Dow Jones sells off on SVB Rescue Plan; First Republic crashes 65%
The Dow Jones Industrial Average turned higher on Monday morning, as global markets grappled with the ongoing crisis among US banks. The FDIC and other financial regulators guaranteed all deposits of SVB Finance (SIVB). Regulators on Sunday also took control Signature bank (SBNY). Meanwhile, San Francisco’s First Republic (FRC) crashed 65% in morning trade, despite receiving additional funding from the Federal Reserve and JPMorgan (JPM).
On the economic front, eyes will be on the consumer price index on Tuesday. The CPI is expected to rise by 0.4%, both overall and excluding food and energy. That will bring the headline CPI inflation rate down to 6% from 6.1% in January, with the core inflation rate easing to 5.5% from 5.6%.
The revenue continues to trickle out at the end of the season this week. Among them are Academy sports and outdoor life (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX), Five under (FIVE), GitLab (GTLB) and Lennar (LEN).
The stock market today
The drug giant Pfizer (PFE) agreed to pay $43 billion for biotech Set (SGEN). The Pfizer share rose 0.3 percent, while the SGEN share rose 15 percent.
Leader of genetic screening tools Illumina ( ILMN ) jumped more than 11% early, on news reports that activist investor Carl Icahn planned to nominate three people to the company’s board.
Head of electric vehicles Tesla ( TSLA ) traded down more than 5% Monday morning after Wolfe Research downgraded the stock to peer perform from outperform. Dow Jones technology giants apple (AAPL) and Microsoft (MSFT) was down after the stock market opened.
IBD Leaderboard watchlist stock Palo Alto Networks (PANW) and New relic (NEWR) — as well as the Dow Jones stock Salesforce (CRM) – are among the best stocks to watch in the new stock market correction.
Palo Alto is an IBD Leaderboard Watchlist. New Relic was recently an IBD Stock Of The Day. And Salesforce was featured in last week’s Stocks Near a Buy Zone column.
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Dow Jones today: Oil prices, Treasury yields
After Monday’s market open, the Dow Jones Industrial Average rose 0.2%, and the S&P 500 was down 0.2%. The tech-heavy Nasdaq composite erased heavy losses in morning action, with Seagen and Illumina leading the index.
Among U.S. exchange-traded funds, Nasdaq 100 tracker Invesco QQQ Trust ( QQQ ) fell 0.2% and the SPDR S&P 500 ETF ( SPY ) fell 0.2% early Monday.
The 10-year US Treasury yield fell to 3.69% on Friday. Then on Monday, the 10-year yield plunged to 3.47% in early morning trade, as safe-haven trading drove bonds sharply higher after the SVB collapse. The dollar angled lower and lost ground against the euro and the yen.
Oil prices sold off on Monday morning after Friday’s brief setback. West Texas Intermediate futures tumbled nearly 5% in early trade, trading below $73 a barrel early Monday. Gold and silver also rose sharply as investors sought solid ground. Gold jumped 1.4% to above $1,892 an ounce. Silver rose 3.3%, clearing $21 an ounce.
On Friday, the stock market sold off sharply, as the large share index ended with heavy losses. The Dow Jones Industrial Average fell 1.1%, and the S&P 500 fell 1.45%. The technology-heavy Nasdaq fell 1.8 percent.
Friday’s Big Picture column commented, “IBD changed its market outlook to ‘uptrend under pressure’ on Thursday. And after Friday’s selloff, we’ve cut our outlook further, to ‘market in correction.’ , such as taking profits and cutting losses.”
Now is an important time to read IBD’s The Big Picture column amid the new stock market correction.
Five Dow Jones Stocks to Buy and Watch Now
Dow Jones stocks to watch: Salesforce
In recent weeks, Dow Jones leader Salesforce has shown great upside following strong results for the fourth quarter. But those gains have largely disappeared amid recent market weakness, and now the stock is back below a 178.94 cup-with-handle entry. Still, the stock’s recent strength is a reason to monitor the software leader in the coming sessions. CRM shares rose 0.5% on Monday.
4 top growth stocks to buy and watch Stock correction
Top stocks to watch: Palo Alto, New Relic
IBD Leaderboard Watchlist stock Palo Alto Networks continues to trade quietly in a handle following the stock’s 12.5% gain on Feb. 22. Shares remain within striking distance of a base buy point at 192.94. Bullishly, the stock’s relative strength line is at new highs, as the stock outperforms the market averages. PANW shares were down 0.8% on Monday morning.
Background story: On Feb. 21, the cybersecurity giant announced strong results for the quarter ended in January, with earnings reaching $1.05 per share, up 81% from a year earlier, on a 26% jump in revenue to $1.7 billion.
Recent IBD Stock Of The Day, New Relic, is working on a flat base with a buy point at 80.98 in the wake of the February 8 earnings-driven rally. The RS line holds up for now. The NEWR share fell 1.6 percent on Monday.
Background story: New Relic offers a cloud-based suite of software products that enable organizations to collect, store and analyze vast amounts of data in real time. Customers gain increased visibility into their enterprise software to help make data-driven decisions.
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Shares to watch in the stock market Correction
These are five top stocks to watch in today’s stock market, including two Dow Jones leaders.
|company name||Symbol||Right point of purchase||Type of point of purchase|
|New relic||(NEW)||80.98||Flat base|
|American Express||(AXP)||182.25||Cup with handle|
|Palo Alto Networks||(PANW)||192.94||Cup with handle|
|Salesforce||(CRM)||178.94||Cup with handle|
Source: IBD data as of March 9, 2023
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Tesla shares snapped a four-day losing streak on Friday, with modest gains. It is trying to find support around its key 50-day line and closed Friday around 55% off its 52-week high.
Tesla shares fell 5% on Monday morning, threatening to erase Friday’s gains.
Dow Jones Leaders: Apple, Microsoft
Among the Dow Jones stocks, Apple shares fell 1.4% on Friday, ending a weekly loss of 1.7%. The stock fell 0.2 percent early Monday.
Microsoft shares extended a losing streak to four sessions, falling 1.5% on Friday. The stock is more than 20% off its 52-week high after the latest decline. MSFT shares were down 0.8% on Monday morning.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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Dow Jones Futures fall after SVB Rescue Plan