The Dow Jones Industrial Average closed lower as House Speaker Kevin McCarthy made the debt ceiling pledge. Palantir (PLTR) soared after CEO Alex Karp boasted about its AI offering paypal (PYPL) declined after its quarterly report.
Things were relatively quiet on the breakout front. But MongoDB (MDB) managed to move above a buy point.
Stocks were lower after New York Federal Reserve President John Williams said interest rates could rise if inflation doesn’t come down. He also said that “the actions of the FOMC to restore balance to the economy” would take time to take full effect.
The 10-year Treasury yield rose one basis point to 3.53%, while the two-year yield rose three basis points to 4.04%, making the yield curve more inverted.
Speaker McCarthy pledges debt ceiling
The current battle over raising the federal debt limit is an ongoing concern for investors.
McCarthy rejected the idea of a short-term deal ahead of meeting with President Joe Biden and congressional leaders today to discuss the issue.
“No, no, no. We shouldn’t drag out (negotiations) (for the future). Let’s get this done now,” McCarthy, R-Calif., told NBC News on Tuesday.
This means that any White House effort to secure a three-month debt ceiling extension seems dead on arrival. Republicans are keen to secure spending cuts as part of any deal to raise the federal debt limit.
But President Biden is adamant on demanding an increase in the debt ceiling without spending cuts. However, he has said he is ready to speak about the cuts as a separate issue.
If politicians cannot resolve this issue, the US is in danger of defaulting on the bonds.
Nasdaq lags as small caps hit lower levels
The Nasdaq lagged other major indices as it ended the session down 0.6%. EV stock lucid (LCID) dipped 5.6%.
The benchmark S&P 500 fell 0.5%. dish network (DISH) struggled here as it fell 11.1%, an extension of a long slump. On Monday it emerged that Dish is losing pay-TV customers faster than expected.
S&P 500 sectors closed mainly negative. Only Energy, Industrial and Consumer Discretionary ended in the green. Technology and materials were the worst performers.
Small caps trimmed losses of late, with the Russell 2000 closing down 0.2%. Growth stocks took a hit, however, as the Innovator IBD 50 ETF (FFTY) closed nominally positive.
Dow Jones Today: Goldman settles discrimination lawsuit
The Dow Jones Index was outperforming other major indices but still closed down. It dropped 57 points, or 0.2%.
boeing (BA) was the best performer as it climbed 2.3%. intel (INTC) lagged most of its peers on the Dow Jones today as it fell 2.2%.
Goldman Sachs (GS) ended the session down 0.5%. GS stock declined to its 50-day moving average. The firm agreed to pay $215 million to settle the gender discrimination lawsuit. As part of the settlement, the bank will appoint an independent expert to “conduct an additional pay equity study”.
Palantir stock soars amid AI claims
Palantir stock was one of the best performers on the stock market today following its earnings report.
Shares of PLTR soared after the firm’s CEO Alex Karp boasted about the firm’s ability to take advantage of the current artificial-intelligence craze.
“The depth of engagement and demand for our new Artificial Intelligence Platform (AIP) is unprecedented,” he added. “We are currently mobilizing our company and sales teams to convert this organic and inbound interest into an expansion of our reach within the market.”
Karp said the firm’s AI platform will be made available to “select customers” this month.
The firm also posted Q1 EPS of 5 cents while revenue grew 18% to $525 million. This was better than analysts’ forecasts.
PLTR stock gapped through its moving averages as it soared 23.3%. MarketSmith analysis suggests it is off to an entry of 10.41.
PayPal stock plunged after report
PayPal stock fell after the firm’s earnings call late Monday.
EPS rose 33% to $1.17 and revenue climbed 9% to $7.04 billion, beating analysts’ expectations for earnings per share of $1.10 on revenue of $6.98 billion.
Total payment volume processed from merchant customers grew 10% to $354.5 billion, beating Wall Street estimates. But while the firm raised its projected adjusted earnings growth by nearly 20% to $4.95 per share, it slashed its margin outlook.
PayPal stock turned down and lost ground on its major moving averages. It ended the session down 12.7%. PYPL is now down about 12% so far in 2023.
Airbnb, Celsius among big earners of late
Outside the Dow Jones: MongoDB Stock Tests Entry
In a difficult day of breakouts, MongoDB stock climbed to the top of an entry and stood out.
Database Software Play is trading in buy zone after clearing buy point of 248.25.
This is the first phase pattern, which is positive. IBD research has found that such early-stage patterns are more likely to make large gains.
On the other hand, volume was flat, which is a bad sign on a breakout.
Overall performance is excellent, with the stock boasting an IBD overall rating of 95 out of 99.
Please follow Michael Larkin on Twitter @IBD_MLarkin For more analysis of growth stocks.
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