Major Indexes Take Separate Paths; Bank Stocks, Retailers Rise – Investor’s Business Daily

U.S. stock indexes rushed in opposite directions midday Wednesday, as blue chips and banks showed strength while the Nasdaq staggered lower.

XAutoplay: On | OffAt 12 p.m. ET, the Dow Jones industrial average pegged a 0.2% gain, while the S&P 500 inched down 0.2%. The Nasdaq fell 1.3%, pulled down by the Philadelphia semiconductor index’s more than 4% loss.

Small caps surged with the Russell 2000 adding 0.5%.

Volume in the stock market today was running sharply higher on both major exchanges.

Blue chips were mostly up. In the 30-component Dow Jones industrial average, financials led. JPMorgan Chase (JPM) popped 2.5%. Goldman Sachs (GS) rose 1.9%. Ameircan Express (AXP) grabbed a 1.5% gain, but Visa (V) dived 3.5%.

American Express is bouncing off its 10-week moving average line, while Visa is testing its 50-day line.

Banks Swirl Higher

Bank stocks were up midday Wednesday after rising Tuesday on the testimony of Jerome Powell, the Federal Reserve nominee for chief. Powell told the Senate Banking Committee that  he favors easing bank regulations. Powell’s confirmation hearing was smooth, disturbing neither senators nor Wall Street.

Among the bank sector, stocks notching 52-week highs included JPMorgan; Morgan Stanley (MS), up 2.5%; Bank of America (BAC), up 3%; SVB Financial (SIVB), up 2.5%; Comerica (CMA), up 4%; and Fifth Third Bancorp (FITB), up 4%. Meanwhile, Citigroup (C) is closing in on a 76.24 buy point but cleared an alternative entry at 74.95 in strong volume this morning.

Two additional bank-stock breakouts included Northern Trust (NTRS), up 2.5%; and SunTrust Banks (STI), up 4%.

A convergence of factors appear to be favoring some sectors at the expense of others. Tech is suffering but other areas are rising. In Tuesday’s new highs list, the building sector delivered 29 new highs; banks, 27; and finance, 22. Chips only accounted for two new highs.

Items Favoring The Bulls

Factors influencing the strong side of the stock market include: Trump’s choice to head the Fed, who is finding favor; the Republican tax-cut package which won tentative but positive remarks from maverick Sen. Susan Collins, R-Maine; and recent economic data, including a 17-year high for consumer confidence.

Before the open Wednesday, the bulls received additional good news. The second reading on Q3 GDP rolled in at 3.3%, up from the initial reading of 3%. While this only matched the consensus estimate, the growth was encouraging and signaled no trouble in the economy.

Retail Perks Up

Besides the gains in bank stocks, the retail sector also surged in midday action. Retail industry groups accounted for a slew of the day’s top performers. Some of the retail stocks are comeback stories. Urban Outfitters (URBN), a former leading stock that has been struggling for more than two years, is on track for its 11th daily gain in a row. Urban is climbing the right side of a deep cup base.

On the loss side, the three chip groups were among the worst performers for the day.

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