The Dow Jones Industrial Average fell Monday as the Russell 2000 turned negative for 2023. Meanwhile, a Cathie Wood stock plummeted and Tesla reversed higher amid delivery data. That came as Coinbase and Riot Blockchain pared some early gains as top crypto Bitcoin rallied.
Plus, a trio of noteworthy stocks moved toward buy points Monday — Cadence Design Systems, Logitech International and FedEx.
Treasury yields spiked after Congress averted a government shutdown at the weekend. The 10-year yield soared 12 basis point to 4.69% while the two-year yield jumped seven basis points to 5.12%. The yield curve remains inverted.
Oanda senior market analyst Edward Moya said rising yields are taking a toll on equities.
"U.S. stocks are declining as the Treasury yields soar," he said in a note to clients. Investors are starting to realize the yield available across the Treasury curve is just too attractive right now."
Nasdaq Up As Small Caps Crumble
The tech-heavy Nasdaq fared best out of the major indexes. It rallied out of negative territory to close up 0.7. Leaderboard stock Zscaler stood out with a gain of around 3%.
But the S&P 500 ended nominally positive but was essentially flat. Discover Financial Services fared best on the benchmark index as it managed a 4.8% gain. The credit card company announced it would comply with calls from the Federal Deposit Insurance Corp. to improve consumer compliance and corporate governance.
The S&P 500 sectors were mostly negative. Utilities and energy lagged the most in the stock market today. Only technology, communication services and consumer discretionary managed to end the day in positive territory.
Small caps got mauled by the bears, with the Russell 2000 down 1.7%. The index turned negative for 2023. Growth stocks were also spanked, with the Innovator IBD 50 ETF falling 0.7%.
Dow Jones Today: Microsoft, Apple Stock Shine
The Dow Jones Industrial Average ended off lows but still fell 74 points or 0.2%.
Apple and Microsoft were among the best performing components. AAPL rose 1.5% while old rival MSFT gained 1.9%.
But UnitedHealth fared best on the Dow Jones today as it popped 2.1%. It pulled further away from its 50-day and 200-day moving averages, MarketSmith analysis shows.
Boeing and 3M were the worst laggards. BA finished down 2.2% while MMM dipped 3.6%.
Cathie Wood Buys BEAM, Stock Plummets
The current market shows even the most famous investors can have negative trades. That was underlined after a Cathie Wood buy took a swan dive Monday.
On Friday, Wood's ARK Innovation ETF bought 59,846 shares in biotechnology player Beam Therapeutics. But Beam came under heavy selling Monday, ended the session down 10.6%.
The stock was trying to move back toward its 50-day moving average but now has skidded 15.5% below the key benchmark, according to MarketSmith analysis.
The Cambridge, Mass.-based company operates in the field of gene therapies and genome editing. The firm uses base editing, a next-generation form of CRISPR gene editing.
IBD recommends buying stocks with strong earnings and price performance rather than laggards. Look for leaders in strong industries that are showing superior earnings growth and sales, such as those in the IBD 50.
Tesla Stock Whipsaws, Closes Higher
Electric-vehicle giant Tesla was fighting to stay positive after the firm posted a decline in third-quarter deliveries.
Led by Chief Executive Elon Musk, Tesla said Monday it produced 430,488 vehicles and delivered 435,059 during the third quarter. Ahead of the release, analysts expected deliveries of roughly 461,000, according to FactSet.
The news comes after Tesla launched a slightly updated Model Y in China on Sunday. The battery life for both the base and long-range variants was increased.
Tesla whipsawed, but eventually managed to fight its way back into positive territory. TSLA stock ended the session with a modest 0.6% lift. Volume was also slightly above average.
TSLA stock has formed a cup-with-handle base with a 278.98 buy point but it faces a challenge to overcome resistance at the 50-day moving average. It closed the session just above the key benchmark.
Bitcoin Pops; COIN, RIOT Stock Gains Fade
Cryptocurrency icon Bitcoin has climbed 2.8% over the past 24 hours according to CoinDesk data. The digital currency is now up nearly 68% in 2023.
Gains were fading for crypto stocks, though. Trading platform Coinbase actually reversed slightly lower before ended with a slender 0.3% gain. COIN stock also failed in an attempt to get back to its 50-day line.
Other digital currency plays were faring better though. The Grayscale Bitcoin Trust finished the day up 1.4%, well off session highs.
But it was Bitcoin mining play Riot Blockchain that impressed the most as it vaulted 5.9%, though it also closed off highs for the day.
Outside Dow Jones: 3 Stocks Eye Entries
With the market in the grip of a correction, now is the time to bulk up one's watchlist. Here are a selection of names eyeing entries.
Cadence Design moved toward a cup-with-handle buy point of 247.50. The relative strength line looks muscular. Further, overall performance is strong here, which is reflected in its IBD Composite Rating of 93 out of 99.
Meanwhile, computer peripherals play Logitech International has formed a double-bottom base with an ideal entry point of 72.46.
Big Money has been a net buyer of LOGI stock of late, with its Accumulation/Distribution Rating coming in at B.
Finally, FedEx is holding firm near a flat base buy point of 270.95. Stock market performance is its strongest suit here. FDX is in the top 5% of stock in terms of price performance over the past 12 months.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
