Dow Jones dives 500 points after economic data; Home Depot, Walmart fall on revenue

Dow Jones dives 500 points after economic data;  Home Depot, Walmart fall on revenue
Dow Jones dives 500 points after economic data;  Home Depot, Walmart fall on revenue

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


Among other companies reporting earnings, Fluorine (FLR), Harmony Life Sciences (HRMY) and Huntsman (SHE) was on the move.

The Fluor share rose 0.55% at the opening, while the Harmony share plunged 10%. Furthermore, the Huntsman share fell 4.4%.

On the economic front, February’s preliminary composite purchasing managers’ index, or PMI, showed the services index moving back into expansion territory, while the manufacturing index remained in decline. The services index had a reading of 50.5, better than the estimate of 47.2, while the manufacturing index came in at 47.8 against an estimate of 47.3.

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

The stock market today

Electric vehicle leader Tesla fell nearly 2% Tuesday morning. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) was sharply lower after today’s market opening.

IBD Leaderboard stock Airbnb (ABNB) Dexcom (DXCM), Inspire medical systems (INSP) and Wing stop (WING) — as well as Dow Jones stocks larva (CAT), JPMorgan Chase (JPM) and Salesforce (CRM) — is among the best stocks to buy and watch amid the recent 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 fell 1.5%, with Home Depot and Walmart doing the bulk of the damage. The S&P 500 fell 1.3 percent. And the tech-heavy Nasdaq Composite fell 1.7% in morning action as (JD) and PDD Holdings (PDD) led to a selloff among Chinese e-commerce stocks.

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Among U.S. exchange-traded funds, 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 US Treasury yield fell to 3.82% on Friday, snapping a three-day winning streak but still finishing with solid weekly gains. On Tuesday morning, the 10-year yield jumped to 3.9% as bonds fell, even as a rally in safe havens drove the US dollar higher against major foreign currencies.

Oil prices struggled to end a four-day losing streak, rising less than 1% on 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 fell 0.6 percent.

Friday’s Big Picture column commented: “The big picture remains positive for now, justifying building 60% to 80% exposure. But remember to stay tuned to the sell signals in your portfolio. Any stock that falls 7% to 8% from your buy Price should be removed. Also watch for 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 remains in buy territory above a flat-base entry at 239.85 as it tries to find support around its 50-day moving average, according to IBD MarketSmith chart analysis. Shares climbed 0.5% on Friday and continue to hold above the 50-day mark. CAT shares fell 0.8% on Tuesday morning.

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

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

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4 top growth stocks to buy and watch Stock market rally

Top stocks to buy and watch: Airbnb, Inspire

New IBD Leaderboard stock Airbnb soared last week, past a 121.50 cup-with-handle buy point. While extended from that entry, the breakout gap places an alternative entry at 135 — and the stock is just below that price after Friday’s sharp drop. The ABNB share fell 1 percent on Tuesday morning.

Background story: The company operates an online marketplace for accommodation. Its primary offering is vacation rental homestays. While tourism was hit hard by the coronavirus pandemic, it continues to roar back after strict lockdowns.

Recently IBD Stock Of The Day Inspire Medical Systems fell for another day Friday, but remains in 5% buy territory 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 shares fell 0.9% early Tuesday.

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

Dexcom, Wingstop Eye Last Purchase Points

Dexcom shares fell 2.1% Friday, adding to Thursday’s losses. The stock added a handle to a cup base, creating a buy point at 121.21. The stock fell 1.2 percent on Tuesday.

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

Wingstop is fully in buy territory above 169.04 buy points in a cup with handle following last week’s breakout move. The hunting zone goes up to 177.49. WING shares fell 1.1% on Tuesday, despite a note from Baird that kept its rating at outperform and raised its 12-month price target to 190 from 175.

Background story: The Dallas-based restaurant chain has more than 1,900 locations in the US and international markets, according to Dow Jones Newswires. Its international locations include Mexico, Colombia, Panama, Singapore and the United Kingdom. The company added a net 40 stores last quarter. The income is due on Wednesday.

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Shares to buy and watch in a 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 Right point of purchase Type of point of purchase
Inspire medical systems (INSP) 262.64 Flat base
Visteon (VC) 152.20 Cup base
larva (CAT) 239.95 Flat base
Airbnb (ABNB) 135.00 Breakaway Gap
JPMorgan (JPM) 138.76 Flat base
Wing stop (WING) 169.04 Cup with handle
Source: IBD data as of February 21, 2023

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Tesla shares

Tesla shares rose 3.1% on Friday, recovering much of Thursday’s 5.7% loss. Despite their sharp decline since January 6, shares remain below the 200-day mark, and that key level looms as a potential resistance area. Shares closed Friday around 46% off their 52-week high.

The stock threatened to give up some of Friday’s gains, falling 1.8% on Tuesday morning.

Dow Jones Leaders: Apple, Microsoft

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

Microsoft shares extended a losing streak to three sessions, falling 1.6% on Friday. The shares are still above the 200-day mark and approx. 18% off 52 week high after recent gains. MSFT shares fell 1.5% on 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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