 earnings report. The packaged food purveyor beat EPS and sales estimates, raising its guidance for fiscal 2023. But it cited inflation and supply chain issues as the largest factors impacting 2023.
The stock pulled back after being extended from a flat base with a 81.34 buy point. Shares are finding resistance at the 21-day exponential average.
Nike (NKE) was down 0.6% ahead of its fiscal Q2 2023 earnings release after the market close.
Stock Market Today: IBD 50 Movers
The Innovator IBD 50 ETF (FFTY) crept up 0.4%, in line with the major stock market indexes.
Super micro computer (SMCI) regained 7.5% in heavy volume after news it will be added to the S&P MidCap 400. The stock rebounded from yesterday’s 3% drop, where it found support at its 50-day moving average. Today’s move pushed the stock above its 21-day line, creating a support line.
The company ranks first in the Computer-Hardware/Peripheral industry group, which holds the 39th place out of 197 IBD groups.
Catalyst Pharmaceuticals (CPRX) popped over 11% in heavy volume, and is extended from the 5% buy zone of a cup-with-handle base with buy point of 16.76.
The biotech agreed to buy the rights to Eisai’s epilepsy medicine for $160 million. Piper Sandler liked the news, raising its price target to 20 and maintaining its overweight rating. Shares are trading around 18 in today’s session.
Arc Biosciences (RCUS), IBD 50’s biggest loser today, is down a catastrophic 28% in heavy volume. rival Roche (RHHBY) produced superior results over Arcus and Gilead Sciences (GILD) for its lung cancer treatment. GILD shares are down a tempered 2.8%. It is a top S&P 500 top loser on Tuesday.
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