Stocks were lower on Monday afternoon as eyes turned to this week’s Fed meeting. Chip companies Advanced micro devices (AMD), Intel (INTC) and ON Semiconductor (ON) fell, as did the Brazilian oil company Petrobras (PBR).
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The Nasdaq was down 0.7% and the S&P 500 was down 0.5%. The Dow Jones Industrial Average fell 0.2 percent. The small-cap Russell 2000 lost 0.1%.
Volume on the Nasdaq and NYSE fell at the same time on Friday.
Meanwhile, the yield on the benchmark 10-year Treasury rose 9 basis points to 4.04%.
The barrel of American crude oil decreased by 2.7 percent and reached 85.50 dollars.
All Eyes on the Fed’s Rate-Increase Meeting This Week
The Fed’s announcement is due at 2 pm ET on Wednesday, with Chairman Jerome Powell following a press conference at 2:30 pm ET. As of Monday afternoon, 86% of traders expected the Fed to raise rates by 75 basis points, while 14% were looking for a 50-basis point hike, according to the CME FedWatch Tool.
Investors will be looking to get an idea of how big future rate hikes could be in 2022 and 2023. The Fed aims to fight high inflation without risking the economy slipping into recession.
The stock market is also keeping an eye on inflation and employment numbers, with the ADP Employment report due out at 8:15 am ET on Wednesday.
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All 11 S&P sectors were either down or down, led by the Select Sector Composite SPDR ETF ( XLC ), down 1.6%, and the Technology Sector SPDR ETF ( XLK ), down 1.2%.
Chip Stocks Enter News, Earnings
Semiconductor fell 7.2% despite reporting a beat on Q3 EPS and sales. ON ranks #1 in the Electronics-Semiconductor Manufacturing industry group. The group ranks as low as 141 out of 197 IBD groups. Shares have dipped below their 50-day moving average but are still in a base and seeing support at their 200-day line.
Advanced Micro Devices fell 2.3% after Northland Capital Markets downgraded the stock to outperform, and cut its price target to 60. The chipmaker reports Q3 earnings after the closing bell on Tuesday, with analysts expecting a profit of 72 cents a share. looking for every share. on $5.69 billion in revenue.
Intel also fell 2.1% in the chip group. Intel lowered expectations for the third quarter late Thursday but lowered its outlook for the fourth quarter.
Brazil’s stock markets fell broadly early Monday but later recovered after the country’s former leftist president, Luiz Inácio Lula da Silva, won Sunday’s presidential election, narrowly defeating right-wing Prime Minister Jair Bolsonaro. The iShares MSCI Brazil ETF (EWZ) gained more than 2% in early afternoon trading.
State oil refinery Petrobras (PBR) fell more than 5% amid concerns. Bolsonaro had threatened to privatize the company.
On Friday, PBR shares closed at 13.45. Petrobras stock is up more than 75% since the start of the year, and has just emerged from a late-stage fund base. PBR shares reversed last week, lowering the fundamental’s 14.85 buy point by more than 8% and setting off an automatic sell order.
Stock Market Today: Howmet Tumbles, But UNH, PSTG Rise
Howmet Aerospace ( HWM ) fell 2.6% after reporting a small deficit on Q3 sales. It also lowered Q4 sales guidance and full-year 2022 EPS guidance.
United Health Group ( UNH ) rose 0.8% on light volume, leaving a cup-to-hand basis with a buy point of 553.23.
Storage Pure (PSTG) rose 2.6% after Morgan Stanley boosted the stock to 37. Shares with a buy point of 31.62 are in a cut base. The line of relative strength fell to a new level. A company has the highest possible EPS ratio of 99.
Mashot ( CAT ) fell 1% after UBS downgraded the equipment giant to neutral and cut the price target to $230. CAT stock rose 7.7% on Thursday after beating Q3 EPS and sales. The shares form the right side of the foundation. The relative strength line hit a new high, as indicated by the blue dot on the MarketSmith chart.
Innovator IBD 50 ETF (FFTY) fell 0.2%.Earthstone Energy (ESTE) and medical technology company Axonics ( AXNX ) climbed 5% and 2%, respectively. On the bottom, ON Semiconductor and PBF Energy (PBF) dragged the index.
Devon Energy (DVN), which has delivered triple-digit revenue growth in four of the past five quarters, reports Tuesday after the close. The stock is experiencing a new high in light volume, a weakness.
Chesapeake Energy (CHK), Comstock sources (CRK) and Magnolia Oil & Gas (MGY) also reports on Tuesday.
Growth investors are also awaiting results this week Arista Networks (ANET) (after closing today), Lantheus (LNTH) and Paylocity (PCTY).
Follow Michael Molinski on Twitter @IMmolinski
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