The Dow Jones Industrial Average rose more than 300 points on Tuesday morning as a key inflation report and recovering financial data bolstered early trade. Contested regional bank First Republic (FRC) rallied 60% in morning action as federal government measures to quell bank fears after Monday’s plunge appeared to be taking effect.
The SPDR S&P Regional Banking ETF (KRE) was up more than 10% on Tuesday, recovering after Monday’s 12% plunge. KeyCorp (KEY) up almost 20% Western Alliance (WAL) Launched 45% higher. Finally, Karl Schwab (SCHW) rallied 14% in early morning trade.
CPI Inflation Report
Wall Street suddenly sees a solid chance that the Federal Reserve will pause its rate-hiking campaign at next week’s meeting as the collapse of three banks stokes concerns about broader financial sector strains.
That could detract from the recent significance of CPI, which rose 0.4% in February, in line with expectations. Core CPI rose 0.5% in February, ahead of the 0.4% estimate. Headline CPI inflation was an estimated 6.0%, with core inflation also matching estimates at 5.5%.
But almost regardless of the CPI result, moves of half a point now appear to be off the table. And that’s just a week after Fed Chair Jerome Powell signaled that policymakers were ready to reaccelerate rate hikes from February’s quarter-point pace at next week’s meeting.
Bank failures sparked a run on bonds and other safe havens, sparking a sharp fall in Treasury yields and signaling growing doubts about the strength of the economy. Even if the Fed doesn’t pause next week, markets now appear to be betting that rate cuts are just around the corner.
On the earnings front GitLab (GTLB) plunged 30% in premarket trading after the company’s revenue forecast came in weaker than expected.
At the end of the season, revenue will continue to flow that week. Below are Academy Sport & Outdoor (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX), five below (Five and lennar (LEN).
stock market today
United Airlines (UAL) declined 3% after the company said it expected a quarterly loss in the first quarter.
Market leader in electric vehicles Tesla (TSLA) traded up 2.5% on Tuesday morning following positive registration data from China. Meanwhile, Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were higher post market open.
social media giant meta platforms (META), IBD Leaderboard Watchlist Palo Alto Networks (PANW) and New relic (NEWR) – as well as Dow Jones stocks Nike (NKE) and Foreclosure (CRM) – are among the top stocks to watch in the ongoing stock market correction.
Palo Alto is a stock on the IBD Leaderboard watch list. New Relic was an IBD Stock of the Day recently. 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
After Tuesday’s opening bell, the Dow Jones Industrial Average was up 1% and the S&P 500 was up 1.4%. The tech-heavy Nasdaq Composite gained 1.6% in morning action.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust (QQQ) was up 1.6% and SPDR S&P 500 ETF (SPY) was up 1.4% early Tuesday.
The US 10-year Treasury yield fell to 3.51% on Monday as safe-haven trading propelled bonds sharply higher following the collapse of the Silicon Valley bank. On Tuesday, the 10-year Treasury yield rallied to 3.59% in morning trade.
Oil prices continued to decline early Tuesday after Monday’s sharp losses. West Texas Intermediate futures fell 2.5% to trade just below $73 a barrel.
stock market correction
On Monday, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.15%. The tech-heavy Nasdaq Composite rose 0.45% in a day of volatile trading.
Monday’s Big Picture column commented, “The S&P 500 slipped more than 1% in early trade but rebounded to close less than 0.2% lower.
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
Keep an Eye on Dow Jones Stocks: Nike, Salesforce
Since their Oct. 3 bottom, Nike shares are up 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 of 131.41 according to pattern recognition by IBD MarketSmith. NKE shares were up 1.25% early Tuesday.
Amid recent weakness, the stock is below its 50-day moving average, a key benchmark. A crucial replay would be bullish for the base building outlook and would cut the right side of the pattern. The line of relative strength is also holding up well during the rapidly evolving stock market correction.
For the past few weeks, Dow Jones leader Salesforce has shown major bullishness after strong fourth-quarter results. But those gains have mostly evaporated given the recent market weakness, and now the stock is back below an entry of 178.94 cup w/ handle. Still, the stock’s recent strength is reason to watch the software leader in the coming sessions. CRM stock rose 2.5% on Tuesday.
3 Top Growth Stocks to Watch stock market correction
Top stocks to watch: Meta, Palo Alto, New Relic
Facebook parent Meta Platforms is quietly building a flat base with a buy point of 197.26 after an earnings-driven price rally in February. Shares are about 8% off the last buy point as they rose 0.8% on Monday. Meta shares were up 4.5% Tuesday morning.
Backstory: Like its social media peers, Meta is grappling with a sharp drop in ad revenue as customers squirm over macro concerns, recession fears, and higher interest rates. This is happening as it spends billions on a risky bet to build the “Metaverse,” a virtual reality world that has yet to catch on.
IBD leaderboard watch Palo Alto Networks stock continues to trade quietly in a grip after the stock’s 12.5% surge on Feb. 22. Shares remain within striking distance of the buy point from a 192.94 basis. On an optimistic note, the stock’s relative strength line is at new highs as the stock is significantly outperforming the market average. PANW shares were down 0.2% on Tuesday.
Backstory: On Feb. 21, the cybersecurity giant announced strong results for the quarter ended January, during which earnings hit $1.05 per share, up 81% year over year on a 26% jump in revenue to 1 $.7 billion.
The latest IBD stock of the day, New Relic, is operating on a flat basis with a buy point of 80.98 after Feb. 8’s profit-driven rally. The RS line will hold out for the time being. NEWR stock was up 1.5% early Tuesday.
backstory: New Relic offers a cloud-based suite of software products that enable companies to collect, store and analyze massive amounts of data in real time. Customers gain better insight into their enterprise software to make data-driven decisions.
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Stocks to watch during the stock market correction
These are four top stocks to watch in today’s stock market, including two top Dow Jones stocks.
|Company Name||symbol||Correct purchase point||Type of purchase point|
|New relic||(NEWS)||80.98||flat base|
|Nike||(NKE)||131.41||Cup with handle|
|Palo Alto Networks||(PANW)||192.94||Cup with handle|
|Foreclosure||(CRM)||178.94||Cup with handle|
Source: IBD data as of March 13, 2023
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Tesla stock rose 0.6% on Monday as it continues to see some support around its 50-day moving average. Shares closed about 55% below their 52-week high on Monday.
TSLA shares rose 2.5% Tuesday morning to add to Monday’s gains.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.3% on Monday, enduring a two-day losing streak and finding support at the 200-day long-term moving average. AAPL was up 0.9% on Tuesday morning.
Microsoft shares regained their 200-day moving average during Monday’s 2.1% surge. The stock is still about 20% off its 52-week high after recent declines. MSFT shares are up 1.5% early Tuesday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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