Stock market rally on avoidance of railroad strike; adobe plunges

After falling in the open, the stock market reversed with a slight increase in the early hours of Thursday. A nationwide rail strike was averted, providing some relief to investors.


The Nasdaq Composite and S&P 500 were up 0.3% at 10 a.m. ET. The Dow Jones Industrial Average was up 0.4%.

Microsoft ,msft), a key component of the three indices, fell nearly 1% to a two-month low. Company plans to acquire video game publisher Activision BlizzardD (atvActivision shares rose 0.3% as it faced more regulatory scrutiny in the UK.

Compared to the same time on Wednesday, volume fell on the Nasdaq and rose on the NYSE.

index on Wednesday medium bounce from day one. The S&P 500, Nasdaq and Dow are trading below their 50-day lines.

The stock market got relief after the railroad strike was postponed

The White House announced early today that railroad officials and unions a labor agreement reached a tentative agreement, The deal prevents strikes by freight train workers that would have crippled vital transportation lines and caused new supply chain headaches.

union pacific ,UNP) climbed about 2%, and Norfolk Southern ,NSC) rose 2.2%. csx ,csx) fell 1%. All three stocks are trading below their 50-day line.

Retail sales increased surprisingly in August. The Census Bureau reported that overall sales rose 0.3% since July, no change to Economist estimates. Excluding auto, sales fell 0.3%. Pre-auto sales estimates were unchanged, According to Econoday,

“Despite the help from cheap gasoline, there is no doubt that the rising cost of almost everything is eroding the spending power of the American consumer,” said Sal Guattieri, economist at BMO Capital Markets.

He added that sales still rose 9.1% over the past year, but most of it reflects higher prices. “Most importantly, the control measure of sales used to calculate personal consumption expenditures was unchanged in the month after July profit was cut in half by 0.4%.”

Climbing Yields, Adobe Plummets

The yield on the 10-year Treasury note rose 3 basis points to 3.45%.

adobe ,adbe) fell 14% after the company’s heavy trading Mixed August-quarter results And news of a $20 billion acquisition. The digital media company beat earnings estimates, but missed sales slightly. Adobe also said it is acquiring Figma, which creates a design platform for team collaboration.

Adobe stock hit its June low and slipped to its lowest point since April 2020. According to Dow Jones market data, today’s drop is on track to be its worst since March 16, 2020, when it fell nearly 15%.

The price of US crude fell nearly 2% to $86.84 a barrel. The Energy Select Sector SPDR (XLE) slipped 2.6% and was the worst-performing S&P sector ETF. However, it is still making a cup with a handle.

IBD 50 Index Lags Stock Market

The Innovator IBD 50 ETF (ffty) performed poorly with a drop of 1%. Energy stocks hurt the index.

CVR Energy ,image) is falling to its 50-day moving average, but is still forming a cup-with-handles base. ConocoPhillips ,COP) is back at the 115.57 buy point of yesterday’s breakout.

Florida based utility NextEra Energy ,Ni) fell down more than 3% in huge amounts. The shares are trading below the double-bottom base’s 87.62 buy point and testing the 50-day line. The clean energy provider said late Wednesday it intends to sell $2 billion worth of equity units.

Each equity unit will be issued in the amount of $50 and will consist of a contract to purchase NextEra Energy common stock and a 5% undivided beneficial ownership interest in NextEra Energy Capital Holdings debentures.

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