The Nasdaq composite and Dow Jones Industrial Average faded mild gains from a rally that occurred earlier in Thursday's session. The major indexes all traded sharply lower in afternoon trading as the market correction continues to worsen.
Nasdaq, Dow Jones Both Fade Gains
The major indexes slumped after an attempt to rally earlier this week. On Wednesday, the indexes were hammered and gave back all prior gains from the week. The Nasdaq holds a decline of more than 30% from its prior high, and is on pace to exceed the 2020 pandemic's bear market losses. According to Dow Jones Market Data, the Nasdaq plummeted 30.1% in the Covid crash.
An hour before the close, the Dow Jones industrials traded down 1.5% while the S&P 500 also lost 1.5%. Meanwhile, the small-cap Russell 2000 held a 0.5% loss, outperforming the indexes. The Nasdaq held a loss of 1.5%, on par with its leading index counterparts. According to early data, volume was running higher on the Nasdaq and on the NYSE vs. the same time on Wednesday.
The Innovator IBD 50 ETF, a benchmark for growth stocks, held a loss of around 1.5% and is down nearly 9% this week. It's certainly been an unforgiving market for growth stocks. IBD industry groups leading the upside included several retail-related groups, with the department store group holding a gain of over 5%.
Among S&P 500 sectors, consumer discretionary and technology stocks, which typically move in tandem, moved in opposite directions. Consumer discretionary names led the upside while technology and utilities led the downside.
10-Year Treasury Yield: Lower On Inflation Data
Elsewhere, in the government bond market, the 10-year U.S. Treasury yield fell another 8 basis points, to 2.84%, after falling 7 points on Wednesday and 8 points Tuesday. The yield has been pushed lower following Wednesday's new inflation data. According to the Labor Department, April's consumer price index rose at an annual pace of 8.3%, down vs. the previous month's 8.5%, but higher than economists projected.
Furthermore, the Bureau of Labor Statistics reported Thursday that producer prices at the wholesale level rose 11% over the past year and 0.5% in April alone. This was above the 10.7% estimate by most economists. The producer price index is a measure of pricing strength based on selling prices received by domestic producers for their output.
Disney Misses Earnings, Sales Views
Among Dow Jones Leaders, Disney gapped down and fell nearly 3% to a two-year low after the company missed earnings and sales estimates for its March quarter. Shares are now down over 7% for the week and are below support at important moving averages.
On the positive side, Disney+ subscriber growth blew past estimates. However, Disney warned that Covid-19 continues to impact all operations "depending on local circumstances."
Despite Disney's losses, it was not among the Dow Jones industrials' worst performers. Tech stocks and credit card firms held the lowest rank in terms of price performance Thursday. Apple and Microsoft lost 5% and 4%, respectively.
More Tech Selling In The Dow Jones
Shares of Apple, also a Dow Jones stock, recently broke below the bottom edge of a new base, which means the set-up is no longer in play. Shares have sunk over 11% this week, crashing below their 200-day line support.
Microsoft stock fared slightly better. Shares are only down about 8.7% for the week. But the megacap tech stock still plummeted below its 200-day line in heavier-than-normal volume.
Meanwhile, Visa and American Express lost 3.2% and 5.3%, respectively. Boeing managed to hold the No. 1 losing spot, though, down 6.5%.
Crude oil reversed higher on Wednesday after a sell-off earlier this week put the commodity below $100 per barrel. Today, U.S. crude oil rallied 5.3% to around $105.05 per barrel.
Energy stocks sold off as the Energy Select Sector SPDR lost around 1.4%. The ETF continued to hold support at the 50-day moving average, a positive indicator.
Chevron fell less than 1%. Shares gave back Wednesday's gains and are trying to hold onto support at the 50-day line. The stock is currently forming a flat base with 174.86 entry. Shares remain 6% below the buy point while the RS line is ticking up to new highs ahead of the breakout.
Follow Rachel Fox on Twitter at @IBD_RFox for more Nasdaq and stock market commentary.
