The Dow Jones Industrial Average plunged as recession fears grew on new data. You’re here (TSLA) is at a multi-year low after a shocking plunge. A number of Cathie Wood’s new purchases were being thwarted. Microsoft (MSFT) and Apple (AAPL) got beaten up.
A trio of stocks near buy points showed strength amid the carnage. Cardinal Health (HAC), Jazz Pharmaceutical (JAZZ) and AbbVie (ABBVwere all hung hard. Given the current action, now is the time to bolster its watch list.
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Meanwhile, the yield on the benchmark 10-year Treasury note ended the day at 3.69%. West Texas Intermediate crude rose 0.2% to $78.20 a barrel.
The stock market hit by the double blow of the data
Stocks took a double whammy after initial jobless claims hit 216,000, below estimates for a rise to 225,000. The Federal Reserve is looking to cool the labor market as it tries to fight inflation.
Gross domestic product was also stronger than expected in the third quarter, according to the Commerce Department. Its third estimate showed growth of 3.2% vs. the second estimate is 2.9%. It also suggests that the Fed’s attempts to slow the economy have yet to bear fruit.
Oanda’s senior market analyst Edward Moya said in a note to clients that there was a strong seasonal impact on employment data and jobless claims were expected to rise after the holidays. But if jobs remain steady, there could be more pain to come from Federal Reserve action.
“Wall Street is still pricing in another rate hike at the February FOMC meeting, but if the data doesn’t break, a March hike should start to factor in,” he said.
Bears Maul Nasdaq, IBD 50
The Nasdaq closed lows but still fell 2.2%. Nvidia (NVDA) was among the worst performers, at 7%.
The S&P 500 suffered despite a late rally, dropping 1.5%. Carnival (CCAfell behind here as it slipped 7.1%.
The S&P 500 sectors were all negative. Consumer discretionary and technology suffered the worst losses. Health was the strongest group, but still gave up some ground.
Small caps were a tough session, with the Russell 2000 losing 1.4%.
Growth stocks have not escaped the wrath of raging bears, with the Innovator IBD 50 ETF (FFTY) closing the day down 1.6%.
Dow Jones Today: Microsoft, Apple Stock Dive
The Dow Jones Industrial Average fared better than other major indices. Nevertheless, it still fell, yielding 349 points, or 1.1%.
Microsoft stock was one of the worst performers in the blue chip index, down 2.6%. It sent a sell signal by undercutting the 50-day moving average.
Apple stock also suffered, with its 2.4% decline only marginally better than MSFT’s. He lost ground on his own 50-day streak, MarketSmith analysis shows.
Aerospace giant Boeing was the worst performer in the Dow Jones today with a 4% drop.
Verizon (VZ) fared best with a 1.4% gain. Nike (NKE) also impressed with a gain of 0.8%.
Futures: Inflation data expected after Tesla, chips lead sell
Tesla shares shock lower
TSLA had a truly shocking day, down 8.9%. The stock has lost nearly 69% of its value so far this year.
The latest painful drop came after the company offered $7,500 off Model 3 and Model Y vehicles delivered in the United States this month.
The EV automaker is also offering 10,000 free boost miles as part of the deal. It comes amid growing fears that Tesla is facing weakening demand.
As if that weren’t enough, Wall Street is worried about CEO Elon Musk and his continued distractions with Twitter could hurt both the electric vehicle giant’s sales and its brand.
Tesla has now erased years of gains, sitting at a level last seen in September 2020. Those who entered when the stock hit its all-time allocation-adjusted high of 407.36 in November 2021 are extremely sick and painful losses.
New Cathie Wood buys Plummet
Renowned stock picker Cathie Wood made four stock purchases for her ARK Innovation ETF (ARKK) yesterday, including TSLA. Everything fell apart badly.
Pandemic darling Focus on video communications (ZM) finished session lows but still gave up 5.7%. It is trading below all of its moving averages.
Outstanding payments To block (SQ) made a strong late rally but still fell 3.2%. It is among the worst 23% of stocks over the past 12 months.
Video streaming playback Roku (ROKU) fared best by fighting back to close down 1.4%.
The ARK Innovation ETF fell 3.4% and is now down more than 67% since the start of 2022. It is also trading 12.1% below its 50-day moving average.
Outside the Dow Jones: 3 Stocks Close to Flex Muscles Entries
With the stock market hammered amid ongoing bearish action, investors should look for stocks showing relative strength.
Cardinal Health saw its relative strength line reach new highs as it eyes a flat base entry of 81.67.
It is in the top 3% of stocks by price performance over the past 12 months, although the EPS rating of 68 out of 99 isn’t ideal.
Jazz Pharmaceuticals also saw its RS line surge as it approaches a double bottom base entry of 163.41. This is a first stage model.
The company, which makes treatments for narcolepsy and other sleep disorders, has strong overall performance. This is reflected in an IBD composite rating of 90.
AbbVie outperformed with a small gain, taking its RS range to new heights. He is aiming for a cup entry with handle of 167.85.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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