The major stock indexes closed mixed Wednesday, with the Nasdaq dropping while the Dow Jones industrial average led the market. Tilray (TLRY), meanwhile, had one of the wildest days in recent memory.
The Dow added 0.6%, thanks largely to JPMorgan Chase (JPM) and Goldman Sachs (GS), which took part in a financial sector rally. Dow component Boeing (BA) rose 0.5% but closed barely above the 364.64 entry in a base within a larger pattern.
The Nasdaq fell 0.1% as it pared losses, and the S&P 500 climbed 0.1%.
Financials outperformed. Treasury yields spiked 4 basis points to 3.08%, the second straight day the benchmark yield has topped 3%.
U.S. Bancorp (USB) broke out of a cup-with-handle base, topping a 54.82 buy point. But volume was tame and the relative strength line has not made a new high. The bank announced a 23% rise in its quarterly dividend.
With Treasury yields rising, bond-alternative assets did poorly. IBD’s four utility industry groups fell 1.4% to 2.5% and were in the lower part of the performance table. Real estate investment trusts and other real estate investments also tumbled. The iShares U.S. Real Estate ETF (IYR) closed below the 50-day moving average for the first time since May 17.
Homebuilders fell nearly 2% as a group. U.S. housing starts in August were 1.282 million. That was above forecasts. But IHS Markit noted that an unexpected decline in single family permits of 53,000 was a concern. “This was the largest one-month decline in over eight years,” IHS noted.
The tech sector was split, with software the main area of weakness while semiconductors held up.
Small caps also were down generally. The Russell 2000 lost 0.5% and made it back to the 50-day moving average. Watch for the index to bounce from the line, as the small-cap benchmark tries to snap out of a two-week slump.
IBD’s biotech industry group was in the top 25 of 197 groups tracked by IBD Wednesday, although its performance was inflated by soaring cannabis stocks, particularly Tilray. The Canadian company skyrocketed to exactly 300, up an astonishing 93.6%, before giving up the entire gain. After a late rebound, it closed at 214.06, up 59%. But it was lower in extended trading.
After reaching the peak, shares dropped about 75 points in just 10 minutes. Trading was halted several times as volatility in the stock intensified. Even with the trading halts, volume Wednesday totaled 30.7 million shares, or more than 40% of the stock’s floating supply of 75 million shares.
Tilray rallied after CEO Brendan Kennedy gave a bullish outlook on the company during a television interview late Tuesday.
Cronos Group (CRON) and GW Pharmaceuticals (GWPH) were other cannabis stocks that trimmed gains a great deal amid volatile trading.
Boeing broke out as defense stocks were broadly higher in morning trading. The iShares U.S. Aerospace ETF (ITA) hit a record high but reversed lower to end with a 0.8% loss.
