Dow Rallies, Tech Stocks Tumble As Treasury Yields Jump Ahead Of Fed Decision; Plug Power Dives, Tesla Skids
The Dow Jones Industrial Average turned higher after brief losses Wednesday, while tech stocks tumbled as Treasury yields jumped ahead of the Fed’s policy announcement. Plug Power dived on accounting issues, while Tesla stock briefly reversed higher. CrowdStrike and Pinduoduo reported earnings ahead of the open.
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Among the Dow Jones leaders, Apple (AAPL) fell 2% Wednesday, while Microsoft (MSFT) moved down nearly 1% in today’s stock market. Nike (NKE) is approaching a new buy point.
Tesla (TSLA) dropped more than 3% in morning trade Wednesday before briefly reversing higher, while Plug Power (PLUG) dived 13% on accounting issues. CrowdStrike (CRWD) rose and Pinduoduo (PDD) fell after reporting earnings ahead of the stock market open.
Among the top stocks to watch, Applied Materials (AMAT) and Hain Celestial (HAIN) are in or near buy zones in the new stock market rally.
Microsoft and Tesla are IBD Leaderboard stocks. Applied Materials is a recent addition to IBD SwingTrader, while Hain Celestial was featured in this week’s Stocks Near A Buy Zone column.
Dow Jones Today: Fed Meeting, Treasury Yields
The Dow Jones Industrial Average moved up 0.35% after briefly turning negative, while the S&P 500 fell 0.5%. The tech-heavy Nasdaq composite tumbled 1.4% in morning trade after paring some losses.
The Federal Reserve will announce its policy decision at 2 p.m. ET. Investors will be looking for clarity from the central bank and Fed Chief Jerome Powell regarding inflation and rising Treasury yields.
The 10-year Treasury yield jumped to 1.685%, hitting a 13-month high.
Among exchange traded funds, the Innovator IBD 50 (FFTY) traded down 1.2% Wednesday. Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) fell 0.8%. Meanwhile, the SPDR S&P 500 ETF (SPY) moved down 0.4%.
Stock Market Rally: Nasdaq Faces Key Test
Amid a new stock market rally, the Dow Jones Industrial Average made more record highs Monday, while the S&P 500 notched all-time highs Tuesday.
Meanwhile, the tech-heavy Nasdaq is right at its 50-day moving average line and about 5% off its all-time highs. The Nasdaq will need to overcome this key hurdle in order to maintain its upward trajectory. The 50-day line is a critical potential resistance level. If the Nasdaq decisively clears it, then new highs could be on the horizon.
IBD’s market outlook was upgraded to “confirmed uptrend” on March 10, as the Dow Jones Industrial Average set new highs.
Tuesday’s Big Picture commented, “U.S. stocks faded Tuesday, as investors braced for what could be one of the most important Fed meetings of the coronavirus pandemic.”
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Bitcoin Price
Bitcoin briefly topped $61,000 over the weekend to hit an all-time high before tumbling Monday. The price of Bitcoin touched its high-water mark on Saturday, topping out at $61,556.
The price of Bitcoin traded around $55,300 early Wednesday, according to CoinDesk.
The Grayscale Bitcoin Trust (GBTC) ETF advanced more than 14% last week, continuing to climb from its 10-week line. GBTC lost 2% Wednesday.
Dow Jones Stocks: Nike
Inside the Dow Jones Industrial Average, Nike stock is approaching a 148.05 buy point in a flat base, according to IBD MarketSmith chart analysis.
Shares are about 2% away from their buy point amid Wednesday’s 0.5% gain.
Stocks To Watch: Applied Materials, Hain
IBD SwingTrader stock Applied Materials is close to completing a new base, which would offer a 124.60 buy point. Meanwhile, the stock is rebounding from its key 50-day line after testing that level on March 8.
According to IBD Stock Checkup, AMAT stock boasts a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
Shares dipped 0.2% Wednesday.
Friday’s IBD Stock Of The Day, Hain Celestial, is trying to break out past a 45.52 buy point in a flat base. Shares briefly topped the entry Tuesday before closing below it. The stock fell nearly 1% Wednesday morning.
Stock Market Earnings: CrowdStrike, Pinduoduo
Cybersecurity leader CrowdStrike rallied over 2% after the company swung to a profit during its fiscal 2021 fourth quarter and topped views, while revenue also beat Wall Street estimates. CrowdStrike also reported full-year 2022 revenue guidance ahead of expectations.
CrowdStrike stock is about 20% off its 52-week high and below its 50-day line.
Chinese leader Pinduoduo tumbled 8% after the company missed Q4 earnings targets. Shares are more than 30% off their 52-week high.
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Plug Power Stock
Plug Power stock dived 13% Wednesday morning after the company said it restate 2018 and 2019 financial statements, as well as quarterly statements for 2019 and 2020 due to accounting errors related to noncash items.
PLUG stock ended Tuesday more than 40% off its 52-week high and sharply below its 10-week moving average.
Tesla Stock
Tesla stock skidded more than 3% Wednesday morning, threatening to add to Tuesday’s 4.4% loss before briefly reversing higher in morning trade. Tesla fell 0.5% midday. Shares could be forming a new base, but it’s too early to identify a new entry.
On Feb. 22, the electric-auto leader broke down through its key 10-week moving average line, a critical support level.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle. Shares are about 25% off that all-time high.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple fell about 2% Wednesday, on pace to snap a two-day win streak. Apple stock is rebounding from its long-term 40-week line and could soon try to reclaim its 10-week line,
On Feb. 18, Apple stock triggered the 7%-8% loss-cutting sell rule when it fell more than 7% below its 138.89 buy point in a cup with handle.
Meanwhile, Microsoft dropped nearly 1% Wednesday, looking to give back a part of Tuesday’s 1.2% gain. Shares are holding just above their 232.96 buy point.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.
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