Dow Jones Fights As Fed Meeting Starts; Microsoft Dips Ahead Of Earnings; GE Stock Dives

The Dow Jones Industrial Average briefly fought its way back into positive territory before turning down again as the latest Federal Reserve meeting kicked off. Microsoft (MSFT) was in negative territory as it got set to post earnings. General Electric (GE) tumbled on disappointing results.

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The latest meeting of the Fed Open Market Committee kicked off Tuesday. The central bank is set to give more guidance on its approach to tapering and interest rate hikes Wednesday. Rates are seen rising as soon as March. Treasury yields inched up nearly five basis points to 1.78%.

Oanda senior market analyst Edward Moya said investors who were on the sidelines amid market volatility were drawn in by the early selling.

“Wall Street was staring at these discounts and said they are too good to pass up,” he said in a note to clients. “The geopolitical risks to the outlook are going to remain elevated going forward, but pricing in an overly aggressive Fed may have been overdone.”

Nasdaq Falls, Growth Stocks Struggle

The Nasdaq was struggling to shake off early losses heading into the close. It was down 0.8%. Datadog (DDOG) was one of the worst laggards, falling around 5%.

The S&P 500 also fought its way back but remained down 0.2%. GE stock was the worst S&P laggard, while Moderna (MRNA) impressed with a gain of over 3%.

The S&P sectors were mixed. Energy and financials were making the best gains. Technology was the worst.

Small caps were well off lows for the day, with the Russell 2000 down 0.2%.

Growth stocks were struggling, with the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, down 0.4%.

Dow Jones Today: American Express Pops

American Express was the top gainer in the Dow, rising more than 9% in heavy volume. It was boosted on Q4 earnings came in above beat expectations early Tuesday.

The credit card giant also boosted forecasts for sales and earnings in 2022 due to record credit card spending.

Shares surged past its conjoined 200-day, 50-day and 10-day lines. It is now closing in on a potential early entry above the recent high of 176.82.

Johnson & Johnson (JNJ) rose more than 3% despite mixed results. It was lifted due to upbeat guidance.

Microsoft was down around 1% as it gets set to post results today after the close.

GE Stock Plunges On Earnings

GE stock was hit hard after issuing disappointing outlook.

It sold off in heavy volume and lost further ground on its declining 50-day moving average. While it was off lows for the day, GE stock was down nearly 6%.

The company sees adjusted EPS of $2.80-$3.50 for 2022, below analysts’ consensus, with the firm blaming inflationary pressures.

GE expects revenue growth in the high single digits and free cash flow to more than double to $5.5 billion-$6.5 billion, driven by strength in power and health care.

The 2022 outlook assumes continued recovery in aviation, and improvements in the other industrial segments, offset by some adverse impact in onshore wind.

These Energy Stocks Impress

A few names stood out with bullish behavior as energy stocks outperformed

A number of energy stocks were flexing their muscles Tuesday. Matador Resources (MTDR) and Cactus (WHD) managed to impress.

Matador Resources is bouncing off its 10-week moving average after a breakout from a cup base failed.

The relative strength line is at new highs, a good sign while the market is in the grip of a correction. Both earnings and stock market performance are exceptional.

Cactus moved back above its old cup base buy point of 47.04. The relative strength line is looking mighty at the moment.

The firm, which has been seeing increasing institutional investment of late, designs, manufactures, sells and rents wellheads and pressure control equipment for oil and gas drillers.

The energy sector has been very strong so far in 2022. The Vanguard Energy Index Fund ETF (VDE) was up nearly 4%.

It is also up almost 13% so far in 2022. This compares very favorably with the S&P 500’s decline of more than 8%.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.

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