Stock Market Can’t Find Mojo; Trump Stock In Peril

Stock market indexes struggled to add points in the first half of Tuesday’s session. Cathie Wood’s ARK fund held a $20 million profit after meme stock Zoom Video (ZM) faded off a big rally. And Donald Trump’s Digital World (DWAC) social media deal may be dead.

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The Dow Jones Industrial Average lost 0.4% while S&P 500 shed 0.1%. The Nasdaq ran on place. The Russell 2000 small-cap index outperformed, adding 0.7%.

NYSE volume rose while Nasdaq volume fell compared to midday Monday levels.

The S&P 500 whipsawed across the 50-day line Friday and Monday so today’s tape will be instructive. The index adding to gains will reinforce the bullish argument, while a trip back to last week’s lows will certainly please bears.

Meanwhile, the small-cap Russell 2000 index continues to outperform in 2023, with more bullish moving average positioning than the S&P 500 and Nasdaq composite.

Stock Market Today: Trump, Wood And Target

Digital World, the SPAC parent of former President Donald Trump’s Truth Social platform, delayed filing an “initial business combination” for the third time. Company bylaws permit up to four four-month extensions.

In January, Rolling Stone reported that Trump “looks to ditch his own social media site.” Facebook-parent Meta Platforms (META) lifted Trump’s suspension Feb. 9 and the future of DWAC stock remains in doubt. DWAC shares fell 0.3%.

Wood’s ARK innovation fund (ARKK) holds 10.6 million shares of Zoom Video, or 5.74% of the portfolio at the end of 2022. ZM stock rocketed more than 500 points at the start of the pandemic, topping out in October 2020. It then plunged more than 90% before bottoming out at the end of 2022. It traded higher by nearly 2% in the first half, lower than the 8% overnight rally.

Big box retailer Target (TGT) surged 3% after beating Q4 profit and sales estimates. Shareholders choose to ignore lowered EPS guidance for Q1 and the fiscal year. Comparative sales grew 0.7% year-over-year, better than estimates for a low-single digit decline.

Quiet Session So Far

On the economic front, the S&P December Case-Shiller Home Price Index slid to 4.6% from November’s 6.8%, and well below the 5.8% consensus.

February consumer confidence fell to 102.9 from January’s 106.0 and well below 108.4 consensus. The reading suggests buyers are growing more cautious due to inflationary headwinds.

Also, the closely watched Chicago purchasing managers index (PMI) for February fell to 43.6 vs. 45.0 consensus. Readings under 50 indicate economic contraction.

Crude oil surged 2% to a 12-day high at $77.50. Asian markets were mostly higher while European bourses posted small losses.

The 10-year Treasury note yield pushed toward the psychological 4.00% level, trading 2 basis points higher at 3.94%.

Odds for a 0.25% rate hike at the March meeting stand at 74%, according to CME FedWatch.

In the crypto world, Bitcoin ran in place above the $23,000 level.

Stock Market Winners And Losers

Dow Jones component Chevron (CVX) traded 1.2% lower.

The oil giant will raise the “targeted annual share buyback rate” to $17.5 billion. It also reaffirmed long-term targets. The move could draw renewed White House criticism after’s the company’s controversial $75 billion buyout announcement in January.

Shift4 Payments (FOUR) rocketed 13% on strong earnings and guidance. FOUR shares crossed back above recently broken 21-day and 50-day lines.

Cruise lines can’t get a break, despite the industry’s post-pandemic recovery. Shares of big players are massively diluted after secondary and debt offerings needed to stay afloat.

Norwegian Cruise Line (NCLH) was the latest to feel the pain, plunging 11% after posting a large quarterly loss, even though revenue rose an astounding 211.7% year over year.

IBD 50 And Leaderboard Highlights

IBD 50 stock DoubleVerify (DV) has formed a cup-with-handle base and 28.99 buy point. The handle is still under construction, with the last week of price action holding near the 21-day exponential moving average. DV stock rose 0.5%.

Enterprise software developer Qualtrics International (XM) gapped above the 16.03 buy point of a cup base in January, posting the highest volume since the 2021 initial public offering (IPO). It has spent all of February forming a flat base with a new 17.28 buy point. XM stock traded 1.8% higher.

Follow Alan Farley on Twitter at @msttrader.

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