The Dow Jones Industrial Average traded choppily in today's stock market and reversed earlier gains to a loss of around 339 points at the close. The Nasdaq composite and S&P 500 showed similar action. Meanwhile, oil prices continued to rise above its highest levels since October 2014.
Stock Market Today
At the close, the Dow Jones industrials were trading down 1%. The Nasdaq composite was down 1.1% while the S&P 500 declined around 1%. The Russell 2000 small-cap index fell 1.6%, leading the downside. Early data showed volume was running lower on the Nasdaq and on the NYSE vs. the close on Tuesday.
Stocks continued to move lower on Wednesday after Tuesday's market sell-off in heavy volume. IBD's current stock market outlook was downgraded as the Nasdaq's 2.6% decline pulled it below the long-term 200-day moving average for the first time in more than 21 months.
Tuesday's Big Picture column commented that "even though some indexes actually haven't fallen that much from their all-time highs, it's the size of the retreat since the latest follow-through day on Dec. 15 that ultimately tells careful IBD readers that cash is a great position in the portfolio right now."
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 35029.17 | -339.30 | -0.96 |
| S&P 500 | (0S&P5) | 4532.89 | -44.22 | -0.97 |
| Nasdaq | (0NDQC ) | 14340.26 | -166.64 | -1.15 |
| Russell 2000 | 204.45 | -3.38 | -1.63 | |
| IBD 50 | 39.46 | -1.27 | -3.12 | |
Last Update: 4:28 PM ET 1/19/2022 |
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Contrary to its action in recent weeks, the yield on the benchmark 10-year Treasury note declined roughly 4 basis points to 1.82%, after reaching 1.86% on Tuesday. This was the highest level since the start of the pandemic. As the Federal Reserve aggressively moves to counteract the surge in inflation, investors have started selling bonds, which consequently pushes yields higher.
Financial Select Sector SPDR fell 1.7% and is back below a 40.96 buy point it cleared Jan. 7. The ETF is also testing support at its 50-day line. Meanwhile, Technology Select Sector SPDR fell 1.4%, while the growth-focused Innovator IBD 50 ETF sold off 3.2%.
Elsewhere, the price of U.S. crude continued higher, up 1.7% as it neared $87 a barrel. Global oil prices are rising on geopolitical tensions in major oil producers, namely Russia and United Arab Emirates.
Bank Stocks Higher On Earnings
On Wednesday, Morgan Stanley and Bank of America rose after reporting fourth-quarter earnings. Morgan Stanley held a gain of over 1.8% and regained support at its 200-day moving average after dipping below this area on Tuesday. The company beat profit expectations with EPS of $2.01, though revenue of $14.524 billion missed views.
Bank of America pared earlier gains to around 0.4% after the bank beat Q4 profit expectations. Earnings climbed 39% to 82 cents a share. Shares have gained support at their 50-day line and narrowly dodged the 7% to 8% sell zone from a recent 48.79 cup-base buy point.
Dow Jones Today
As for Dow Jones stocks, Proctor & Gamble and Microsoft led the upside with gains of roughly 3.3% and 2%, respectively. Microsoft pared earlier gains to close around 0.2% higher. Procter & Gamble shares were boosted after the consumer goods giant topped analysts' estimates with fourth-quarter earnings of $1.66 a share. Sales rose 6% as price increases accounted for half the quarter's revenue growth.
Meanwhile, Microsoft regained some of Tuesday's losses. The software giant sold off after announcing plans to buy video game company Activision Blizzard. Microsoft is now forming a flat base with a 349.77 buy point but remains 12% away from the proper entry.
The tech stock is also set to report fiscal second-quarter earnings on Jan. 25, after the market closes.
Caterpillar and Boeing led on the downside with losses of 3.6% and 3.5%, respectively. Several blue chip bank stocks also traded lower including JPMorgan and Goldman Sachs, which fell 1.5% and 2%, respectively. Both bank stocks were hit on Tuesday and fell more than 4% each.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
