The Dow Jones Industrial Average took a dive as the broader stock market plunged on rising Treasury long bond yields. Microsoft was bludgeoned lower as it unveiled a bumper deal to buy Activision Blizzard. Goldman Sachs was the worst blue chip as it plunged on earnings.
It was not all bad news, however. Oil stocks were gushing higher as energy prices rose, with a trio of stocks staging breakouts. Occidental Petroleum, Royal Dutch Shell, Cactus all passed key buy points.
Stocks were given a stiff spanking by the bears after the yield on the benchmark 10-year Treasury note rose more than 9 basis points to 1.87%. This is the highest level since the start of the pandemic. Bonds prices move in the opposite direction to yields, which suggests investors are bailing out of the asset class as the Fed moves to smother surging inflation.
Nasdaq Slammed; Growth Stocks Suffer Most
The tech-heavy Nasdaq lagged worst out of the major indexes, falling around 2%. Moderna and Applied Materials were the worst laggards, both falling more than 7%
The S&P 500 also struggled, dropping about 1.4%. Gap was among the laggards here as retail stocks suffered.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35513.20 | -398.61 | -1.11 |
| S&P 500 | (0S&P5) | 4602.39 | -60.46 | -1.30 |
| Nasdaq | (0NDQC ) | 14627.57 | -266.18 | -1.79 |
| Russell 2000 | 210.57 | -3.74 | -1.75 | |
| IBD 50 | 41.20 | -1.24 | -2.92 | |
Last Update: 2:56 PM ET 1/18/2022 |
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The S&P sectors were nearly all falling. Energy was the lone area making a gain. Technology and financials were suffering the most.
Small caps were also being punished. The Russell 2000 dove 1.8%.
But growth stocks got the worst mauling by the bears. The Innovator IBD 50 ETF, a bellwether for growth stocks, plunged nearly 4%.
Dow Jones Today: Goldman Sachs Stock Drags Index Lower
The Dow Jones Industrial Average fell more than 1%. Goldman Sachs was by far the worst laggard, dipping around 7%. This caused GS stock to lose further ground on the 200-day moving average. While slightly off lows, it is trading at its lowest price since June.
The investment bank missed earnings expectations Q4 and is the latest big bank to fall after reporting earnings.
JPMorgan Chase, which reported last week, also lagged, dropping more than 4%.
Upside action was limited, with Visa the best gainer. It rose less than 1%. Boeing also inched higher.
Microsoft Stock Dips On Activision Deal
Microsoft took a tumble on the news it has struck a deal to buy Activision Blizzard for $68.7 billion in cash.
The cloud computing, business software and video game hardware titan claims the deal will speed up the growth of its gaming business across mobile, PC, console and cloud. It also said it will provide building blocks for the metaverse.
Microsoft stock, a member of the prestigious IBD Leaderboard, lost further ground on the key 50-day moving average.
The stock is now trading at the bottom of a potential flat base. MSFT is shooting for a potential entry of 349.77. This could evolve into another kind of base.
ATVI stock spiked, but the market is pricing in the possibility that the move may fail to clear regulatory scrutiny. Reason? It is trading solidly below the $95 in cash per share Microsoft said it will pay for Santa Monica, Calif.-based Activision.
Techs, Small Caps Lead Fierce Selling; Apple Among Six Holdouts
Oil Gushes Higher, These Stock Test Buy Points
Energy stocks were powering higher amid rising prices. West Texas Intermediate crude oil prices were up more than 1%. The price of a barrel is now in excess of $85.
Occidental Petroleum is trading just under its buy zone after early breaking out of a cup-without-handle base. The ideal buy point here is 35.85.
The stock is seeing its relative strength line spike. Big money has also been snapping up the stock of late.
Royal Dutch Shell also managed to clear a cup base. It is trading a hair below its entry of 50.85.
Cactus rose above the 47.04 buy point of another cup base in heavy trading. Its RS line has hit a new high, an encouraging development.
The stock is slightly different to the other two names. It designs, manufactures, sells and rents wellheads and pressure control equipment.
Meanwhile, Vanguard Energy Index Fund ETF held a 0.4% gain headed into the final hour of trading. And it boasts a gain of more than 16% so far this year.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
