The Dow Jones Industrial Average remained significantly lower after the hot inflation data. Twitter stock rose after shareholders voted on the offer You’re here (TSLA) CEO Elon Musk to buy the company. Coinbase (CURRENCY) and Riot Blockchain (RIOT) sank when Bitcoin melted. Apple (AAPL) dove.
With the market under pressure, investors should look for bottom-forming stocks that could provide good opportunities when the market improves. CMS Energy (CMS) and Comstock Resources (CRK) are strong examples.
Volume was up on the Nasdaq and the New York Stock Exchange from the same time Monday. It’s a bad sign on a low day.
The yield on the benchmark 10-year Treasury note rose seven basis points to 3.43%. West Texas Intermediate crude oil fell nearly 3% to over $85 a barrel, although it rebounded early in the afternoon.
Inflation data is hurting the stock market
Stocks in general fell after the consumer price index showed prices rose 0.1% in August from the previous month. This turned out to be hotter than estimates for a monthly decline of 0.1%. Inflation rose 8.3% in August compared to a year ago, which is higher than the expected increase of 8.1%.
The move saw Nomura call for a 100 base rate hike at the Federal Reserve’s Open Market Committee meeting in September. He had previously forecast a 75 basis point hike. It also expects a terminal rate of 4.50% to 4.75% by February 2023.
“The Fed will likely have to be even more aggressive with the rate hike and that’s bad news for risky assets,” Edward Moya, senior market analyst at Oanda, said in a note to clients.
Nasdaq slammed as small cap struggle
The Nasdaq was the most struggling among the major indexes. It fell almost 4% and was near the lows of the day.
The S&P 500 also struggled, slipping almost 3%. Albemarle (ALB) was a bright spot as it gained nearly 3%.
The S&P 500 sectors were all negative, with Technology and Communication Services being the worst performers. Energy gave the least ground.
Small caps also took a beating from the bears, with the Russell 2000 lower by more than 3%.
The Innovator IBD 50 ETF (FFTY), a benchmark for growth stocks, also fell around 2%.
Dow Jones Today: Apple Stock Reverses Sharply
The Dow Jones Industrial Average suffered, plunging more than 800 points, or 2.5%.
Aggressive investors who invested in Apple shares spoiled the decision after it fell almost 5%. It had been the best performer in the previous session, but has now fallen back below its 50- and 200-day moving averages.
AAPL stock also lost ground on an aggressive trendline entry and a handle entry of 176.25.
But Apple’s losses weren’t as big as those of Boeing (BA). The aerospace giant was the worst performing industrialist on the Dow Jones today, falling more than 5%.
Twitter shares gain ahead of Elon Musk vote
Twitter shareholders voted on Tuesday to approve Elon Musk’s takeover bid despite the fact that he is currently trying to walk away from the deal.
The social media company slammed the eccentric executive’s latest attempt to sabotage the $44 billion deal.
While Musk claimed that a $7.75 million severance package to whistleblower Peiter Zatko is a violation of the takeover deal, the company said its latest letter regarding the takeover deal termination was “invalid and wrongful”.
Twitter stock rose about 2% and moved away from its 50-day line.
You’re here Stock was significantly lower. It fell almost 4%, losing ground from a short buy point of 314.74. It has now fallen back below its 200-day moving average, according to MarketSmith analysis.
Coinbase Stock, RIOT Plunges as Bitcoin Bottoms
Coinbase was near the day’s lows as it plunged more than 6%. The volume was lighter, a mere crumb of comfort.
The stock, which cut its full-year forecast last month, managed to hold above the 21-day exponential moving average and its 50-day line. COIN shares have fallen nearly 70% since the start of the year.
Bitcoin plunged as risky assets struggled. It fell back below $21,000 after dropping more than 6% in the past 24 hours, according to CoinDesk.
Other cryptocurrency games also fell sharply. Grayscale Bitcoin Trust (GBTC) Falls Nearly 9% As Bitcoin Mining Plays Riot Blockchain (RIOT) plunged 7%.
Outside of Dow Jones: These 2 stocks Eye Buy Points
Utilities stock CMS Energy is showing relative strength as it targets a handle entry of 71.29. CMS is in the top 15% of stocks by price performance over the past 12 months. Big Money is also behind the title, with its accumulation/distribution rating reaching a solid B-.
CMS energy offers a dividend yield of 2.7%.
Comstock Resources form tumbler base with handle. He is aiming for a buy point of 21.28. It is back above the 21-day exponential moving average, an encouraging sign.
The oil and gas explorer is a member of the IBD Industry Leaders list. It’s our toughest and most powerful display.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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