Stock Market Clears Morning Gains on Russian Pipeline Retaliation

Major stock market indices gave up gains in afternoon trading Friday morning and plunged to lows for the day. Market players are hitting the exits on the news that Russia will suspend deliveries of natural gas pipelines to Germany.


The Nasdaq changed course, now 0.5% lower. The S&P 500 lost 0.2% while the Dow Jones Industrial Average lost 0.2%. The Russell 2000 small-cap ETF (IWM) is trading 0.2% lower.

The S&P 500 and small-cap Russell 2000 have hit their 50-day moving average resistance lines. The big-tech Nasdaq 100 tracking ETF Invesco QQQ Trust (QQQ) accelerated the downtrend and posted losses of 0.6%.

NYSE and Nasdaq volumes fell by double digits from the same time on Thursday as investors prepare for an extended holiday weekend.

Crude oil is up less than 1% and is now trading just below $87 a barrel. Natural gas has sold 4.8% despite the pipeline news, which remained below the psychological level of $9. The SPDR Select Energy ETF (XLE) is up 1.4%.

Bitcoin futures are up, adding 1.1% to $19,910.

The German DAX has gained 3.3%, the FTSE 100 1.9% and the CAC 40 2.2% in late European action.

The yield on the 10-year US Treasury has fallen to 3.20%.

Markets are now forecasting a 58.0% chance that the Fed will raise interest rates by 75 basis points in September. 42.0% expect an increase of 50 basis points.

More people entering the workforce

The employment rate was strong at 62.4%, against 62.1%.

Average hourly wages fell slightly month-on-month to 0.3%, against expectations of 0.4%. The year-over-year change in hourly wages of 5.2% broke the consensus of 5.3%.

The unemployment rate rose to 3.7%, above expectations of 3.5%, as more workers looked for a job.

315,000 jobs outside the agricultural sector in August beat the consensus of 293,000 and recorded fewer jobs than July’s 528,000.

308,000 private payroll jobs blew away 280,000 expectations, while manufacturing payrolls saw strength at 22,000 versus 19,000.

Stock Market: Medical Game Breaks Out, Reaches Buying Point

Medical Diagnostic Company Meridian Life Sciences (VIVO) broke out of a handle cup and hit the 33.27 buy point on the MarketSmith chart. The stock has pulled back 0.9% after morning gains.

Meridian has a relative strength of 97, telling investors that it has outperformed 97% of the stocks IBD tracks over the past 12 months. The stock is also trading above the 21-day exponential moving average.

Clean energy company AES Corporation (AES) broke from a head-and-hand basis, reaching as high as the 26.46 buy point and trading within the 5% buy zone. The stock is up 0.9%, reaching its 52-week high.

The Relative Strength Line also hit a new high, as indicated by the blue dot on the chart.

Winners and losers

Lululemon Athletica (LULU) is up 6.8% after beating the highest and lowest estimates for the second quarter after Thursday’s close. Management also provided better-than-expected sales guidance for the third quarter and full year 2022.

broadcom (AVGO) is trading 1.8% higher on earnings per share and sales.

Offshore drilling company Valaris Limited (VAL) is up 7.1% as the energy sector strengthens on higher oil prices ahead of the upcoming OPEC+ meeting.

Stock Market Today: IBD 50 Stocks on the Move

The IBD 50 ETF (FFTY), a measure of growth stocks, is up 0.8% and is holding up better than the major indices.

Talos Energy (TALO), an oil and gas company, is up 5.9% as the energy sector leads the way. The company reported impressive quarterly growth on August 4, with earnings accelerating. Earnings per share rose from $0.45 per share in the December quarter to $0.77 in March and $1.20 in June.

Talos has a 98 Composite Rating and a 96 Relative Strength Rating.

CVR Energy (CVI) gained 5.6% on light volume. The flask comes in a cup with handle with a 37.73 buy point. It has a perfect relative strength of 99 and a composite score of 94.

Daqo New Energy (DQ) pulled out 4.1% on the light volume, testing the 50-day moving average. Daqo is an industry leader with a Composite Rating of 99 and an EPS rating.

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