The Dow Jones Industrial Average was moved higher in a mixed stock market session following the release of the latest Federal Reserve minutes. Apple (AAPL) was a top blue chip performer once again, driving higher in a buy zone.
Meanwhile, Warren Buffett stock RH (RH) passed a buy point, with Chipotle Mexican Grill (CMG) also trying to stage a breakout. And AMC Entertainment (AMC) was diving again as meme stocks came under pressure.
X
Money flowed into bonds again, with the 10-year Treasury yield sitting at 1.325%. It fell to 1.30% Wednesday morning, the lowest level since mid-February.
Fed Minutes Reveal This
Federal Reserve officials discussed whether they will need to reel in their support for the economy earlier than anticipated amid rising growth in 2021, the much-awaited Fed minutes revealed.
However they decided at the June 15-16 FOMC meeting not to to pull back on their $120 billion in monthly purchases of Treasury and mortgage securities for the moment.
It was agreed that “as a matter of prudent planning” it is important to be “well positioned to reduce the pace of asset purchases, if appropriate.”
They stressed the need to be able to response to “unexpected economic developments,” which includes “faster-than-anticipated” progress toward the central banks inflation and employment goals. They also want to be able to react to prevent too much inflation, as well as asset bubbles.
Nasdaq, S&P 500 Gain
The Nasdaq was fighting to move into positive territory, but was basically flat. Biogen (BIIB) and Verisk Analytics (VRSK) were faring best, with both rising more than 2%. Covid vaccine play Moderna (MRNA) was the biggest laggard, dipping more than 4.5%.
The S&P 500 was faring slightly better, turning in a mild gain of 0.3%. Oracle (ORCL) was the strongest performer of the day so far, rising almost 4%. Clorox (CLX) also did well, rising more than 3%.
The S&P sectors were mostly positive, with materials, industrials and real estate faring best. Energy was the only laggard.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34649.58 | +72.21 | +0.21 |
| S&P 500 | (0S&P5) | 4357.96 | +14.42 | +0.33 |
| Nasdaq | (0NDQC ) | 14662.48 | -1.16 | -0.01 |
| Russell 2000 | (IWM) | 223.10 | -2.76 | -1.22 |
| IBD 50 | (FFTY) | 43.72 | -1.01 | -2.26 |
Last Update: 2:52 PM ET 7/7/2021 |
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Small caps were once again struggling, with the Russell 2000 giving up more than 1%. Growth stocks were given an even stiffer spanking by the bears, with the Innovator IBD 50 ETF (FFTY) dipping more than 2%.
Dow Jones Swells As Apple Stock Rises
The Dow Jones Industrial Average moved higher after the Fed minutes release, turning in a gain of 0.2%.
Apple stock was once again flexing its muscles, turning in a gain of around 1.7%. The relative strength line is continuing to rise.
AAPL stock is now running at the top of a buy zone from a from a 13.17 buy point. It broke out of a cup without handle last week.
The stock got a boost Tuesday after JPMorgan Chase raised its price target to 170 from 165 and maintained an overweight rating.
Apple stock drove higher in its buy range. Volume was running higher than average, which is a plus.
Home Depot (HD) was another Dow Jones winner for Wednesday, but lost some ground after earlier vying with Apple to be the day’s top component. It was up around 1%.
Warren Buffett Stock Passes Buy
Warren Buffett stock RH clawed its way past a cup with handle base buy point of 719.87, MarketSmith analysis shows. However it is currently sitting just below the entry.
Volume is above average, which is encouraging, but investors will want to see the relative strength line pick up.
Warren Buffett is a noted backer of RH stock, with his firm Berkshire Hathaway (BRKB) currently holding almost 2 million shares.
Institutional ownership is a key strength of the stock, with 89% of RH shares currently being held by funds. The T. Rowe Price New Horizons Fund (PRNHX) is another noteworthy supporter.
Chipotle Mexican Grill (CMG), meanwhile, rose just above a cup base entry point of 1,579.62. It remains in its buy zone. The RS line is spiking here, which is encouraging.
Volume was around 31% lower than usual, which is not ideal for a breakout. The strongest breakouts tend to occur in volume at least 40% higher than normal.
CMG stock is actionable up to 1,658.60, and it boasts a near perfect IBD Composite Rating of 97. Market performance is currently a weakness.
AMC Stock Dives
Meme stocks were struggling once again on Wednesday.
AMC stock, the most prominent of all meme stocks at the moment, was getting spanked. While it was off lows, it was still down almost 10%.
It is on track for a fourth down day in a row, though it remains up just over 2,000% so far this year.
The cinema stock currently has dreadful earnings performance, but massive price spikes have caused its Relative Strength Rating to reach a perfect 99.
GameStop (GME), the most noted name of the meme stock phenomenon, was also struggling. It gave up more than 5%, but remains up more than 900% for the year.
Last week Baird suspended coverage of the video game retail stock due to Reddit influence and a perceived lack of a company plan.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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