The Dow Jones Industrial Average inched higher despite a senior Fed official saying the Ukraine war has increased the need for rate hikes. Meanwhile, Russian President Vladimir Putin said the invasion is going to plan. Kroger (KR) and rail stock Union Pacific (UNP) have both passed buy points.
Volatility was lower, with the Cboe Volatility Index, or VIX, down nearly 2%. Volume was down on both the New York Stock Exchange and the Nasdaq, a crumb of comfort when stocks struggle.
Meanwhile, the yield on the benchmark 10-year Treasury note slipped 1 basis point to 1.85%. Oil was also slightly lower, with West Texas Intermediate crude down 0.9%.
Fed Official Says Ukraine War Means This; Putin Speaks Out
Cleveland Fed President Loretta Mester said the Ukraine war is pushing inflation even higher and has intensified the need for interest-rate hikes.
Her comments come after Federal Reserve Chairman Jerome Powell soothed markets Wednesday by telling Congress he supported making a gentle 25-basis-point hike at the next Fed meeting.
“The situation in Ukraine adds uncertainty to the economic outlook. The uncertainty about the outlook doesn’t change the need to get inflation under control in the U.S.,” Mester told CNBC. “In fact, it actually adds upside risk that high inflation might continue, and that makes it more important to take action.”
Meanwhile, Russian President Vladimir Putin has insisted that the invasion of Ukraine is “going according to plan,” despite many military analysts saying this was anything but the case.
Putin said in a speech that the Ukrainian military has taken “thousands of foreign citizens hostage.” He also claimed civilians were being used as human shields.
Russia is currently trying to tighten its grip on the coast of Ukraine, with the port of Mariupol being subjected to heavy bombardment.
Nasdaq Falls As Small Caps Get Slapped
The tech-heavy Nasdaq was lagging, dropping about 0.6%. Dollar Tree (DLTR) fared best with a gain of more than 6% after its earnings report, while Datadog (DDOG) was a notable laggard as it slid over 8%.
The S&P 500 was barely positive, gaining 0.2%. Outside of Kroger, Best Buy (BBY) was faring best with a gain of 10% following quarterly results.
U.S. Stock Market Today Overview
Last Update: 1:32 PM ET 3/3/2022
Interestingly, the S&P sectors were mostly positive. Defensive areas such as utilities and real estate were faring best. Technology and consumer discretionary were the worst performers.
Small caps were being given the worst beating by the bears, with the Russell 2000 falling nearly 1%.
Growth stocks were having better luck. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, was pretty much flat.
Dow Jones Steady As Walmart Leads
The Dow Jones Industrial Average was managing to hold onto a slender gain of about 0.3%. Walmart (WMT) led the blue chips. It benefited from Kroger earnings. Walmart was up nearly 3%.
It was followed by Amgen (AMGN) and IBMticker symb=IBM], with both rising around 2%.
Aerospace giant Boeing (BA) was the worst laggard, giving up nearly 4%.
Kroger Stock Blasts Out Of Buy Zone
Kroger stock was one of the top market performers today as it exploded more than 11% on earnings.
The stock is now extended past its buy zone from a cup-base entry of 50.25, according to MarketSmith chart analysis.
Kroger earnings per share rose 12% to 91 cents in Q4. Revenue came in at just over $33 billion. The grocery chain bested Wall Street views on both the top and bottom lines.
The effects of inflation were clear, with management saying consumers are cooking more meals at home to save money. Prices have jumped the most for meat and grocery products, though the company sees inflation moderating in the second half of 2022.
Consumer-staples stocks such as Kroger tend to fare better in an environment of rising interest rates.
Union Pacific Stock Chugs Past Entry
Union Pacific made a bullish move by sprinting past a flat-base entry of 256.21 in strong volume.
The relative strength line has just hit a new high, while institutions have been holding steady on the stock of late.
Union Pacific could benefit from an increased need to transport crude oil produced across the U.S. due to supply issues exacerbated by the Russia-Ukraine war.
The move saw UNP added to the IBD Leaderboard list of leading growth stocks.
Fellow rail stock CSX (CSX) also made a bullish move as it punched above its 50-day moving average. CSX stock is crafting its own flat base. The ideal entry here is 38.11.
With the stock market currently in a correction, investors should remember that any buys carry extra risk.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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