The Dow Jones Industrial Average fell as yields spiked amid further turmoil for the British pound sterling. A further step was taken in the ongoing legal fight between Tesla CEO Elon Musk and Twitter. Coinbase and Riot Blockchain gained as Bitcoin rallied.
Meanwhile, former Leaderboard stock Planet Fitness popped on an upgrade, and Hershey and J.M. Smucker showed strength near buy points.
Volume was lower on both the Nasdaq and the New York Stock Exchange vs. the same time on Friday.
The yield on the benchmark 10-year Treasury note surged 19 basis points to 3.89%. West Texas Intermediate crude oil dipped nearly 3% to under $77 per barrel.
British Pound Turmoil Hits U.S. Markets
The British pound continued to struggle following a tax cut and stimulus plan from new British Chancellor Kwasi Kwarteng. A single pound sterling fell as low as $1.04 in Monday's predawn trading.
"The Bank is monitoring developments in financial markets very closely in light of the significant repricing of financial assets," Bank of England Governor Andrew Bailey said in a statement.
The pain was hitting American equities, Oanda senior market analyst Edward Moya said.
"U.S. stocks are struggling given the turmoil happening with UK financial markets," he said in a note to clients. "FX volatility is extreme and that will be a major headache for multi-nationals."
He also said Wall Street is "rejecting the Chancellor's plan which does not get a grip of public finances."
Dow Jones Dips; Small Caps Struggle
The Dow Jones was down more than 300 points, or 1.2%. The Nasdaq fared best out of the indexes, dropping 0.5%. The S&P 500 also lagged, falling 1.1%.
The S&P 500 sectors were mostly negative. Real estate and utilities struggled the most, while consumer discretionary and staples fared the best.
Small caps were mauled by the bears, with the Russell 2000 dipping 1.4%.
The Innovator IBD 50 ETF, a bellwether for growth stocks, dropped 1.2%.
Dow Jones Today: Apple Stock, Walmart Shine
Only a couple of stocks were in positive territory on the Dow Jones Industrial Average.
Apple was clawing out a gain of 0.1%. Walmart fared best, notching a 0.3% advance.
On the downside, insurance play Travelers fell more than 3% and Boeing stumbled nearly 3%.
Elon Musk Twitter Fight Takes Step; Tesla Gains
Tesla CEO Elon Musk is set to start a multiple-day deposition with Twitter's lawyers on Monday.
Musk will field questions on Monday and Tuesday. The grilling could also extend into Wednesday. The Tesla CEO is attempting to back out of a deal to buy the social media company for $54.20 per share.
Musk claims he was misled about the number of spam and bot accounts on the platform. The formal trial begins Oct. 17.
Meanwhile, critics have called for a production halt at Tesla's Giga Berlin factory after a cardboard fire. It took about 50 firefighters to quell the blaze.
Twitter stock was down nearly 2% amid broad market pressure. It has fallen back under its 50-day line.
Tesla stock was off highs for the day but remained positive. It is trying to make up ground on a consolidation pattern with a 314.74 entry.
Earnings have grown an average 173% over the past three quarters, well above CAN SLIM requirements. Annual results are also impressive, with its three-year EPS growth rate coming in at 197%.
Coinbase Stock, RIOT Up As Bitcoin Rallies
A rally in the price of Bitcoin helped cryptocurrency stocks. Bitcoin was up more than 1% and trading just above the $19,000 mark.
Coinbase was given a boost, rising nearly 2%, though volume was light. The stock, which slashed its full-year forecast last month, remains below its major moving averages.
COIN shares are down about 75% since the beginning of the year.
Other cryptocurrency plays also rallied. The Grayscale Bitcoin Trust was up more than 1%, while Bitcoin mining play Riot Blockchain vaulted more than 5%.
Former Leader Planet Fitness Pops
One of the day's top performers was former Leaderboard stock Planet Fitness. It popped more than 2% in high volume.
The budget fitness chain has been hammered by the impacts of Covid-19. But Raymond James sees better times ahead, and upgraded the stock to "Strong Buy" from "Market Perform."
The firm touted the company's "resilient and recession-resistant business model" and expects "healthy growth" next year.
The analyst also said the firm has "no interest rate risk and very little near-term debt maturities" and is well below its historical-average valuation.
However, Planet Fitness has a lot of work to do before it is attractive to CAN SLIM investors. At the moment it is sitting below all of its major moving averages.
Outside Dow Jones: These 2 Stocks Show Strength
J.M. Smucker continues to impress amid a tough market. Its relative strength line once again reached new heights.
This comes as it eyes a cup-with-handle entry at 150, according to MarketSmith analysis. It is clear of its major moving averages.
The packaged-food play is in the top 7% of stocks in terms of price performance over the last 12 months. It is a double threat, as it also offers investors an attractive 2.9% dividend yield.
Chocolate icon Hershey also flexed its muscles, eyeing a 234.66 flat-base entry point. The RS line climbed to a fresh high.
Earnings are a key strength, with Hershey's EPS Rating a healthy 92 out of 99. In total, 43% of its stock is held by funds, according to MarketSmith data.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
