Dow Jones Rally on Key Inflation Report; First Republic jumps 62% on allaying banking fears

The Dow Jones Industrial Average gained more than 300 points Tuesday morning as a key inflation report and rebound in financials bolstered early trade. Regional bank in difficulty First Republic (FRC) rebounded as much as 62% in morning action as federal measures to ease banking fears appeared effective after Monday’s plunge.


The SPDR S&P Regional Banking (KRE) ETF jumped more than 10% on Tuesday, rebounding from Monday’s 12% drop. Key Corp (KEY) rose nearly 20%, while western alliance (WAL) catapulted 45% higher. Finally, Charles Schwab (SCW) rebounded 14% in early morning trading.

CPI Inflation Report

Wall Street suddenly sees a good chance that the Federal Reserve will suspend its rate hike campaign at next week’s meeting, with the failure of three banks fueling concerns about broader financial sector strains.

This could reduce the recent prominence of the consumer price index, which rose 0.4% in February, in line with expectations. Core CPI rose 0.5% in February, above the estimate of 0.4%. The headline CPI inflation rate reached 6.0%, in line with estimates, with the core inflation rate also reaching estimates at 5.5%.

But almost regardless of the CPI’s result, half-point moves now seem to be out of place. And that’s just a week after Fed Chairman Jerome Powell signaled that policymakers were ready to reaccelerate rate hikes at next week’s meeting from the pace of a quarter of a year. point of February.

Bank failures prompted a rush into bonds and other safe havens, causing Treasury yields to fall sharply and signaling growing doubts about the strength of the economy. Even if the Fed doesn’t take a break next week, markets now seem to be betting that rate cuts are imminent.

On the earnings side, GitLab (GTLB) fell 30% in early trade after the company’s weaker-than-expected revenue forecast.

Earnings continue to flow as the season ends this week. Among them are Academy Sports and Outdoors (ASO), Adobe (ADBE), General dollar (DG), fedex (FDX), five below (FIVE) and Lennar (LEN).

stock market today

United Airlines (UAL) fell 3% after the company said it expected a quarterly loss in the first quarter.

Leader in electric vehicles You’re here (TSLA) rose 4% on Tuesday morning after positive recording data from China. Meanwhile, tech giants Dow Jones Apple (AAPL) and Microsoft (MSFT) were higher after the stock market opened.

Social Media Giant Metaplatforms (META), IBD Ranking Watchlist Stock Palo Alto Networks (PANW) and New relic (NEWR) – as well as Dow Jones stocks Nike (OF) and Selling power (CRM) – are among the top stocks to watch in the ongoing stock market correction.

Palo Alto is an IBD Leaderboard watchlist stock. New Relic was recently an IBD Stock of the Day. And Nike was featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Price, Treasury Yields

After Tuesday’s opening bell, the Dow Jones Industrial Average was up 1% and the S&P 500 was up 1.5%. The tech-heavy Nasdaq composite gained 1.9% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 1.9% and the SPDR S&P 500 ETF (SPY) rose 1.5% early Tuesday.

The 10-year U.S. Treasury yield plunged to 3.51% on Monday as safe-haven trading pushed bonds higher following the collapse of Silicon Valley Bank. Then on Tuesday, the 10-year Treasury yield rebounded to 3.59% in morning trading.

Oil prices continued to fall early Tuesday after Monday’s steep losses. West Texas Intermediate futures fell 2.5%, trading just below $73 a barrel.

Stock market correction

On Monday, the Dow Jones Industrial Average fell 0.3% and the S&P 500 lost 0.15%. The tech-heavy Nasdaq composite climbed 0.45% in a volatile trading day.

Monday’s Big Picture column commented: “The S&P 500 slipped more than 1% in early trading, but rebounded to close less than 0.2% lower. The index found support around 3 800, where buyers also came in during the December market slump.”

Now is an important time to read IBD’s The Big Picture column amid the renewed stock market correction.

Five Dow Jones Stocks to Buy and Watch Now

Dow Jones stocks to watch: Nike, Salesforce

Since the Oct. 3 low, Nike shares are up 59% to their recent high at 131.31. Now the stock is consolidating within a flat base that offers a buy point of 131.41, according to IBD MarketSmith pattern recognition. NKE stock rose 1.25% early Tuesday.

Amid recent weakness, the stock is below its 50-day moving average, a key benchmark. A decisive rally would be bullish for the basic construction outlook, sculpting the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.

Over the past few weeks, Dow Jones leader Salesforce has shown great upward strength after strong fourth quarter results. But those gains have mostly faded amid recent market weakness, and now the stock is back below a 178.94 cup entry with a handle. Still, the stock’s recent strength is reason to watch the software leader in upcoming sessions. CRM stock rose 2.5% on Tuesday.

3 top growth stocks to watch in the Stock market correction

Top stocks to watch: Meta, Palo Alto, New Relic

Meta Platforms, Facebook’s parent company, is quietly building a flat base with a buy point of 197.26 after an earnings-fueled price surge in February. Stocks are around 8% away from the last buying point, as they rose 0.8% on Monday. Meta shares rose 4.5% on Tuesday morning.

Pass: Like its social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as customers struggle due to macroeconomic concerns, recession fears and rising interest rates. It comes as he spends billions on a gamble to build the “metaverse”, a virtual reality world that has yet to take root.

Watchlist IBD Leaderboard Palo Alto Networks stock continues to trade quietly in a handful after the stock rose 12.5% ​​on Feb. 22. Stocks remain within striking distance of the 192.94 one-basis buy point. On the upside, the stock’s relative strength line hits new highs, with the stock significantly outperforming market averages. PANW stock traded down 0.2% on Tuesday.

Pass: On February 21, the cybersecurity giant announced strong results for the quarter ended January, which saw earnings hit $1.05 per share, up 81% from a year earlier, with an increase 26% of its revenue to $1.7 billion.

The recent IBD Stock Of The Day, New Relic, is working on a flat basis with a buy point of 80.98 following the February 8 earnings fueled surge. The RS line is holding up for now. NEWR stock rose 1.5% early Tuesday.

Pass: New Relic provides a suite of cloud-based software products that enables organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help them make data-driven decisions.

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Stocks to watch in the stock market correction

These are four stocks to watch in today’s stock market, including two leaders from the Dow Jones.

Company Name Symbol Correct point of purchase Point of purchase type
New relic (NEW) 80.98 Flat bottom
Nike (of) 131.41 Mug with handle
Palo Alto Networks (PANW) 192.94 Mug with handle
Selling power (RCMP) 178.94 Mug with handle
Source: IBD data as of March 13, 2023

Join IBD experts as they analyze the top stocks of the current market correction on IBD Live

Tesla Stock

Tesla stock rose 0.6% on Monday as it continues to see some support around its 50-day moving average. Shares closed Monday about 55% off their 52-week high.

TSLA stock rose 4% on Tuesday morning, looking to add to Monday’s gains.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, shares of Apple rose 1.3% on Monday, ending a two-day losing streak and finding support at the long-term 200-day line. AAPL gained 1.3% Tuesday morning.

Microsoft shares recovered to the upside of their 200-day line on Monday’s 2.1% jump. The stock is still around 20% off its 52-week high after recent declines. MSFT stock rose 1.5% early Tuesday.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


Top growth stocks to buy and watch

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