The Dow Jones Industrial Average plunged more than 500 points on Wednesday, as Swiss credit (CS) plummeted 28% on news that the company’s biggest investor, Saudi National Bank, pulled funding. Meanwhile, a key gauge of US inflation, the producer price index, unexpectedly fell in February.
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Credit Suisse’s decline quickly spread to other financial stocks, dragging markets lower in the UK and Europe. Additionally, the SPDR S&P Regional Banking ETF (KRE) sold 4.5% on Wednesday morning after Tuesday’s 2.1% rebound. The sell off was not as steep as the financial crashes seen on Friday and Monday.
But this time around, the big banks — especially those with broad international exposure — appeared to lead the early declines. Bank of America (BAC) slipped 3.6%. JP Morgan (JPM) fell 3.5%. And Wells Fargo (WFC) fell 4.7% in early trade.
PPI inflation report
Early Wednesday, 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 received by producers for goods and services.
The basic PPI, which excludes prices received for energy and food, remained stable over the month with an annual increase of 4.4% against 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% rise. A slight reading in sales could potentially feature in the Federal Reserve’s thinking about a rate hike next week.
On the earnings front, the homebuilder Lennar (LEN) rose 2% after the company’s better-than-expected first-quarter results. Stocks are building a flat base with a buy point of 109.38.
Academy Sports and Outdoors (ASO), Adobe (ADBE), General dollar (DG), fedex (FDX) and five below (FIVE) are also due out this week.
stock market today
Leader in electric vehicles You’re here (TSLA) was trading down 2% on Wednesday morning. Also, tech giants Dow Jones Apple (AAPL) and Microsoft (MSFT) were down sharply after the market opened.
Social Media Giant Metaplatforms (META), IBD Ranking Watchlist Stock Palo Alto Networks (PANW) and New relic (NEWR) – as well as Dow Jones stocks Nike (NKE) and Selling power (CRM) – are among the top stocks to watch in the ongoing stock market correction.
Palo Alto is an IBD Leaderboard watchlist stock. 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 Price, Treasury Yields
After Wednesday’s opening bell, the Dow Jones Industrial Average plunged 1.6%. The S&P 500 fell 1.5%, with banks taking most of the heavy losses, as well as Freeport McMoRan (FCX), Carnival Cruises (CCL) and Coterra Energy (CTRA).
The Nasdaq composite, which does not track financial stocks, lost 1.2% in morning action.
Among U.S. 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 rebounded to 3.63% on Tuesday. Investors piled into bonds early Wednesday, pushing the 10-year Treasury yield to 3.47% in morning trading.
Oil prices extended Tuesday’s steep losses, dropping 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 rebounded 1.1% and the S&P 500 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 an attempted rally for the Nasdaq composite and the first day of an attempted rally for the S&P 500. individual growth 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 renewed stock market correction.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: Nike, Salesforce
Since the Oct. 3 low, Nike shares are up 59% to their recent high at 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 stock fell 2% early Wednesday.
Despite Tuesday’s rise, the stock remains below its 50-day moving average, a key benchmark. A decisive rally would be bullish for the basic construction outlook, sculpting the right side of the pattern. The relative strength line is also holding up well during the rapid stock market correction.
Over the past few weeks, Dow Jones leader Salesforce has shown great upward strength after strong fourth quarter results. Those gains quickly faded in last week’s losses, but the stock is now back above a 178.94 cup entry with a handle this week. Still, the market is in a correction phase, so investors should avoid further buying until the market environment improves. CRM stock fell 1.2% on Wednesday.
3 top growth stocks to watch in the Stock market correction
Top stocks to watch: Meta, Palo Alto, New Relic
Meta Platforms, Facebook’s parent company, broke an early entry at 190.46 and is rapidly approaching the buy point of 197.26, a flat base, after an earnings-fueled price surge in February. The shares are about 2% away from the last buying point, as they rose 7.25% on Tuesday. Meta shares were down 0.3% on Wednesday morning.
Pass: Like its social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as customers struggle due to macroeconomic concerns, recession fears and rising interest rates. It comes as he spends billions of dollars on a gamble to build the “metaverse”, a virtual reality world that has yet to take root.
Watchlist IBD Leaderboard Palo Alto Networks stock continues to trade quietly in a handful after the stock rose 12.5% on Feb. 22. Stocks remain within striking distance of the 192.94 one-basis buy point. On the upside, the stock’s relative strength line hits new highs, with the stock significantly outperforming market averages. PANW stock traded down 0.8% on Wednesday.
Pass: On February 21, the cybersecurity giant announced strong results for the quarter ended January, which saw earnings hit $1.05 per share, up 81% from a year earlier, with an increase 26% of its revenue to $1.7 billion.
The recent IBD Stock Of The Day, New Relic, is working on a basis with a buy point of 80.98 following the February 8 earnings fueled surge. The RS line is holding up for now. NEWR stock slid 1.3% early Wednesday.
Pass: New Relic provides a suite of cloud-based software products that enables organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help them make data-driven decisions.
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Stocks to watch in the stock market correction
These are four stocks to watch in today’s stock market, including two leaders from the Dow Jones.
| Company Name | Symbol | Correct point of purchase | Point of purchase type |
|---|---|---|---|
| Metaplatforms | (META) | 197.26 | Flat bottom |
| Nike | (NKE) | 131.41 | Flat bottom |
| Palo Alto Networks | (PANW) | 192.94 | Mug with handle |
| Selling power | (RCMP) | 178.94 | Mug with handle |
Source: IBD data as of March 13, 2023
Join IBD experts as they analyze the top stocks of the current market correction on IBD Live
Tesla Stock
Tesla stock rebounded 5% on Tuesday, rising for a third straight day and continuing to rebound after finding support at its 50-day moving average. Shares closed Tuesday about 52% off their 52-week high.
TSLA stock fell 2% on Wednesday morning, threatening to give up some of Tuesday’s gains.
Dow Jones Leaders: Apple, Microsoft
Among Dow Jones stocks, Apple shares rose 1.4% on Tuesday, extending this week’s rebound from the long-term 200-day line. AAPL lost 0.9% Wednesday morning.
Microsoft shares crossed the 200-day line after Tuesday’s 2.7% jump. The stock is still around 20% off its 52-week high after recent declines. MSFT stock fell 0.2% early Wednesday.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.
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