Day Traders Diary

8/11/22

The major averages struggled for direction on Thursday as investors mulled another better-than-expected inflation report. The Dow Jones Industrial Average rose just modestly, less than 0.1%. The S&P 500 was little changed, while the Nasdaq Composite slumped 0.5%. The three major averages opened the session higher but lost steam as the day progressed.

Investors received more good economic news when the July producer price index showed a surprise decline from June. PPI dropped 0.5%, compared with an estimate of a 0.2% gain, according to a Dow Jones survey. The PPI reading excluding food and energy rose less than expected.

That reading follows an encouraging consumer price index for July on Wednesday. CPI came in at 8.5%, slightly cooler than the 8.7% expected by analysts surveyed by Dow Jones and a slowing pace from the prior month.

Stocks rallied after Wednesday's report and again Thursday morning, but the uptrend waned later in the day.

One bright spot for markets was Disney. The stock jumped more than 4% after the media giant posted stronger-than-anticipated subscriber numbers for the last quarter, along with earnings and revenue that topped expectations. Disney also said it would raise prices for Disney+.

That "peak inflation" belief has been fueled in part by what had been, until now, weaker energy prices throughout the summer, plus the latest headlines that gasoline prices had fallen to the lowest since March.

As a result, the energy complex is sharply higher Wednesday. Devon Energy (7.2%), Marathon Oil (6.2%) Schlumberger (5.8%) and Diamondback Energy (5%) are four of the S&P 500′s five leading gainers.

Also higher: Marathon Oil, ahead 6.6%; Occidental Petroleum up 5.1%; Pioneer Natural adding 4.9%; and Conoco Philips higher by 4.5%.