The stock market erased most losses Wednesday and closed near the best levels of the day as Wall Street spent a second straight day in recovery mode.
XThe Nasdaq composite wiped away a loss of 1.7% to close 0.4% higher. The S&P 500 climbed 0.1% after paring losses. Both indexes held above Monday's lows, an indication that selling is moderating after an intense sell-off last week and Monday.
The Dow Jones Industrial Average fell 0.1%. It pared losses sharply after bouncing off its 200-day moving average. Walt Disney (DIS) hampered the Dow all day. Disney closed 5% lower after the entertainment company's quarterly earnings missed expectations.
Small caps also lagged, with the Russell 2000 down nearly 0.1% at the closing bell. Utility and consumer discretionary small caps were the weakest.
Volume rose from Tuesday's totals, according to unconfirmed data.
While the stock market kept its cool, there was a sense of dread in the bond market amid spreading trade and currency tensions.
The 10-year Treasury yield extended its plunge and sank to the lowest level since October 2016. The 10-year note was quoted at 1.68% late Wednesday, down 6 basis points, but it had been as low as 1.59%. Investors now expect rate cuts at the next three Fed meetings.
Financials Lag Stock Market
Financials — a rate-sensitive asset class — were the weakest sector. The Financial Select Sector SPDR Fund (XLF) fell 1.2%, but shares found some support at the 200-day average. JPMorgan (JPM), the second-largest holding in the fund, slid to a two-month low before paring losses.
Among winning stocks, SolarEdge (SEDG) soared to a record high in huge volume, gapping up from support at the 10-week moving average. The maker of solar components reported better-than-expected earnings and gave a strong outlook.
Match Group (MTCH) catapulted to its own record high as it too soared from a pullback to the 10-week line. The owner of Tinder and other dating apps beat profit expectations.
Leading stocks in general outperformed. The Innovator IBD 50 ETF (FFTY) rose 0.5% as software and other technology stocks spearheaded gains.
The IBD 50 would have performed even better had it not been for Planet Fitness (PLNT). The chain of fitness centers tumbled even though it beat profit estimates and raised its guidance. Planet Fitness was forming a flat base, but Wednesday's sell-off ruined the pattern.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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