The Dow Jones Industrial Average traded lower in today's stock market after briefly trading higher on Friday. The Nasdaq composite and S&P 500 traded near their lows of the day with an hour left in the session; tech stocks led on the downside.
Stock Market Today
Forty-five minutes before the close, the Dow Jones industrials traded down 1.2%. The Nasdaq composite lost 2.4% and the S&P 500 fell 1.7%. Meanwhile, the Russell 2000 small-cap index posted declines of 1.4%. Data showed volume was running higher on the Nasdaq and on the NYSE vs. the same time on Thursday, a bearish sign for CAN SLIM investors.
The growth-focused Innovator IBD 50 ETF lost 1.8% on Friday as shares continued to fall below the 200-day line.
The major indexes are on track to close significantly lower for the week. On Tuesday, IBD changed the market outlook to "correction" as the indexes moved to violate key areas of support.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 34426.03 | -289.36 | -0.83 |
| S&P 500 | (0S&P5) | 4424.85 | -57.88 | -1.29 |
| Nasdaq | (0NDQC ) | 13896.36 | -257.66 | -1.82 |
| Russell 2000 | 198.94 | -1.81 | -0.90 | |
| IBD 50 | 37.95 | -0.69 | -1.79 | |
Last Update: 2:58 PM ET 1/21/2022 |
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Given current market conditions, investors should be taking a defensive position and swiftly raising cash. Now is not the time to be aggressively buying stocks, but market engagement is still key.
Be sure to watch the indexes daily for signs of support and accumulation.
This Investor's Corner highlights the importance of building a watchlist as the market works through its current correction.
Meanwhile, investors are turning their attention to the Fed's next policy-setting meeting, which takes place next week. The meeting could result in the Fed's first interest-rate hike of 2022, which poses a potential threat to the overall market. Economists expect the first interest rate hike in early March.
Elsewhere, several major tech stocks, including Apple, undercut key moving averages this week. The iPhone maker sank further below its 1o-week line, an important level of support, and is on track to close below it.
Apple shares remain extended from a recent 153.26 buy point.
Alphabet inched below its 200-day moving average for the first time since September 2020 while Tesla extended losses below its key 1,000 level, a potential support area.
Both Tesla and Apple report earnings next week, while Google is set to report on Feb. 1.
Netflix Falls On Earnings
Netflix gapped down and cratered over 22% after reporting fourth-quarter earnings late Thursday. Despite beating both top and bottom-line expectations, Netflix shares plummeted to its lowest level since April of 2020. Investors were disappointed that Netflix only added 8.28 million global paid net subscribers, falling below the streaming giant's expected 8.5 million net subscriber gain.
According to Refinitiv, the company earned $1.33 a share, beating estimates for 82 cents a share. Netflix reported $7.71 billion in sales, exactly in line with estimates.
Dow Jones Today
Among Dow Jones stocks, Walt Disney and Boeing led the downside with losses of 6.7% and 3.2%, respectively. Disney stock fell in sympathy with Netflix's gigantic losses. Meanwhile, other streaming stocks such as Roku and Amazon also traded lower.
Meanwhile, McDonald's and Nike outperformed with gains of 1% and 0.8%, respectively. On Thursday, McDonald's announced it would roll out a test of plant-based burger maker Beyond Meat's burgers in 600 stores across the San Francisco and Dallas-Forth Worth areas starting Feb. 14.
Beyond Meat at one point rose 2% on Friday but is historically quite beaten down at this time. Shares have been trading below the 21-day line since last July. McDonald's is set to report earnings next week on Jan. 27.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
