Dow Jones Declines Amid Janet Yellen Comments; Walmart Rises On Earnings; These Breakouts Fizzle

The Dow Jones Industrial Average fell in today’s market, extending its losses from Monday. The tech-heavy Nasdaq erased the day’s earlier gains to join the Dow and S&P 500 in the red, as the major indexes sold off in the final 15 minutes of trading.


Dow Jones In Stock Market Today

At the close of the day, the Nasdaq composite held a loss of 0.6%. The S&P 500 traded around 0.9% lower. The Dow Jones industrials declined 0.8% and the small-cap Russell 2000 index fell about 0.7%. Volume was lower on the NYSE and higher on the Nasdaq vs. the close on Monday, according to early data.

Stocks’ negative reversal follows last week’s declines on fears of rising inflation. IBD’s market outlook was downgraded to “uptrend under pressure” last Wednesday, after the Nasdaq hit its lowest level in six weeks.

On Tuesday, Treasury Secretary Janet Yellen spoke about the benefits of higher corporate taxes and unions to the Chamber of Commerce.

“With corporate taxes at a historical low of 1% of GDP, we believe the corporate sector can contribute to this effort by bearing its fair share,” the former Fed chairwoman told the Chamber’s Global Forum on Economic Recovery. “We propose simply to return the corporate tax toward historical norms.”

Yellen also said lower-wage earners in particular have not seen enough wage growth over the past several decades, even as productivity rose. She said unions are part of the answer to this problem.

Among the S&P sectors, real estate and health care were leading, while energy was the biggest laggard.

Energy stocks struggled amid rumors that Iran could soon be permitted to start exporting crude oil again. Oil prices dropped sharply. West Texas Intermediate crude fell 1% while the Energy Select Sector SPDR Fund (XLE) fell more than 2%.

Stocks In The News

Two stocks from the MarketSmith Growth 250 list broke out from proper bases. First Financial Bankshares (FFIN), Maravai Lifesciences (MRVI) and Vista Outdoor (VSTO) all traded above buy points on Tuesday but faded at the close. All three closed below their buy points.

First Financial broke out from a cup-with-handle base with 51.33 buy point. Shares briefly traded within the buy zone which tops out at 53.89. The base formed entirely above the 50-day line, a bullish sign.

Meanwhile, shares of new IPO stock Maravai Lifesciences traded above a 40.34 buy point of a consolidation. Shares remained below this key buy area in afternoon trading.

Finally, leisure products company Vista Outdoor traded above a 38.46 consolidation buy point. Shares ended up back below the buy area in afternoon trading after falling nearly 2%.

As for growth stocks, the Innovator IBD 50 ETF (FFTY) declined 1.6%. The ETF is close to reclaiming the 50-day line. IBD 50 stocks leading the downside Tuesday included Builders FirstSource (BLDR) and Boise Cascade (BCC), with losses of over 4% each.

Dow Jones Today

In the Dow Jones industrials, several blue chips held losses of more than 1%, including Chevron (CVX), Caterpillar (CAT) and Honeywell (HON).

Disney (DIS) continued 0.2% lower to extend a downtrend. Shares of Disney stock tumbled Friday after the company reported mixed fiscal Q2 results.

The theme parks and media giant had been working on a new flat base with a 203.12 buy point. But the recent slide breached the bottom of the base. At nearly 17% off the left-side high, the flat-base pattern is no longer valid, according to IBD MarketSmith chart analysis.

Elsewhere, Walmart (WMT) was a top performer, rising more than 2% on strong earnings. The stock was able to reclaim its 200-day moving average, MarketSmith analysis shows.

JPMorgan (JPM) continued trading inside the buy range of a 161.79 buy point from a flat base. The stock traded near the bottom edge after shares fell 1.4% on Tuesday. JPMorgan stock maintains decent IBD Ratings, with an 82 Relative Strength Rating and a strong 92 Composite Rating.

Fellow blue-chip financial Goldman Sachs (GS) also fell over 1% as shares remain inside the buy zone from a cup base with a 356.95 buy point, according to IBD MarketSmith chart analysis. Shares originally broke out past the buy point a week ago, then briefly fell. The stock maintains a strong 88 RS Rating and a near-perfect 98 Composite Rating.

Follow Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.


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