Dow Jones futures plunged more than 625 points Wednesday morning. Credit Suisse (CS) crashed 28% after the company’s biggest investor, Saudi National Bank, reportedly pulled its funding. The bank share’s fall quickly spread to other finances, dragging markets down sharply in the UK and Europe. Meanwhile, a key US inflation gauge, the producer price index, fell unexpectedly in February.
The SPDR S&P Regional Banking ETF ( KRE ) sold off nearly 3% Wednesday morning after Tuesday’s 2.1% decline. The sell-off was not as steep as the financial crashes seen on Friday and Monday. But this time, big banks, especially those with broad international exposure, seemed to lead the early declines. Bank of America (BAC) slipped 3.6%. JPMorgan (JPM) fell 2.6%. And Wells Fargo (WFC) fell 4.1% in premarket trade.
PPI Inflation Report
Early Wednesday, the Labor Department’s PPI fell 0.1% in February with an annual increase of 4.6%, compared with an expected monthly increase of 0.3% and an annual increase of 5.4%. The index follows the prices that producers receive for goods and services. Core PPI, which excludes prices received for energy and food, was flat on the month with an annual increase of 4.4% against an expected monthly increase of 0.4% and an annual increase of 5.2%.
Meanwhile, retail sales came from the merchandising department. Sales fell 0.4% in February, in line with estimates compared to January’s increase of 3.0%. A light reading of selling could potentially factor into the Federal Reserve’s thoughts on a rate hike next week.
On the earnings front, house builder Lennar (LEN) rose 2.5% following the company’s better-than-expected first-quarter results. The shares are building a flat base with a buy point of 109.38.
Academy sports and outdoor life (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX) and Five under (FEM) also comes out this week.
The stock market today
Head of electric vehicles Tesla ( TSLA ) traded down 2% Wednesday morning. Meanwhile, Dow Jones tech giants apple (AAPL) and Microsoft (MSFT) was sharply lower before the stock exchange opened.
Giant in social media Meta platforms (META), IBD Leaderboard Watchlist Palo Alto Networks (PANW) and New relic (NEWR) – as well as Dow Jones stocks Nike (NKE) and Salesforce (CRM) – are among the best stocks to watch in the ongoing stock market correction.
Palo Alto is an IBD Leaderboard Watchlist. New Relic was recently an IBD Stock Of The Day. And Nike was featured in this week’s Stocks Near A Buy Zone column.
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Dow Jones today: Oil prices, Treasury yields
Ahead of Wednesday’s opening bell, Dow Jones futures plunged 2%, S&P 500 futures were down 1.9%, with banks taking most of the big losses, along with Freeport McMoRan (FCX), Carnival cruise (CCL) and Coterra energy (CTRA).
Nasdaq 100 futures, which do not track the economy, lost 1.5% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 1.4% and SPDR S&P 500 ETF ( SPY ) fell 1.7% early Wednesday.
The 10-year US Treasury yield rose to 3.63 percent on Tuesday. Investors returned to bonds early Wednesday, sending the 10-year Treasury yield to 3.51% in morning trading.
Oil prices extended Tuesday’s sharp losses, briefly cutting below $70 a barrel for the first time since December 2021. West Texas Intermediate futures tumbled another 1.5%, struggling to hold above $70 a barrel. The Energy Information Administration delivers weekly oil storage data at 10:30 am
On Tuesday, the Dow Jones Industrial Average rose 1.1%, and the S&P 500 rose 1.65%. The tech-heavy Nasdaq composite rose 2.1% after a flurry of buying at the close.
Tuesday’s Big Picture column commented: “Tuesday marked the second day of a rally attempt for the Nasdaq Composite and the first day of a rally attempt for the S&P 500. While price action in individual growth stocks looks much better, the market still has to prove itself. “
Now is an important time to read IBD’s The Big Picture column amid the new stock market correction.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: Nike, Salesforce
Since the Oct. 3 bottom, Nike shares have rallied as much as 59% to a recent high of 131.31. Now, the stock is consolidating within a flat base that offers a buy point at 131.41, according to IBD MarketSmith pattern recognition. The NKE share fell 2.3% early Wednesday.
Despite Tuesday’s rally, the stock remains below its 50-day moving average, a key benchmark. A decisive retracement would be bullish for the base-building prospects, carving out the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.
In recent weeks, Dow Jones leader Salesforce has shown great upside following strong results for the fourth quarter. Those gains quickly disappeared during last week’s losses, but now the stock is back above the 178.94 cup-with-handle this week. Nevertheless, the market is in a correction, so investors should avoid new purchases until the market environment improves. The CRM share fell 1.4 percent on Wednesday.
3 top growth stocks to watch Stock correction
Top stocks to watch: Meta, Palo Alto, New Relic
Facebook parent Meta Platforms rallied above an early entry of 190.46 and is quickly approaching a flat-base buy point of 197.26 after an earnings-driven rally in February. Shares are about 2% away from their last buy point, when they rose 7.25% on Tuesday. Meta shares fell 1.5% on Wednesday morning.
Back story: Like its social media rivals, Meta is struggling due to a sharp reduction in ad revenue as clients reel over macroeconomic concerns, recession fears and higher interest rates. This comes as it spends billions in a risky effort to build the “metaverse,” a virtual reality world that has yet to catch on.
IBD Leaderboard Watchlist stock Palo Alto Networks continues to trade quietly in a handle following the stock’s 12.5% gain on Feb. 22. Shares remain within striking distance of a base buy point at 192.94. Bullishly, the stock’s relative strength line is at new highs, as the stock outperforms the market averages. The PANW share fell 1.3 percent on Wednesday.
Back story: On Feb. 21, the cybersecurity giant announced strong results for the quarter ended in January, with earnings reaching $1.05 per share, up 81% from a year earlier, on a 26% jump in revenue to $1.7 billion.
Recent IBD Stock Of The Day, New Relic, is working on a base with an 80.98 buy point in the wake of the February 8 earnings-driven rally. The RS line holds up for now. NEWR stock fell 3% early Wednesday.
Back story: New Relic offers a cloud-based suite of software products that enable organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help make data-driven decisions.
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Shares to watch in the stock market Correction
These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.
|company name||Symbol||Right point of purchase||Type of point of purchase|
|Meta platforms||(META)||197.26||Flat base|
|Palo Alto Networks||(PANW)||192.94||Cup with handle|
|Salesforce||(CRM)||178.94||Cup with handle|
Source: IBD data as of March 13, 2023
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Tesla shares rose 5% on Tuesday, rising for a third straight day and continuing to bounce after finding support at its 50-day moving average. Shares closed Tuesday about 52% off their 52-week high.
TSLA stock was down 2% Wednesday morning, threatening to give up some of Tuesday’s gains.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple rose 1.4% on Tuesday, extending this week’s rally from the long-term 200-day line. AAPL lost 1.2% Wednesday morning.
Microsoft shares moved further above the 200-day line after Tuesday’s 2.7% jump. The stock is still around 20% of its 52-week high after the latest decline. MSFT shares fell 1.6% early Wednesday.
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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