The Dow Jones Industrial Average dived as Russian President Vladimir Putin made military moves on Ukraine amid invasion fears. Home Depot tumbled on results while McDonald's gained amid a spat over how it treats pigs. Tesla closed just below a key benchmark. Krispy Kreme provided crumbs of comfort.
Meanwhile a trio of stocks were flexing their muscles. Commercial Metals, Union Pacific and Dollar Tree all saw their relative strength lines hit new highs.
Volatility rose, with the Cboe Volatility Index, or VIX, rising 3.9%. Volume was also up on both the New York Stock Exchange and the Nasdaq according to early data. Lower volume is preferable when stocks pull back.
Meanwhile, the yield on the benchmark 10-year Treasury note was virtually flat at 1.93%. Oil rose though, with West Texas Intermediate crude rising 1.3%.
Biden Moves As Putin Backs Ukraine Separatists
Stocks were falling as Russian President Vladimir Putin stepped up efforts in Ukraine. He has recognized two rebel-held regions in eastern Ukraine as independent states and ordered troops to move in there.
Putin said they will engage in "peacekeeping," which the U.S. has dismissed as "nonsense" and the "beginning of an invasion."
He also asked Russia's upper house of parliament for authority to deploy armed forces abroad and they voted in favor. This gives him formal permission to send troops into eastern Ukraine. Putin also demanded during a news conference Tuesday that Ukraine not be allowed to join NATO.
President Joe Biden is hitting back economically. He said during a news conference that the U.S. will sanction Russian financial firms, sovereign debt and specific individuals.
Nasdaq Dives As Bears Maul Stock Market
A late rally attempt by the Nasdaq hit the skids as the tech-heavy index closed down 1.2%. NetEase was a big loser here, falling 7.3%
The S&P 500 also toiled, giving up 1%. Best Buy was among the worst laggards, giving up 7.3%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33597.13 | -482.05 | -1.41 |
| S&P 500 | (0S&P5) | 4304.66 | -44.21 | -1.02 |
| Nasdaq | (0NDQC ) | 13381.52 | -166.55 | -1.23 |
| Russell 2000 | 196.66 | -2.81 | -1.41 | |
| IBD 50 | 36.58 | -0.59 | -1.59 | |
Last Update: 4:10 PM ET 2/22/2022 |
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The S&P sectors all gave up ground. Consumer discretionary and energy were the worst performers while real estate and utilities gave up the least ground.
The bears ended up mauling small caps, with the Russell 2000 falling 1.4%.
But it was growth stocks that bled most. The Innovator IBD 50 ETF, a bellwether for growth stocks, fell 1.6%.
Dow Jones Today: Home Depot Falls Hard As McDonalds Stock Gains
The Dow Jones Industrial Average fared worst out of the major indexes, falling for a fourth straight session. It closed near lows as it gave up nearly 500 points, dipping 1.4%.
Home Depot was the worst culprit. The stock knifed more than 8.9% lower in high volume.
The home improvement chain was hit hard despite topping sales and earnings expectations. Same-store sales rose 8.1% for the January-ended quarter. Home Depot also raised its quarterly dividend 15% to $1.90 a share.
It was hit after it guided for EPS growth in the low single digits and "slightly positive" sales growth in the current fiscal year.
McDonald's the top gainer on the Dow Jones today, though it only rose 0.8%. It was up despite famed investor Carl Icahn launching a proxy fight over the firm's treatment of pigs. He is calling for the firm's U.S. suppliers to move to crate-free pork.
Tesla Stock Tumbles
EV leader Tesla was given a bloody nose amid the broad negative action. It closed the day down 4.1%.
Tesla ended the session just below the 200-day moving average. This is a key long-term benchmark.
Tesla has been in the news on multiple fronts lately. Firstly, CEO Elon Musk has accused the Securities and Exchange Commission of trying to "chill" his right to free speech.
Musk took issue with the way the SEC has been overseeing his communications as part of a 2018 settlement over claims he made on Twitter that he could take the EV giant private at $420 per share.
The Ford Mustang Mach-E has also unseated Tesla's Model 3 as Consumer Reports' top EV. The National Highway Traffic Safety Administration also confirmed last week it is probing reports that Tesla's Autopilot software has a glitch that causes so-called phantom braking.
Tesla stock is a member of the prestigious IBD Leaderboard list of leading growth stocks.
Tempur Sealy Stock Plunges
Mattress manufacturer Tempur Sealy was hit hard in afternoon trade. It suffered a metaphorical broken spring as it ended the day down 19.4% in high volume.
It gapped down and saw its relative strength line dip vertically. TPX stock is now down around 38% so far in 2022.
It was hammered after reporting an adjusted 88 cents per share earnings, which badly missed the 96 cents expected by analysts, according to FactSet. Sales of $1.36 billion were also light.
Management said results had been impacted by costs that outpaced sales.
It said operational inefficiencies due to Covid had caused gross margins to fall 1.8%.
Krispy Kreme Stock Up On Taste Of Success
Krispy Kreme made a sweet move on strong results. The doughnut firm closed up 8.4% after posting its first quarterly profit after going public.
It was up even though earnings fell short of Wall Street's expectations. EPS of 8 cents came in a penny light, but revenue of $371 million was better than the $364 million The Street expected.
Investors reacted positively to the fact that the firm had swiftly moved to combat inflation. It raised prices twice in Q4.
Chief Executive Mike Tattersfield said Krispy Kreme and the broader restaurant industry are affected by inflation. However, he believes the company also has pricing power to help reduce the impact.
These Stocks Flex Muscles
It is always a good idea to look out for stocks showing relative strength when the market is struggling. These are likely to fare well when an uptrend kicks into gear.
Commercial Metals saw its relative strength line hit a new high on its weekly chart. It is eyeing a 38.82 buy point after forming a consolidation pattern over the past several weeks.
The recent IBD Stock Of The Day has been moving higher on a strong demand outlook. It is looking to build on strong recent profits, with EPS growing by an average 105% over the past three quarters.
Dollar Tree also saw its RS line spike higher. DLTR stock cleared a 142.48 handle buy point on Friday and now sits just below it.
This is a second-stage base, which means it is more likely to succeed than a third or fourth stage base. The stock had been consolidating for 12 weeks following a breakout from a cup base.
DLTR managed to shake off news that its Family Dollar Store outlets closed in six states due to a rodent infestation at an Arkansas warehouse.
Rail stock Union Pacific is also seeing rising relative strength. The stock, which offers good all-around performance, is sitting below a flat base buy point of 256.21.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
