The Dow Jones Industrial Average and other indexes traded near session lows at midday Friday. Hawkish comments from St. Louis Federal Reserve President James Bullard started the decline on Thursday, with follow-through selling pressure as we head toward the long holiday weekend.
The Dow Jones index is trying to hold support at its 50-day moving average. Dow decliners include Chevron, which was weighed down by a big drop in oil prices. U.S. crude oil futures fell 3% to $76.11 per barrel at midday. The energy giant fell below its 200-day moving average.
Also in the Dow Jones, Salesforce gave back 2.6% as it battles near its 21-day exponential moving average. On the flip side, defensive stocks Amgen, Merck and Coca-Cola outperformed in the early going.
Fed fund interest rates rose after recent readings on consumer and wholesale inflation came in hotter than expected. After hitting a low of around 3.33% on Feb. 2, the 10-year Treasury yield began climbing and was flat midday Friday at 3.84%.
As it stands now, federal funds traders are pretty confident about a quarter-point hike in March and another one in May. The chances of a 50-basis-point hike in March are around 20%. For the June meeting, the chances of another quarter-point hike have risen to around 60%.
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Dow Jones stock Home Depot gave back 2% ahead of next week's earnings report. Results are due Tuesday before the open. HD stock has been straddling its 10-week moving average as it forms a choppy flat base.
After a strong three-session rally, Bitcoin was down 2% to around $24,000.
The Innovator IBD 50 ETF sold off 1.3%.
Outside the Dow Jones
The Nasdaq composite was down 1.4%, the S&P 500 fell 1% and the Russell 2000 lost 0.4%. The Nasdaq composite and S&P 500 marked fresh distribution days Thursday. The count now stands at three for the S&P 500 and two for the Nasdaq.
Along with the Dow Jones Industrial Average, both indexes confirmed a new uptrend on Jan. 6 with big percentage gains in higher volume. The rally has worked well due to limited signs of distribution. The S&P 500 lost support at its 21-day line early Friday. The Nasdaq is testing support at its 21-day line.
HubSpot was a rare bright spot in the technology sector. The enterprise software stock gapped up past a 399.65 entry after reporting a 91% surge in quarterly profit. Revenue increased 27% to $469.7 million.
DraftKings surged more than 14% on news that Q4 revenue jumped 81% to $855.1 million. That was well above the $800 million consensus. The sports-betting firm also reported a narrower-than-expected loss of 53 cents per share.
DoorDash reported healthy Q4 revenue of $1.8 billion, up 40%. The company also announced a $750 million share buyback. But the stock reversed lower, dropping shares nearly 6%.
Deere gapped above its 50-day line after earnings and revenue topped expectations. The farm machinery giant broke sharply below its 5o-day line last month.
Many energy stocks were down in heavy volume. Halliburton has fallen more than 7% below its 40.09 buy point, which is a sell signal. It's also getting stuck below the 50-day moving average.
NOV, which makes drilling equipment, gapped down more than 3% and is more than 7% below its 24.35 buy point. The stock, though, is holding at its 50-day line.
Inside the MarketSmith Growth 250, Kinsale Capital was the big winner, up more than 10%. The stock gapped above the 305.20 buy point of a cup-with-handle base. The insurer reported a 48% rise in quarterly profit. Revenue increased 32% to $243 million.
AutoNation also gapped up on earnings. But AN stock was already extended past the 5% buy zone from a 125.47 entry. Investors who bought at the 125.47 buy point could take at least some profits.
Moderna slumped 5% at midday after announcing mixed results for its experimental RNA-based flu vaccine.
Follow Ken Shreve on Twitter @IBD_KShreve for more Dow Jones analysis and insight.
