Dow Jones futures were little changed after hours, along with S&P 500 futures and Nasdaq futures. The stock market took further losses on Wednesday as rising government bond yields, Apple iPhone troubles and rising cases of China Covid added selling pressure on major indices.
The Nasdaq is near its bear market low, posting its worst closing price in more than two years. The Dow Jones interrupted an important level.
Apple (AAPL) fell again and put down a fresh bear. AAPL shares threaten to fall below $2 trillion value. Tesla (TSLA), which also set another bear market low, rose modestly. But that only mitigated a steep weekly loss.
Energy stocks fell as crude oil and natural gas prices fell, with natural gas and coal producers the hardest hit.
But whether these supplies really progress from here depends very much on whether volatile energy prices rise.
After the close, egg producer Cal Maine (CALM) reported rising earnings that slightly missed fiscal Q2 views. CALM shares fell 5% in extended trading, even with sales up 110% and the egg producer announcing a dividend of $1.35 per share. Shares fell 2.5% to 62.19 during Wednesday’s regular session. That pulled CALM shares back within the 5% chase zone of a 60.11 buy point. But Cal-Maine could open under that entry on Thursday.
Dow Jones Futures Today
Dow Jones futures were little changed from fair value. S&P 500 futures rose slightly and Nasdaq 100 futures 0.25%.
The yield on 10-year Treasury bills fell 2 basis points to 3.87%.
The stock market continued to fall, with all major indices falling more than 1%.
The Dow Jones Industrial Average fell 1.1% on Wednesday trading on the stock exchange. The S&P 500 index fell 1.2%. The Nasdaq composite was down 1.35%. The small-cap Russell 2000 lost 1.6%.
Apple stock fell 3.1% to 126.04, an 18-month low. TrendForce cut its 2022 iPhone shipment forecasts due to recent lockdowns at Foxconn’s Zhengzhou base. And it also revised its forecast for early 2023 shipments, citing Foxconn’s labor shortage.
The Dow Jones tech giant is on track for its sixth straight weekly loss and its worst monthly loss in four years. The AAPL share valuation ended at $2.005 trillion.
Tesla rose 3.3% to 112.71 after falling 11.4% on Tuesday, ending a seven-day losing streak. The EV giant is still down almost 15% this month. Late Wednesday evening, Morgan Stanley analyst Adam Jonas lowered his TSLA share price target to a still hefty 250, but also lowered his fourth-quarter delivery target to just 399,000 EVs. Tesla climbed 1% overnight.
US crude oil prices fell 0.4% to $79.23 a barrel. Natural gas futures fell 5.8%.
The yield on 10-year Treasury bills rose 3 basis points to 3.89%. That’s 49 basis points higher than the low of 3.4% on Dec. 7, with almost all of the gains since Dec. 15.
Among the growth ETFs is the iShares Expanded Tech-Software Sector ETF (IGV) lost 1.1%. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.3%. Reflecting more speculative story stocks, ARK Innovation ETF (ARKK) fell 0.5%, marking a new five-year low. ARK Genomics ETF (ARKG) lost 0.6%, just above the June low. Tesla stock is still a major stock in Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) plummeted 4% and the Global X US Infrastructure Development ETF (PAVE) fell 1.75%. US Global Jets ETF (JETS) decreased by 2.4%. SPDR S&P Homebuilders ETF (XHB) decreased by 2%. The Energy Select SPDR ETF (XLE) fell 2.2%, with XOM and CVX stocks easily the top components, and SLB stocks tied for third. The Financial Select SPDR ETF (XLF) decreased by 0.35%. The Care Select Sector SPDR Fund (XLV) reported 0.65%.
Energy supplies to keep an eye on
Exxon shares fell 1.6% to 108.38, back below the 50-day line a day after recently retaking that key level. XOM shares are priced at 114.76 buy point from level ground above a previous consolidation. But a move above Tuesday’s high of 110.47 could provide an early entry.
Chevron stock is much like Exxon Mobil’s. Shares fell 1.5% to 176.98, falling below 50 days. CVX stock has a flat base in addition to a previous consolidation, with a buy point of 189.78, according to MarketSmith Analysis. Investors could use 180.33, just above Tuesday’s high, as an early entry into CVX stock.
Schlumberger shares fell 1.7% to 52.60, finding support near the 10-week line. SLB stock has a 16% consolidation deep above/next to a low cup base. The official buy point is 56.14. But investors could use 54.28, just above the December 5 high of 54.18, as an early entry SLB stock.
Shares of Valaris fell 2.6% to 64.74, up slightly after testing the 10-day, 21-day and 50-day lines. The offshore drilling company has a buy point of 70.27 from a 17% deep bowl base over a deep one cup-with-handle cartridge. The buy point is 70.27. Investors could use 67.75, just above Tuesday’s high, as an early entry. That could turn into a good buying point for handles in a matter of days.
First Solar fell 2.7% to 146.17, losing further ground from the 50-day line, but emerging from an intraday low of 142.35. FSLR shares need some work and can easily go bust from this point. Ideally, other solar stocks, which are even harder hit, will improve as well. But see if First Solar can regain its 50-day and 21-day lines. There could then be a trendline, or perhaps a move above the December 21 high at 162.20, to offer an early entry. FSLR shares could have a fresh base by the end of next week.
The stock market experienced another tough session on Wednesday.
The Dow Jones, which posted gains on Tuesday, was unable to resist Wednesday. The Dow closed below its rising 50-day moving average for the first time since Oct. 21.
The S&P 500 continued to fall from its rising 50-day line. The reference index remained above last Thursday’s low, but ended with its worst close since November 9. The top performers of the S&P 500, General (GNRC) and Tesla stock, were the S&P 500’s biggest losers in 2022. Not exactly inspiring.
The Russell 2000 broke Thursday’s low to reach its worst level in two months.
The Nasdaq composite fell just below 135 points from its October 13 bear market low. The technology-heavy index ended with its weakest close since July 2020. Apple stock and a slew of other growth names slumped.
Until there is clarity on the Fed’s endgame and economic outlook — including the surge in China’s coronavirus — the stock market is likely to be choppy at best. And the major indices are doing much worse than that right now.
What to do now
The stock market is not doing well. While certain sectors are doing better than others, it’s hard for stocks to make much headway. Sectors and individual stocks can also deteriorate quickly.
Investors can have small positions in some promising sectors, but should steer clear of growth for now. There’s nothing wrong with having everything in cash. It is crucial to keep your financial and mental capital intact.
But work on your watchlists. Many stocks across industries are near buying points, or could be soon as the market picks up. Focus on stocks with strong relative strength and key levels. Don’t rule out resilient names that don’t yet have a clear buying point.
If you’ve had a bad year, you’re not going to make it up in the last two trading days of 2022 while the market is struggling. Learn from your mistakes and prepare for the next sustained market rally in 2023.
Read The big picture every day to stay in sync with market direction and leading stocks and sectors.
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