The stock market faded from early gains Tuesday, but indexes overall made small price moves and remained in their current price trends.
The Nasdaq composite lost a 0.8% early gain and closed a smidgen lower. The S&P 500 rose 0.4% early but ended 0.2% lower. But both indexes Tuesday held above significant levels, namely the 50-day moving average, and the 21-day exponential moving average.
The Dow Jones Industrial Average also fell 0.2%, as indexes closed near session lows. Small caps lagged, with the Russell 2000 down 0.8%. The index is meeting resistance at its 50-day moving average, just like it did last week.
Volume rose from Monday’s levels, based on unconfirmed figures. Declining stocks outnumbered advancers by nearly 2-1 on the NYSE and by 12-7 on the Nasdaq.
U.S. Stock Market Today Overview
Last Update: 4:06 PM ET 5/25/2021
Semiconductor stocks gave the Nasdaq a bit of flotation. The VanEck Vectors Semiconductor ETF (SMH) added 0.6%, even after trimming its gains. The ETF is back above the 50-day line this week, according to MarketSmith pattern recognition.
Transportation Sector Hurts Stock Market
Transportation was a weak spot; the Dow transports fell 1%, despite relative strength in IBD’s airline industry group. Airlines faded from a morning jump, as did other travel-related stocks. Shipping, trucking, logistics, airfreight and transportation equipment groups fell 1% to 3.5%, and did the most damage to the transportation sector.
Homebuilders were one of the top-performing industry groups Tuesday, despite a surprising drop in April new home sales. Those fell 5.9% to a two-month low of 863,000 units annualized.
But the median sales price jumped 20.1% from April 2020, when the housing market was weaker. Home prices in the biggest 20 metro areas in the U.S. rose 1.6% in March, according to S&P CoreLogic Case-Shiller. That’s the largest month-to-month increase since 2013, and up 13.3% on a year-ago basis, says Jennifer Lee, Senior Economist at BMO Capital Markets.
LGI Homes (LGIH), Pulte Group (PHM), Toll Bros. (TOL) and Beazer Homes (BZH) are some of the homebuilders rising from support at the 10-week moving average. The group is ranked No. 31 out of 197 industries.
In another important economic report, the Conference Board’s Consumer Confidence Index dipped from last month. The report found Americans are more optimistic about the labor market in May. But respondents also expect interest rates will be higher a year from now, and 12-month inflation expectations rose, Lee noted.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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