Market Gathers Steam Ahead Of Powell Speech; Apple, Microsoft Set Up Healthy Pullbacks

The Dow Jones Industrial Average pared early losses, dropping 0.2% midday Tuesday. The blue-chip index has found support at its 50-day line for eight trading sessions in a row.

X

The Nasdaq rose o.4% into the noon hour after losing ground Monday and Friday. The tech index has decisively cleared its 200-day moving average — a line of resistance since April 2022. The index gained over 10% this year.

The S&P 500 is poised to set off a golden-cross buying signal if the 50-day line moves above the 200-day moving average. The index rose just 0.1% at 12 p.m. ET.

The small-cap Russell 2000 lagged with a 0.6% fall.

Volume on the NYSE was slightly higher and the Nasdaq lower vs. the opening hour on Monday.

Crude oil rallied over 3% to trade at $76.83 per barrel. An earthquake in Turkey’s Iskenderun Port set ablaze shipping containers and forced freight carriers to reroute to other ports. China’s recovering demand has also driven prices up for two days in a row. The yield on the benchmark 10-year Treasury note was flat at 3.64%.

At 12:40 p.m. ET, Fed Chair Jerome Powell will speak at the Economic Club of Washington, D.C. The Fed raised rates by a quarter basis point to 4.5%-4.75% last week while pointing to encouraging pockets of “disinflation.”

However, Friday’s jobs data threw water on optimism that tightening will end soon. In January, the economy added  517,000 new jobs, a huge leap after December’s revised 260,000. This will be the first time Powell speaks since the labor report.

How Did Your Online Broker Do In IBD’s 2023 Best Online Broker Survey?

Dow Jones Tech Leaders On Watch

Dow Jones tech stocks showed signs of resilience as low-volume pullbacks suggest higher prices ahead.

On Monday, Apple (AAPL) pulled back in light volume after surging Friday. Shares are up 1%, remain above their 200-day line and may provide an early entry at 157.60 if the rally continues.

Also above its 200-day line, Salesforce (CRM) is on watch. Microsoft (MSFT) is rebounding 3% after finding support at its 200-day line. An entry at 264.02 is possible.

Stocks Moving Today

CVS Health (CVS) is up 0.5% after news it plans to buy Oak Street Health (OSH) for $10.5 billion. OSH stock gapped up more than 30% in strong volume. Oak Street’s senior-focused service will expand CVS’ entry into primary health care.

Activision Blizzard (ATVI) rose over 5% after earnings. Microsoft’s bid for the video gamer remains in uncertain regulatory territory, here and abroad.

Shares of BP (BP) rose more than 5% after earnings. The company increased its dividend by 10% and is buying back more of its shares to the tune of $2.75 billion. The British oil giant has a strong Composite Rating of 89, but its RS Rating lags at 75.

Dow Jones component Boeing (BA) announced it will cut 2,000 jobs. Shares rose 1% at midday.

The AI race is on. Google-parent Alphabet (GOOGL) could launch its own AI-powered chatbot, called Bard, taking on rival Microsoft’s ChatGPT. GOOGL shares rose over 2% midday Tuesday. Microsoft has a surprise event that will likely throw light on integrating ChatGPT with its search engine, Bing.

Elsewhere, Chinese internet giant Baidu (BIDU) skyrocketed after unveiling plans to launch its own AI chatbot. Shares rose 10% in strong volume.

Strong rental-car demand gave Hertz (HTZ) a 7% boost as it reported earnings. Surging leisure travel and continued automaker production roadblocks contributed to a strong quarter.

Meme stocks Bed Bath & Beyond (BBBY) and AMC (AMC) are moving today. Bed Bath & Beyond has plans to raise $1 billion by issuing new shares. Movie theater chain AMC intends to charge different prices, based on the seat’s location.

BBBY has crashed over 40% while AMC is lower by over 8%.

Please follow VRamakrishnan @IBD_VRamakrishnan for more news on the stock market today.

YOU MAY ALSO LIKE:

Stock Market Forecast For 2023: Challenges Abound

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It

IBD Live: Learn And Analyze Growth Stocks With The Pros

MarketSmith’s Tools Can Help The Individual Investor