Dow Jones Dives 500 Points After Economic Data; Home Depot, Walmart Tumble On Earnings

   2023-02-21 14:02

The Dow Jones Industrial Average lost more than 500 points Tuesday morning amid the release of economic data in a holiday-shortened week. Meanwhile, retail giants Home Depot (HD) and Walmart (WMT) reported quarterly earnings. Home Depot shares dropped 5.2% and Walmart stock tumbled before reversing up 0.6%.


Among other companies reporting earnings, Fluor (FLR), Harmony Biosciences (HRMY) and Huntsman (HUN) were on the move.

Fluor shares rose 0.55% at the market open, while Harmony stock plunged 10%. Further, Huntsman shares fell 4.4%.

On the economic front, the preliminary February composite Purchasing Managers’ Index, or PMI, showed the services index moved back into expansion territory, while the manufacturing index remained in contraction. The services index had a reading of 50.5, better than the 47.2 estimate, while the manufacturing index came in at 47.8 vs. a 47.3 estimate.

Meanwhile, the National Association of Realtors’ existing home sales numbers fell to 4.0 million in January, below estimates and down from 4.02 million in December.

Stock Market Today

Electric-vehicle leader Tesla dropped nearly 2% Tuesday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were sharply lower after today’s stock market open.

IBD Leaderboard stock Airbnb (ABNB) Dexcom (DXCM), Inspire Medical Systems (INSP) and Wingstop (WING) — as well as Dow Jones stocks Caterpillar (CAT), JPMorgan Chase (JPM) and Salesforce (CRM) — are among the top stocks to buy and watch, amid the recent stock market rally.

Airbnb is an IBD Leaderboard stock. Inspire and Dexcom were recent IBD Stock Of The Day subjects. Salesforce was featured in last week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Prices, Treasury Yields

After Tuesday’s market open, the Dow Jones Industrial Average dropped 1.5%, with Home Depot and Walmart doing the bulk of the damage. The S&P 500 moved down 1.3%. And the tech-heavy Nasdaq composite fell 1.7% in morning action as (JD) and PDD Holdings (PDD) led a selloff among China e-commerce stocks.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) traded down 1.3% and the SPDR S&P 500 ETF (SPY) fell 1% early Tuesday.

The 10-year U.S. treasury yield dipped to 3.82% Friday, snapping a three-day win streak, but still closing with solid weekly gains. Then on Tuesday morning, the 10-year yield jumped to 3.9% as bonds fell, even as a safe-haven surge drove the U.S. dollar higher vs. key foreign currencies.

Oil prices fought to end a four-day losing streak, rising less than 1% Tuesday morning. West Texas Intermediate futures remained below $77 a barrel.

Stock Market Rally

On Friday, the Dow Jones Industrial Average rose 0.4%, but the S&P 500 lost 0.3%. The Nasdaq declined 0.6%.

Friday’s Big Picture column commented, “The overall picture remains bullish for now, which justifies building 60% to 80% exposure. But remember to stay on top of sell signals within your portfolio. Any stock that falls 7% to 8% from your purchase price should be axed. Also beware of sharp breaks below the 50-day or 10-week moving averages.”

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Buy And Watch: Caterpillar, JPMorgan, Salesforce

Top Dow Jones stock Caterpillar is still in buy range above a 239.85 flat-base entry, as it tries to find support around its 50-day moving average, according to IBD MarketSmith chart analysis. Shares climbed 0.5% Friday and continue to hold above the 50-day line. CAT stock dipped 0.8% Tuesday morning.

Banking giant JPMorgan remains in the 5% buy range above a 138.76 flat-base buy point after a 0.3% gain Friday. The 5% buy zone tops out at 145.70. JPM shares fell 0.8% early Tuesday. JPM stock shows a solid 95 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Featured in last week’s Stocks Near A Buy Zone column, Salesforce is building a cup with handle that has a 178.94 buy point. Shares lost 1.75% Friday, ending about 7% away from the entry and approaching potential support at the 200-day line. CRM stock was down another 0.8% early Tuesday.

4 Top Growth Stocks To Buy And Watch In The Stock Market Rally

Top Stocks To Buy And Watch: Airbnb, Inspire

New IBD Leaderboard stock Airbnb soared last week, surging past a 121.50 buy point out of a cup with handle. While it’s extended from this entry, the breakaway gap places an alternative entry at 135 — and the stock is just below that price following Friday’s sharp fall. ABNB stock moved down 1% Tuesday morning.

Backstory: The firm operates an online marketplace for lodging. Its primary offerings are homestays for vacation rentals. While tourism was badly hit by the coronavirus pandemic, it continues to roar back following strict lockdowns.

Recent IBD Stock Of The Day Inspire Medical Systems fell for a second day Friday, but is still in the 5% buy area past a flat base’s 262.64 buy point, according to IBD MarketSmith pattern recognition. The buy zone tops out at 275.77. INSP stock shows a modest 84 IBD Composite Rating. INSP stock fell 0.9% early Tuesday.

Backstory: The company sells an implantable device to treat sleep apnea through electrical stimulation of the nerves — a process called neurostimulation.

Dexcom, Wingstop Eye Latest Buy Points

Dexcom shares dropped 2.1% Friday, adding to Thursday’s losses. The stock added a handle to a cup base, creating a 121.21 buy point. The stock was down 1.2% Tuesday.

Backstory: On Feb. 9, Dexcom reported stronger-than-expected quarterly results. The beat comes as Dexcom’s newest continuous glucose monitor, or CGM, gains steam in the U.S. and Europe. These body-worn devices keep track of blood sugar in real time. The Food and Drug Administration cleared Dexcom’s new device, G7, last year.

Wingstop is squarely in buy range above a 169.04 buy point in a cup with handle in the wake of last week’s breakout move. The chase zone goes up to 177.49. WING stock was down 1.1% Tuesday, despite a note from Baird holding its rating at outperform and raising its 12-month price target to 190, from 175.

Backstory: The Dallas-based restaurant chain has more than 1,900 locations in the U.S. and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the U.K. The company added a net 40 stores in the prior quarter. Earnings are due Wednesday.

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Stocks To Buy And Watch In Stock Market Rally

These are six top stocks to buy and watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Buy Point
Inspire Medical Systems (INSP) 262.64 Flat base
Visteon (VC) 152.20 Cup base
Caterpillar (CAT) 239.95 Flat base
Airbnb (ABNB) 135.00 Breakaway Gap
JPMorgan (JPM) 138.76 Flat base
Wingstop (WING) 169.04 Cup with handle
Source: IBD Data As Of Feb. 21, 2023

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Tesla Stock

Tesla stock rallied 3.1% Friday, recovering a large part of Thursday’s 5.7% loss. Despite their strong rebound since Jan. 6, shares are still below the 200-day line and that key level looms as a potential resistance area. Shares closed Friday around 46% off their 52-week high.

Shares threatened to give up a portion of Friday’s gains, falling 1.8% Tuesday morning.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares lost 0.75% Friday. Shares are around 14% off their 52-week high and are moving up the right side of a new base. Apple stock fell 1.4% Tuesday.

Microsoft shares extended a losing streak to three sessions, falling 1.6% Friday. Shares are still above their 200-day line and about 18% off their 52-week high after recent gains. MSFT stock was down 1.5% Tuesday morning.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.


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