Stocks were mixed in early afternoon trading Tuesday as investors weighed generally positive economic data against some high-profile earnings misses.
McDonald's (MCD) led restaurant stocks lower, while gunmaker Smith & Wesson (SWHC) broke out past a buy point.
The Dow Jones industrial average slipped 0.2%, the S&P 500 was flat and the Nasdaq was up 0.2%. Volume in the stock market today was tracking higher on both the NYSE and Nasdaq compared to Monday.
Smith & Wesson was a bright spot, however, rising 2% and clearing a 29.85 buy point of a cup-with-handle base in heavy volume. The stock's Accumulation/Distribution Rating of A- indicates strong demand for the shares.
The move up came after Smith & Wesson announced plans to buy Crimson Trace, a maker of laser sighting systems, for $95 million.
IBD'S TAKE: To find out how Smith & Wesson stacks up against rivals in the safety & security industry, see IBD's Stock Checkup feature.
Restaurant stocks were among the worst performers. McDonald's led the Dow lower, sinking more than 4% in heavy turnover and slicing through its 50-day moving average.
McDonald's said Tuesday that Q2 profit rose 12% to $1.45 a share, beating Wall Street forecasts. Sales dipped 4% to $6.3 billion, slightly below views. But the burger chain's same-store sales trailed analyst estimates.
Meanwhile, Stifel Nicolaus downgraded several restaurant stocks to hold from buy on fears of a looming recession.
Texas Roadhouse (TXRH) plunged 6%, pulling back into buying range from a 45.01 flat-base entry.
Dave & Buster's (PLAY) lost 5% and Chipotle Mexican Grill (CMG) lost 2%.
Meanwhile, managed care stock Centene (CNC) led the IBD 50 lower, diving 10% despite a better-than-expected quarterly earnings report.
The company said it won't bid for businesses that larger insurers plan to auction off as the industry consolidates.
Economic data were generally positive as the Federal Reserve kicked off a two-day meeting Tuesday. The central bank is expected to hold interest rates steady amid concerns about the global economic outlook.
Sales of new homes rose 3.5% in June to a seasonally adjusted annual rate of 592,000, the highest level since February 2008.
Meanwhile, the Conference Board's index of consumer confidence dipped 0.1 point to 97.3, still better than expected.
