The Dow Jones Industrial Average extended losses from the prior session after the April jobs report came out. A massive sell-off hit the stock market Thursday after the Federal Reserve's announced its latest decision regarding monetary policy.
Dow Jones Today
A half-point interest rate increase on Wednesday followed by comments from Fed Chairman Jerome Powell led stocks initially higher. But the gains were short-lived. Yesterday, the Dow plummeted over 1,000 points. Meanwhile, the Nasdaq dropped 5% for its worst day since June 2020.
The Dow Jones industrials were down 0.6% after paring earlier losses of over 1%. The Nasdaq sank 0.5% after being down over 2% on Friday. Meanwhile, the S&P 500 declined 0.6%. The small-cap Russell 2000 lost 1.3%. According to IBD data, volume was lower on the Nasdaq and on the NYSE vs. the same time on Thursday.
The market rally attempt is still alive on the S&P 500 and Dow, albeit by a slim margin.
On Thursday, the 10-year Treasury yield surged above 3%, vaulting 15 basis points to 3.07%. This was the highest point since late 2018. The yield was little changed Friday morning and is now approaching an 11-year high of 3.25%.
In economic news, the Labor Department released its April jobs report at 8:30 a.m. ET. Economists expected nonfarm payrolls to rise by 400,000. April's job report showed a better-than-expected 428,000 nonfarm payrolls returned across the U.S. economy last month.
The unemployment rate held steady from March to come in at 3.6%, or just slightly above February 2020's multidecade low of 3.5%.
Stocks To Watch: Lithium Plays
The Innovator IBD 50 ETF, a benchmark for growth stocks, fell 1.3%. While its certainly been an unforgiving market for growth stocks, other niches in the market have shined. Some areas performing well include oil and gas stocks, fertilizers, drugmakers and biotech stocks.
Following booming earnings and guidance from lithium stocks Albemarle and Livent this week, the lithium industry group has made a notable move in response. Lithium is a critical ingredient in electric vehicle batteries.
MP Materials beat first-quarter earnings and sales estimates late Thursday. Earnings jumped 285% to 50 cents a share, beating views by 9 cents. Revenue grew 177% to $166.26 million, exceeding estimates of $137.49 million. The strong results were supported by rising realized prices per metric ton of rare earth oxide, up 37% from Q4 and 135% from a year ago. Production volume grew 6% on the quarter and 10% from a year ago.
Vertex Pharmaceuticals reported mixed earnings Thursday evening. Shares traded at the bottom edge of a buy range after testing support at its 50-day line earlier in the week. The stock briefly became extended from a 255.04 buy point but shares have since pulled back. VRTX is now dipping below its 50-day line, a bearish sign, after gapping down over 3.5%.
Heavy Construction Play Struggles To Break Out
Heavy construction stock Jacobs pared losses of over 2% to break-even and also managed to regain support at its 50-day line. Shares climbed back above a cup-with-handle buy point of 142.10 Wednesday. But on Thursday, the stock fell below the entry, according to MarketSmith. Jacobs shares also dipped below the 200-day line on Friday but managed to reclaim this area as well. Earnings were announced Tuesday and showed EPS of $1.72 per share, on an adjusted basis, topping views for $1.70. Sales of $3.83 billion also beat estimates for $3.77 billion.
The relative strength line is trending upward near highs not seen since June 2021.
Refinery construction is also set to boom as demand for oil picks up. Dallas-based Jacobs provides a diverse range of technical, professional and construction services to industrial, commercial and government clients.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
