The Dow Jones Industrial Average traded slightly higher in the stock market today as stocks trimmed earlier losses. Tech stocks led lower. During the last hour of trading, the major indices rose strongly from their lows for the day, while the Dow and S&P 500 turned positive.
Stock market today
At the close of the day, the Russell 2000 Small Cap Index was down 0.9%. Meanwhile, the Dow Jones closed lower than 0.1%. The S&P 500 closed slightly higher, down 0.1%. The Nasdaq composite remained negative with a 0.5% drop, after sinking as much as 3.9% earlier in the trading day.
Volume was higher on the Nasdaq and NYSE compared to Monday’s close, according to preliminary data.
Earlier Tuesday, Fed Chairman Jerome Powell commented that the Fed is committed to using the full range of tools to support the economy so that the recovery from the coronavirus pandemic is as robust as possible. In his speech to the Senate Banking Committee, he mentioned that inflation and employment remain well below the Fed’s targets.
This implies that a flexible monetary policy is likely to be maintained.
Meanwhile, there has been a sharp rise in yields on long-lived government bonds in recent days, reducing demand for riskier assets like growth stocks. Yields have risen to levels not seen since before the Covid-19 pandemic. Consequently, the shares of the major technology companies have been sold.
On CBOE, the benchmark 10-year US Treasury bond yield reached 1.38% before dropping a few basis points.
Elsewhere, the Innovator IBD 50 (FFTY) ETF took a heavy hit before cutting its loss to 2%, outperforming major indices on the downside. The stocks leading the decline in the growth-focused ETF were Tyrant Saurus Rex (TREX) and 360 DigiTech (QFIN), with respective losses of 9% and 6.6%.
Dow Jones today
The Dow Jones had a modest gain, as Disney (DIS) and Visa (V) led higher with gains of around 2% or more. Disney shares led the index with a gain of 2.8%.
The stock rose above the 5% buy zone from a flat-based buy point of 183.50 after exiting this zone in early February. The shares held near their highs in afternoon trading. Disney shares recently found solid support at the 50-day line, sending the stock straight past the buy point.
Disney was the stock of the day for Monday’s IBD, also adding to Swing Trader after bouncing off its 21-day exponential moving average.
Elsewhere, Apple (AAPL) cut an anticipated loss of more than 3% to 0.1% on Tuesday. Tech stocks previously issued a sell signal after falling below its 50-day line in recent days.
Shares of Apple have erased most of their gains from a recent entry of 125.49. The stock’s line of relative strength is also decreasing, which is a bearish sign.
House deposit (HD), Salesforce.com (CRM) and Walmart (WMT) were the worst performers on the index, falling 3.1%, 2.2% and 1.6%, respectively.
Home Depot shares fell as much as 4% on Tuesday, as the shares fell below their 50-day moving average. The shares were sold despite the home improvement retailer reporting better-than-expected fourth-quarter earnings and sales before the market opened.
Follow Rachel Fox on Twitter at @foxonstocks for more information on the market and Dow Jones reviews.
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