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Dow Jones Today, Stocks Slump; September Hiring Climbs; Bitcoin Rallies; Palantir, Acuity Soar


Stocks saw early losses worsen on Wednesday, as markets in Europe shifted sharply lower and oil prices slipped from their highest level in seven years ahead of inventories data. Bitcoin rallied nearly 7%. Acuity Brands (AYI) gained after a strong fiscal fourth-quarter report. But steel and airline stocks tumbled on analyst downgrades, and chemical maker Dow (BA) led the declines on the Dow Jones today.


The Dow Jones Industrial Average dug a 450-point ditch, down 1.3% in early trade. The S&P 500 also carved a 1.3% loss. The Nasdaq Composite shed 1.2% on the stock market today, with CDW (CDW) leading the declines, following a downgrade from Morgan Stanley.

American Airlines (AAL) dropped 4.6% and JetBlue (JBLU) slumped 5.4%, after downgrades from Goldman Sachs. Steelmakers also earned Goldman downgrades, with U.S. Steel (X) tumbling 7.4% and Nucor (NUE) off 3.2%.

Data privacy services provider Palantir (PLTR) surged more than 4% after inking a $823 million contract with the U.S. Army.

Some software stocks showed early strength, with Okta (OKTA) and DocuSign (DOCS) up more than 2%, and Crowdstrike Holdings (CRWD) posting a 1.8% gain.

Commercial lighting products manufacturer Acuity Brands (AYI) swept nearly 13% higher, leading the S&P 500, after reporting a strong fiscal fourth-quarter earnings beat. Revenue also cleared targets, and the company reported that price increases compensated for rising costs. The gain lifted Acuity stock back above 10-week support in a 22-week consolidation.

IBD 50 stocks to watch on Wednesday include Western Alliance Bancorp (WAL), Diamondback Energy (FANG) and Stifel Financial (SF). Callon Petroleum (CPE) dived 6.2% to the bottom of the IBD 50 list.

Dow Jones Today: Goldman, Microsoft Bases

Specialty chemical producer Dow dropped 2.1% to pace the downside among blue chips. Walmart was the Dow’s sole advancer in early trade, rising 0.3%.

Goldman Sachs and Microsoft will be stocks to watch on the Dow Jones today, after leading yesterday’s rebound among the industrials. Microsoft stock, an IBD Leaderboard listing, has now consolidated for seven weeks. The result is an 8%-deep flat base with an entry at 305.94. Microsoft is up 10% from a June breakout.

Goldman’s six-week consolidation also qualifies as a flat base. Its pullback looks more severe than Microsoft’s, but is only 11% deep. It undercut a prior buy point, but stopped well short of the automatic sell rule. Shares have a year-to-date gain of more than 46%.

Europe Stocks Tank; September Hiring Rebounds

Europe’s markets pared some losses in afternoon trade, hurt in early trade by weak manufacturing data and as a key U.K. inflation forecast rose to a 13-year high. Frankfurt’s DAX eased to a 1.6% loss. The CAC-40 in Paris dropped 1.6%, while the FTSE 100 in London slumped 1.1%. In Japan, Tokyo’s Nikkei 225 closed 1.1% lower. Hong Kong’s Hang Seng Index slipped 0.6%. The Shanghai Stock Exchange remains closed on the final day of its National Day holiday.

In early economic news, the Mortgage Bankers Association reported mortgage applications down 7% last week. Refinance activity fell 10%, to its lowest level in three months.

The ADP Employment report estimated private payrolls rose by 568,000 in September vs. estimates of 428,000. It’s also up from revised 340,000 in August. The leisure and hospitality sector did the most hiring, adding 226,000 workers. Manufacturing added 49,000 new employees, while trade, transportation and utilities expanded payrolls by 54,000 jobs.

The Energy Information Administration’s weekly oil inventory data is due for release at 10:30 a.m. ET.

Vital Signs: Oil, NatGas, Bond Yields, Bitcoin

West Texas Intermediate crude futures slipped 1.3% early Wednesday to trade just below $77.90 a barrel. U.S. oil prices are now working on the seventh week of a rally that has lifted them to their highest level since November 2014.

Natural gas futures reversed early gains and dropped 7.6% to $5.83 per million British thermal units. Shortages driving price spikes in Europe have led U.S. natural gas into the seventh month of its rally, up 148% through Tuesday since Dec. 31, and at its highest level since December 2008.

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Bond yields ticked higher, with the 10-year Treasury yield up one basis point to 1.54%. Yields hit their low at just below 1.13% in July. They touched this year’s high, above 1.76%, in March.

Bitcoin bounced more than 5% to trade just below $52,800. The cryptocurrency swung as high as $52,797 and as low as $49,624 over the past 24 hours.

IBD 50: Western Alliance, Diamondback, Stifel

Among IBD 50 stocks, Western Alliance Bancorp is hovering near a 109.94 entry in a 22-week cup base. Diamondback Energy is holding in a buy range above a 102.63 cup base entry. Stifel Financial was less than 1% below a 71 buy point in a 22-week cup-with-handle base.

Taskus (TASK) is testing the 10-week moving average. Datadog (DDOG), which was mentioned in an earlier Stock Market Today update, is already rebounding from the 10-week line. Datadog is an IBD Leaderboard listing.

In addition, research leader Gartner (IT) is rebounding from its 50-day line. Medical devices and supplies vendor Avantor (AVTR) is also positioned for a possible rebound from support.

With the market in correction, these stocks are all watchlist candidates. Until the market forms a bottom and confirms a fresh uptrend with a follow-through day, investors should be shying away from new purchases.

Nasdaq, S&P 500, Dow Jones Today

The Dow Jones today is holding above a low sketched out on Friday, and appears set to continue a back and forth trading trend. Tuesday’s rally briefly topped the index’s short-term 10-day moving average.

The index has traded for short periods above its 10-day moving average in every session since Sept. 28. But it has been unable to clock a daily close above that level. A move above that indicator could suggest a shift in the market mood.

In terms of longer-term support, the Dow now has four weekly closes below its 50-day moving average. That is its longest retreat below that level of support since March and April 2020.

For more detailed analysis of the current stock market and its status, study the Big Picture.

The S&P 500 also is holding just below its 10-day line, after scratching off a new low on Monday. Monday’s lows for the Nasdaq composite and S&P 500 could be the beginnings of a bottom to the market’s current pullback. Bottoms eventually can lead to new uptrends, but this process takes at least several days to take shape.

One resilient element of the market’s recent pullback has been small caps. The S&P Smallcap 600 continues to trade above its 50-day moving average, after rebounding from a test of its 200-day line on Sept. 22. The Russell 2000 is slightly more sloppy, but continues to trade tight to its converged 50-day and 200-day averages. And the Russell is trading just 3.5% off its early September highs, vs. a 4.4% pullback for the S&P 500, and a 6.2% drop for the Nasdaq.

Please follow Alan R. Elliott on Twitter @IBD_Aelliott


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