The stock market traded mixed Tuesday morning as home prices fell and gave no signs that a Santa Claus rally is coming. China retail stocks surged after the Asian nation said it would reopen its borders next month after long Covid shutdowns. Tesla (TSLA) stock plunged on China vehicle registration data.
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The Nasdaq composite fell 0.9% while the S&P 500 dropped 0.1%. The Dow Jones Industrial Average climbed 0.5%. The small-cap Russell 2000 index fell 0.1%.
The Nasdaq composite and S&P 500 are trading at their lowest levels since early November. Last week marked the third-straight week of declines for the Nasdaq and the S&P but the Dow surprised with a 0.9% gain.
Volume fell on the Nasdaq and the NYSE vs. the same time on Friday, before the holiday weekend. Volume this week is expected to be light as many investors take the week off between Christmas and New Year’s.
The yield on the benchmark 10-year Treasury note rose six basis points to 3.81%. Crude oil prices rose 0.4% to $79.90 per barrel.
The Innovator IBD 50 ETF (FFTY) gained 0.1%, led higher by footwear retail stocks Crocs (CROX) and Deckers Outdoor (DECK). Crocs shares are extended past the profit-taking zone, while Deckers is forming a cup-like base with a buy point of 402.42.
Santa Rally Didn’t Come But Retail Sales Rose
The S&P CoreLogic Case-Shiller national home price index, which measures average home prices in major cities, fell 0.5% in October compared with September. This marked the fourth straight month-over-month decline. But the index fell less than the Econoday consensus estimate for a 1.2% drop.
On a year-over-year basis, the index rose 9.2% in October, down from the 10.7% annual rate in September. The rise in mortgage rates was seen as dampening homebuyers’ appetite.
“Housing prices continue to go lower as mortgage rates continue to climb. The Federal Reserve is singularly focused on inflation and is going to keep raising interest rates until they feel that inflation is dropping back to their 2% target,” said Chris Zaccarelli, chief investment officer for Independent Advisor…
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