The Dow Jones Industrial Average fell more than 400 points Thursday afternoon as the stock sold out despite better-than-expected weekly unemployment benefit data.
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The Nasdaq fell 3.4%, the S&P 500 lost 2.2% and the Dow Jones industrials were down 1.5% in the stock market today. Small caps followed by the Russell 2000 plummeted 2.8%. Volume was higher on both major exchanges compared to the same time on Wednesday.
In early Thursday, the Labor Department reported that initial unemployment claims plummeted to 713,000 in the week ending February 20. That was well below the 861,000 applications from the week before. Economists had expected a much smaller drop to 825,000 claims.
Equity investors were shocked by rising bond yields. The yield on 10-year Treasury bonds rose to its highest level since February 2020, by 7 basis points to 1.45%.
Tech stocks pushed the Nasdaq to a 43.6% gain in 2020, for its fifth best year on record. The S&P 500 rose 16.3% last year and the Dow 7.2%. Read The Big Picture for a detailed daily market analysis.
Covid-19 update
The Covid-19 pandemic continues to shake the U.S. economy as blockades across the country near a year’s mark. But there are signs of hope as vaccinations roll out and cases begin to flatten in some states.
Overview US stock market today |
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|---|---|---|---|---|
| Table of contents | Symbol | price | Profit loss | % Change |
| Dow Jones | (0DJIA) | 31559.68 | -402.18 | -1.26 |
| S&P 500 | (0S & P5) | 3852.47 | -72.96 | -1.86 |
| Nasdaq | (0NDQC) | 13215.09 | -382.88 | -2.82 |
| Russell 2000 | (Etc.) | 220.49 | -6.51 | -2.87 |
| IBD 50 | (FFTY) | 45.18 | -1.75 | -3.73 |
Last update: 12:54 PM ET 2/25/2021 |
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According to Worldometer, there are more than 113 million cases of covid-19 worldwide, with more than 2.5 million deaths. In the US, the number of cases is now approaching 29 million with nearly 519,000 deaths, although the number of new cases in the US has declined dramatically in recent weeks.
As countries rush to administer vaccines, Modern (MRNA) was up nearly 5% in twice the normal trade. But it halved profits in early afternoon trading. Moderna stocks found support near the 50-day moving average earlier this week after a failed breakout.
On Wednesday, the biotech reported a larger-than-expected loss in the fourth quarter. But sales doubled Wall Street’s targets thanks to rapidly growing vaccine manufacturing plans. Moderna’s Covid-19 vaccine is one of two approved in the US for emergency use. Analysts expect Moderna to make its first full year profit this year.
Also late Wednesday, Moderna said it had manufactured a coronavirus vaccine to test against a worrying mutation from South Africa. The new vaccine has already been sent to the National Institutes of Health for clinical studies.
Dow losers and winners
Boeing (BA) was down more than 4% in quick turnover as it continues to form the right side of a cup base. The potential buy point is 244.18, according to MarketSmith map analysis. Wednesday, Boeing’s share rose by 8%.
The Federal Aviation Administration requires engine inspections before Boeing 777 jets equipped with a particular Pratt & Whitney engine can fly again. The mandate comes after a jet plane to Hawaii failed shortly after takeoff from Denver.
Include Dow stocks, big-cap techs Apple (AAPL), Intel (INTC) and Salesforce.com (CRM) each reported more than 2%. Apple recently triggered the 7% -8% loss sale rule from a buying point of 138.89 a cup with handle.
Nike (OR) and 3M (MMM) was up less than 1% each. Nike is on a flat nine-week basis with a buy point of 148.05. It’s about 8% away from the entry. HSBC has upgraded the athletic shoe giant to buy from hold and raised its price target from 125 to 158.
Outside the Dow
Travel bookers, car manufacturers and chip stocks led to the downside among IBD’s 197 industry groups. Consumer electronics retailers, department stores and internet retailers have faced the downturn.
Manufacturer of electric vehicles Li Auto (LI) was down 11% in heavy trading despite reporting a fourth quarter earnings and sales report. The results include a surprising profit and a 356% year-over-year increase in car deliveries in January.
Tesla (TSLA) was down 7% as it trades below its 50-day moving average, which it crossed for the first time since November this week. Shares are down 21% from their high, but continue to expand well from a buy point of 466. Still, it may be wise to take some profit as Tesla has triggered two sell signals. Tesla is an IBD Leaderboard stock.
In the consumer electronics retail sector GameStop (GME) was up 65% in massive volume as Reddit / WallStreetBets appeared to be back in the short-squeeze game. On Wednesday, the shares were up 104%. AMC Entertainment (AMC) jumped 10%, on track to expand its win streak to five. Shares rose 18% on Tuesday and Wednesday.
Bitcoin bounced back above USD 51,000 and rose 3% on Wednesday afternoon at USD 51,177, according to Coindesk. But by the beginning of the afternoon, it was back below the $ 50,000 level. The Grayscale Bitcoin Trust (GBTC) returned to a loss of 2.5% and was below the 48.75 buy point of a flawed V-shaped cup pattern.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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