The Dow Jones Industrial Average plunged more than 500 points on Wednesday Swiss credit (CS) crashed 28% on reports that the company’s largest investor, Saudi National Bank, withdrew funding. Meanwhile, a key US inflation gauge, the Producer Price Index, fell unexpectedly in February.
Credit Suisse’s decline quickly spread to other financials, sending markets in the UK and Europe sharply lower. Also, the SPDR S&P Regional Banking ETF (KRE) sold off 4.5% Wednesday morning after Tuesday’s uptick of 2.1%. The sales were not as steep as the Friday and Monday financial crashes.
But this time, big banks – especially those with broad international exposure – seemed to lead the first declines. bank of America (BAC) slipped 3.6%. JPMorgan (JPM) fell 3.5%. And Wells Fargo (WFC) fell 4.7% in early trading.
PPI inflation report
Early Wednesday morning, the Labor Department’s PPI fell 0.1% in February with an annual increase of 4.6%, compared to an expected monthly increase of 0.3% and an annual increase of 5.4%. The index tracks the prices producers receive for goods and services.
Core PPI, excluding energy and food prices received, remained flat this month with an annual increase of 4.4% versus an expected monthly increase of 0.4% and an annual increase of 5.2%.
Elsewhere, retail sales came from the Commerce Department. Sales fell 0.4% in February, in line with estimates from January’s 3.0% increase. A light reading of sales could potentially play a role in the Federal Reserve’s thinking about a rate hike next week.
In terms of income, homebuilder lennar (LEN) rose 2% following the company’s better-than-expected first-quarter results. Stocks are building a flat base with a buy point of 109.38.
Academy Sport & Outdoors (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX) and Five below (FIVE) are also coming out this week.
Leader of electric vehicles Tesla (TSLA) was trading 2% lower Wednesday morning. Also the technology giants of Dow Jones Apple (AAPL) and Microsoft (MSFT) were sharply lower after the market opened.
Social media giant Meta platforms (META), IBD Leaderboard watchlist stock Palo Alto Networks (PANW) and New relic (NEWR) — as well as Dow Jones stocks Nike (OR) and Sales team (CRM) – are among the top stocks to watch during the ongoing correction in the stock market.
Palo Alto is an IBD Leaderboard watchlist stock. New Relic was recently an IBD Stock Of The Day. And Nike was near a buy zone in this week’s Stocks section.
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Dow Jones Today: Oil Prices, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average plunged 1.6%. The S&P 500 fell 1.5%, with banks posting the most heavy losses Freeport McMoRan (FCX), Carnival cruises (CCL) and Coterra Energy (CTRA).
The Nasdaq composite, which does not track financial numbers, lost 1.2% in the morning’s action.
Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.2% and the SPDR S&P 500 ETF (SPY) fell 1.7% early Wednesday.
The 10-year US Treasury yield recovered to 3.63% on Tuesday. Investors plunged back into bonds early Wednesday, pushing the yield on 10-year Treasuries to 3.47% in morning trading.
Oil prices extended Tuesday’s sharp losses and fell below $69 a barrel for the first time since 2021. West Texas Intermediate futures fell another 4%. The Energy Information Administration provides weekly oil inventory data at 10:30 a.m
Stock market correction
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 burst of buying at the close.
Tuesday’s Big Picture column noted, “Tuesday was 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 remains must prove itself.”
This 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 bottoming out on Oct. 3, Nike shares are up a whopping 59% to their recent high of 131.31. Now the stock is consolidating within a flat base that offers a buy point of 131.41, according to IBD MarketSmith pattern recognition. NKE shares fell 2% early Wednesday.
Despite Tuesday’s gains, the stock remains below its 50-day moving average, an important metric. A decisive rematch would be bullish for base-building prospects, cutting the right side of the pattern. The relative strength line also holds up well during the fast-moving stock market correction.
In recent weeks, Dow Jones leader Salesforce has shown great upside after strong fourth-quarter results. Those gains quickly faded during last week’s losses, but now the stock is back above a 178.94 cup-with-handle entry this week. Still, the market is in a correction, so investors should avoid making new purchases until the market environment improves. CRM shares fell 1.2% on Wednesday.
3 Top growth stocks to watch Stock market correction
Top stocks to watch: Meta, Palo Alto, New Relic
Facebook parent Meta Platforms raced above an early entry at 190.46 and is fast approaching a flat base of 197.26 buy point after a revenue-driven price hike in February. Shares are about 2% off the last buy point as they rose 7.25% on Tuesday. Meta shares were down 0.3% on Wednesday morning.
Back story: Like social media rivals, Meta is struggling due to a sharp drop in ad revenue as customers grapple with macroeconomic concerns, recession fears and higher interest rates. This is happening as it spends billions of dollars on a risky bet to build the “metaverse,” a virtual reality world that has yet to catch on.
IBD Leaderboard watchlist stock Palo Alto Networks continues to trade calmly in a hold following the share’s 12.5% gain on Feb. 22. The shares remain within striking distance of a base’s 192.94 buy point. Bullish, the stock’s relative strength line is at new highs as the stock far outperforms market averages. PANW shares fell 0.8% on Wednesday.
Back story: On Feb. 21, the cybersecurity giant reported good results for the quarter ended January, when earnings were $1.05 per share, up 81% from a year earlier, on a 26% increase in revenue to $1. 7 billion.
Recent IBD stock of the day, New Relic, is building a base with a buy point of 80.98 in the wake of the February 8 earnings-driven surge. The RS line will hold for the time being. Shares of NEWR fell 1.3% on 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 greater insight into their business software to help make data-driven decisions.
Learn how to time the market with IBD’s ETF market strategy
Stocks to keep an eye on when the stock market corrects
Here are four top stocks to watch in today’s stock market, including two Dow Jones leaders.
|Company Name||Symbol||Correct point of purchase||Point of sale type|
|Meta platforms||(META)||197.26||Flat base|
|Palo Alto Networks||(PANW)||192.94||Cup with handle|
|Sales team||(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 the 50-day moving average. Shares closed around 52% of their 52-week high on Tuesday.
TSLA shares fell 2% Wednesday morning, threatening to give up some of Tuesday’s gains.
Dow Jones leaders: Apple, Microsoft
Among Dow Jones stocks, Apple stocks rose 1.4% on Tuesday, extending this week’s recovery from the long-term 200-day line. AAPL lost 0.9% on Wednesday morning.
Microsoft shares rose further above the 200-day mark after Tuesday’s jump of 2.7%. The stock is still about 20% off its 52-week high after recent declines. MSFT shares fell 0.2% on Wednesday.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.
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