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Indexes Bleed More Red As YY, Target Go In Opposite Directions

Weakness in Asia and Europe overnight spilled into the U.S. stock market Wednesday.

The session was shaping up to be a carbon copy of Tuesday's, which saw indexes recover well off lows. But sellers today came in late, resulting in a weak close. Some attributed the late selling to news that Sen. Ron Johnson, R-Wis., will oppose the current GOP tax bill.

X The Nasdaq composite, S&P 500 and Dow Jones industrial average ended with losses of around 0.5% to 0.6%. Chipmakers were a drag on the Nasdaq, while Caterpillar (CAT) lagged in the Dow, falling 2.5%. Preliminary data showed volume on the NYSE and Nasdaq coming in just below Tuesday's levels.

Airline stocks and department stores outperformed, along with several retail-related groups.

In economic news, October retail sales were a mixed a bag, but there was arguably more good news than bad. Overall, sales rose 0.2%, just above the consensus estimate for a 0.1% gain. Excluding autos, sales rose 0.1%, just below the consensus estimate of 0.2%. An additional bright spot was that September sales were revised higher to a gain of 1.9% vs. an initially reported rise of 1.6%.

In the stock market today, apparel retailer Children's Place (PLCE) shot up 6% to 120.65, helped by a solid earnings report and news that same-store sales rose 5.1%. Children's Place is near the top of a consolidation that shows a conventional entry at 125.40, but an earlier entry of 119.55 also looks valid.

On the downside, Target (TGT) crashed 10% despite reporting better-than-expected earnings, sales and same-store sales. The outlook was the problem as Target cited a "highly competitive holiday quarter."

Target is often mentioned as a retail bellwether alongside Wal-Mart (WMT), but it's Wal-Mart that seems to be executing better at this point. After a recent breakout over an 82.09 buy point, Wal-Mart is holding near highs ahead of its earnings report Thursday before the open.

Inside the IBD 50, YY Inc. (YY) was a huge gainer, up 25%, on strong earnings. Early Wednesday, the China internet name reported a 42% rise in quarterly profit and 49% jump in sales.

Also in the IBD 50, Essent Group (ESNT) continued to show good action after a recent trip to the 50-day moving average. Shares rose nearly 4% to 43.92. It's slightly extended after reclaiming a 41.54 buy point.

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