The stock market plunged Thursday, reversing the prior day's gains as investors seemed to acknowledge that the Fed's actions were not enough. Technology and consumer discretionary stocks were hit hard.
The Nasdaq plunged 5%, and the S&P 500 lost 3.9%. The Dow Jones Industrial Average fell 3.3%. The small-cap Russell 2000 index suffered 4.7%.
Volume rose on the NYSE and Nasdaq compared with the same time on Wednesday.
Tech and consumer discretionary stocks led the selling. Amazon.com fell 7.8% and Tesla dropped 8.5%. Apple lost 5.2%, falling back below its 200-day moving average.
Shopify plunged 17% after first-quarter earnings, revenue and gross merchandise volume missed analyst estimates. The company also announced the acquisition of fulfillment operator Deliverr for $2.1 billion.
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32917.86 | -1143.20 | -3.36 |
| S&P 500 | (0S&P5) | 4132.00 | -168.17 | -3.91 |
| Nasdaq | (0NDQC ) | 12299.30 | -665.56 | -5.13 |
| Russell 2000 | 184.41 | -9.11 | -4.71 | |
| IBD 50 | 31.91 | -1.31 | -3.94 | |
Last Update: 12:08 PM ET 5/5/2022 |
||||
Thursday's action followed the decision by the Federal Reserve to raise interest rates a half point and start shrinking its balance sheet. Fed chief Jerome Powell dismissed the chance of a 75-basis point hike.
Initially, the moves led to a rally in the stock market yesterday. But after having a day to think about the implications of the Fed's moves, the market went back to its downtrend as fears of high inflation and a wage-price spiral eroded market gains.
Yields Rise As Stock Market Reacts To Fed Moves
The yield on the 10-year Treasury note jumped 12 basis points to 3.08%, the highest since early December 2018.
Claims for jobless benefits climbed to 200,000 last week, from 181,000 the previous week. It was a higher number of claims than the 178,000 economists expected, according to Econoday.
Meanwhile, the Organization of Petroleum Exporting Countries on Thursday said it was not boosting output past an already planned modest increase to 432,000 barrels per day for next month. As a result, the price of U.S. crude oil rose more than 1% to $109 a barrel.
Oil stocks Shell and ConocoPhillips edged higher in early trading after both companies reported above-forecast Q1 results. But at midday, Shell was down 0.6% and still within its buy range after a 56.23 flat-base entry
Shell's adjusted earnings rose to $9.1 billion for the quarter, nearly three times the year-ago profit of $3.2 billion. Earnings per share were $2.40, up from 84 cents a year ago. FactSet analysts expected Shell to more than double earnings from the year-ago period to $2.20 a share. Sales were set to pop to $81.456 billion.
Conoco reported adjusted earnings at $3.27 a share on revenue of $19.29 billion, both above views. ConocoPhillips earnings were seen coming in at $3.17 vs. 69 cents a year ago, on sales of $17.321 billion.
Conoco shares also reversed lower and were down 1% at midday after jumping 5% Wednesday. COP stock is still above its 50-day line. A number of top oil stocks are now building bases. Conoco stock could have a proper base with a 107.62 buy point after this week. But market risk is quite high for stock purchases.
Dow Dives As Yields Soar In Delayed Fed Reaction
Fertilizers Fall As Earnings Come In
Nitrogen fertilizer producer CF Industries reversed lower 2% after posting Q1 earnings late Wednesday that missed expectations, despite higher revenue. CF continues to find support at the 10-week moving average.
CF's EPS rose 500% to $4.21, as revenue grew 174% to $2.87 billion. Analysts expected EPS of $4.35 on revenue of $2.59 billion. Higher natural gas feedstock costs likely contributed to the EPS miss, though it was still a 500% increase from a year ago.
Innovator IBD 50 ETF fell 3%.
Silicon Motion was the top performer in the IBD 50 as shares soared 18% and briefly broke through a buy point of 96.99. MaxLinear agreed to acquire the company in a deal valued at about $3.8 billion. The cash and stock deal pays $114.34 per share, MaxLinear said.
Wesco International also briefly climbed above the 141.02 buy point of an uneven pattern in heavy volume. The stock was up 4% at midday Thursday. The supplier of electrical, electronic, communications, security solutions and broadband products beat first-quarter views and raised its 2022 profit guidance.
Tesla CEO Elon Musk strengthened his bid to acquire Twitter by securing financial commitments for about $7.14 billion from 19 investors. Twitter shares jumped 3.4%, rising above the 200-day line.
Follow Michael Molinski on Twitter @IMmolinski
