The Dow Jones Industrial Average dived as recession fears rose on new data. Tesla is at multiyear lows after a shocking plunge. A number of new Cathie Wood buys were getting battered. Microsoft and Apple got pummeled.
A trio of stocks near buy points were showing strength amid the carnage. Cardinal Health, Jazz Pharmaceuticals and AbbVie were all hanging tough. Given current action, now is a good time to be beefing up one's watchlist.
Meanwhile, the yield on the benchmark 10-year Treasury note ended the day flat at 3.69%. West Texas Intermediate crude rose dipped 0.2% to $78.20 per barrel.
Stock Market Hit By Data Double Blow
Stocks were dealt a double whammy after initial jobless claims rose to 216,000, below estimates for a rise to 225,000. The Federal Reserve is looking to cool the jobs market as it tries to fight inflation.
Gross domestic product was also stronger than expected in Q3, according to the Commerce Department. Its third estimate showed growth of 3.2% vs. the second estimate's 2.9%. This also suggests the Fed's attempts to slow the economy are yet to bear game-changing fruit.
Oanda senior market analyst Edward Moya said in a note to clients that there is a heavy seasonal impact to employment data and jobless claims should rise after the holidays. But if jobs hold steady, there could be more pain ahead due to Federal Reserve action.
"Wall Street still is pricing in one more rate hike at the February FOMC meeting, but if the data does not break, a March hike should start to get priced in," he said.
Bears Maul Nasdaq, IBD 50
The Nasdaq closed off lows but still fell 2.2%. Nvidia was among the worst performers, cratering 7%.
The S&P 500 suffered despite a late rally, giving up 1.5%. Carnival lagged here as it skidded 7.1%.
The S&P 500 sectors were all negative. Consumer discretionary and technology suffered the worst losses. Health was the strongest group, but still gave up slight ground.
Small caps were had a tough session, with the Russell 2000 losing 1.4%.
Growth stocks did not escape the wrath of the rampaging bears, with the Innovator IBD 50 ETF closing the day down 1.6%.
Dow Jones Today: Microsoft, Apple Stock Dive
The Dow Jones Industrial Average fared better than the other major indexes. Nevertheless, it still fell gave up 349 points, or 1.1%.
Microsoft stock was one of the worst performers on the blue chip index, falling 2.6%. It flashed a sell signal by undercutting the 50-day moving average.
Apple stock was also suffering, its 2.4% decline only slightly better than that of MSFT. It lost ground on its own 50-day line, MarketSmith analysis shows.
Aerospace giant Boeing was the worst performer on the Dow Jones today as it fell 4%.
Verizon fared best with a 1.4% gain. Nike also impressed with a 0.8% gain.
Futures: Inflation Data Due; Elon Musk Pledge Lifts Tesla Late
Tesla Stock Shocks To The Downside
TSLA had a truly shocking day, falling 8.9%. The stock has shed almost 69% of its value so far this year.
The latest painful decline came after the firm offered $7,500 discounts on Model 3 and Model Y vehicles delivered in the U.S. this month.
The EV automaker is also offering 10,000 miles of free supercharging as part of the deal. It comes amid rising fears that Tesla is facing weakening demand.
As if that wasn't enough, Wall Street is concerned CEO Elon Musk and his ongoing distractions with Twitter could hurt both the EV giant's sales and its brand.
Tesla has now erased years of gains, sitting at a level last seen in September 2020. Those who got in when the stock hit its split-adjusted all-time high of 407.36 in November 2021 are nursing extremely painful losses.
New Cathie Wood Buys Plummet
Famous stock picker Cathie Wood made four stock purchases for her ARK Innovation ETF yesterday, including TSLA. All slumped badly.
Pandemic darling Zoom Video Communications finished off session lows but still gave up 5.7%. It is trading below all of its moving averages.
Payments stock Block made a solid late rally but still dipped 3.2%. It is among the worst 23% of stocks over the past 12 months.
Video-streaming play Roku fared best as it fought back to close down 1.4%.
The ARK Innovation ETF fell 3.4% and is now down more than 67% since the start of 2022. It is also trading 12.1% below its 50-day moving average.
Outside Dow Jones: 3 Stocks Near Entries Flex Muscles
With the stock market getting hammered amid ongoing bearish action, investors should be looking for stocks showing relative strength.
Cardinal Health saw its relative strength line hit new highs as it eyes a flat base entry of 81.67.
It is in the top 3% of stocks in terms of price performance over the last 12 months, though the EPS Rating of 68 out of 99 is not ideal.
Jazz Pharmaceuticals also saw its RS line spike as it nears a double-bottom base entry of 163.41. This is a first stage pattern.
The firm, which makes treatments for narcolepsy and other sleep disorders, has solid all-around performance. This is reflected in an IBD Composite Rating of 90.
AbbVie outperformed by turning in a slender gain, driving its RS line to fresh highs. It is eying a cup-with-handle entry of 167.85.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
