The stock market remained soft in afternoon trading on Monday after giving up modest gains midday. The results of the second quarter remain at the center of concerns.
The Nasdaq composite is trading down 0.3% while the Dow Jones Industrial Average rose 0.1%. The S&P 500 lost 0.1% at this time. Small caps outperformed, with the Russell 2000 almost flat.
Volume was lower on the Nasdaq and higher on the NYSE compared to the same time on Friday.
Only one security is listed in MarketSmith’s breakout list today. Therapeutic PTC (PTCT) exceeded the buy point of 45.19 of a cup base with handle. Volume was lackluster, despite a nearly 6% jump in the stock price. The biotech publishes its results Thursday after the close.
It’s no surprise that the stock market is easing after the Nasdaq rebounded 4.7% last week and 3.3% the week before. Moves above the 50-day moving average have left major indices on better footing this week.
Overview of the US stock market today
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Last Updated: 2:52 PM ET on 08/01/2022
Energy Select Sector SPDR (XLE) fell more than 2% as the sector lagged. The price of U.S. crude oil closed down 4.8% at $93.89 a barrel. The ETF is encountering resistance at the 50-day moving average.
IBD 50 down but Celsius roars
The Innovator IBD 50 ETF (FFTY) fell 0.1%.
Celsius Fund (CELH) led the IBD 50 with a 12% jump that took the stock close to its November high at 110.22. PepsiCo (PEP) has agreed to acquire an 8.5% stake in the fitness beverage company and will become its preferred distribution partner. PepsiCo is investing $550 million in cash for its stake. Shares of PepsiCo climbed 0.8% and are approaching a buy point of 177.72.
Manufacturer’s first source (BLDR) jumped 7.6% after the company announced a 127% increase in earnings per share earlier in the day.
American Tower (AMT) dipped below Friday’s breakout buy point of 271.19. So far, it seems like a normal drop.
Daqo New Energy (DQ) fell 5.4% on light volume. The stock continues to find support at its 50-day moving average.
Another busy week of profits for the stock market
The stock market is facing another busy week of earnings – a focal point of trading activity. So far, second quarter results have been underperforming and the outlook is darkening.
On Friday, 73% of S&P 500 companies had exceeded EPS estimates, below the five-year average of 77%, according to FactSet. S&P 500 companies beat EPS estimates by 3.1%, below the five-year average of 8.8%.
Combined with companies that have yet to report, earnings growth for the second quarter of the S&P 500 is 6%. That would be the lowest year-over-year growth rate since the fourth quarter of 2020, when profits rose 4%.
The earnings outlook for the third quarter is cautious. FactSet says analysts are lowering third-quarter EPS estimates by an above-average margin. The bottom-up EPS estimate, which combines the median estimates of all S&P 500 companies, fell 2.5%. The latest estimate (July 28) is looking for $57.98 versus $59.44 on June 30.
After today’s shutdown, fertilizer companies CF Industries (CF) and Mosaic (MOS) announce results The two attempt to form the right side of the bases. Diamondback Energy (FANG) and Devon Energy (DVN) are also configured to signal. Both are testing possible resistance at the 50-day average.
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