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The Dow Jones Industrial Average undercut a key level as stocks suffered a Fed hangover. Tesla (TLSA) dived after CEO Elon Musk made a Twitter (TWTR) move. Apple (AAPL) and Nike (NKE) were big blue chip losers.
A trio of stocks stood out by continuing to build bullish bases despite the negative action. Meridian Biosciences (VIVO), Nordstrom (JWN) and Johnson & Johnson (JNJ) are potential watchlist candidates.
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Volume was higher on both the Nasdaq and the New York Stock Exchange, according to preliminary data. This is a negative on a down day.
Meanwhile, the yield on the benchmark 10-year Treasury note skidded 15 basis points to 3.24%. West Texas Intermediate crude oil rose more than 1% to trade at just under $117 per barrel.
Nasdaq Plunges As Bears Maul Small Caps
Indexes were smacked down as Wednesday’s Fed meeting gains evaporated. With stagflation worries rising it was a tough environment for securities.
The tech-heavy Nasdaq ended the day down 4.1%. Lucid Motors (LCID) plunged, dropping more than 11%.
The S&P 500 dipped 3.2%. Cruise lines stocks sank, with Norwegian Cruise Line (NCLH) and Carnival (CCL) both plunging more than 11%.
The S&P 500 sectors were all negative. Technology, energy and consumer discretionary suffered most. Consumer staples and health care gave up the least ground.
The hungry bears feasted on small caps. The Russell 2000 fell 5.1%.
Growth stocks were also given a drubbing. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, ended the session down 5.8%.
Dow Jones Today: Apple Stock Slammed
The Dow Jones Industrial Average also plummeted, shedding more than 700 points as it closed down 2.4%. It fell below the key 30,000 level.
Apple stock was one of the worst performers, giving up 4%. It now sits about 15% below its 50-day moving average, according to MarketSmith analysis.
But it was sportswear giant Nike and American Express (AXP) that suffered most on the Dow Jones today. Both fell nearly 6%.
Walmart (WMT) was one of the few gainers, though it was only up 1%.
Elon Musk Makes Twitter Move; Tesla Stock Dives
Tesla stock dived after CEO Elon Musk held a meeting with Twitter employees Thursday.
The eccentric executive paved the way for possible layoffs when he told workers that “costs exceed revenue. That’s not a great situation.”
He also told them that he has a strong bias toward in-person rather than remote work, indicating he would prefer them to work in the office, rather than at home.
Musk also underscored his dedication to free speech, though he said this does not mean Twitter should actively promote it.
Uncertainty surrounds Musk’s mooted $44 billion takeover bid for the company.
The Tesla chief previously said the deal is “on hold” as he waits to learn about the number of bots and fake accounts on the social media platform.
Twitter stock whipsawed but ultimately ended the day lower. It gave up 1.7%. It remains rooted below its major moving averages.
Tesla stock wiped billions off its market cap as it closed down nearly 8.5%. The former Leaderboard stock now sits more than 20% below its 50-day moving average.
TSLA is back toward the lows of its current consolidation. It is now even further adrift of its potential entry of 1,208.10, MarketSmith analysis shows.
Outside Dow Jones: 3 Stocks Build Bases
With the market in the grip of a correction now is the time to beef up watchlists. Here are a few candidates.
Meridian Biosciences has been building a cup base with 28.82 buy point since April, according to MarketSmith analysis.
The stock is now testing support at the conjoined 50-day and 21-day moving averages. The fact that its relative strength line is near highs is encouraging.
The firm develops products for viral and infectious diseases. Big Money has been snapping up the stock of late as it displays good all-around performance.
Department store play Nordstrom has formed a new cup base. The ideal buy point here is 29.69.
On a daily chart, a handle on the cup also appears to be forming. The light pullback in recent days creates a lower entry point at 27.82.
The stock got a boost after it announced earnings on May 24, leading it to jump more than 16% in heavy volume on a weekly chart. The firm raised its full-year outlook even as most retailers cut annual forecasts amid higher supply chain costs.
It is testing support just below the converged 200-day and 50-day lines. It remains in the upper half of its consolidation though.
JNJ stock is forming a flat base with an ideal entry of 186.79 for now. The RS line has just hit another fresh high.
Shares have been finding support at the 200-day line. If it can rebound and clear the 50-moving average it will be a good sign.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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