The Dow Jones Industrial Average dived more than 400 points midday Thursday as stocks sold off despite better-than-expected weekly jobless claims data.
The Nasdaq sank 3.4%, the S&P 500 shed 2.2% and the Dow Jones industrials gave up 1.5% in the stock market today. Small caps tracked by the Russell 2000 tumbled 2.8%. Volume was higher on both major exchanges vs. the same time Wednesday.
Early Thursday, the Labor Department reported first-time jobless claims fell sharply to 713,000 the week ended Feb. 20. That was well below the prior week’s 861,000 claims. Economists expected a much smaller drop, to 825,000 claims.
Rising bond yields alarmed stock investors. The 10-year Treasury yield rose to its highest level since February 2020, up 7 basis points to 1.45%.
Tech stocks boosted the Nasdaq to a 43.6% gain in 2020 for its fifth best year ever. The S&P 500 rose 16.3% and the Dow added 7.2% last year. Read The Big Picture for detailed daily market analysis.
The Covid-19 pandemic continues to roil the U.S. economy, as nationwide lockdowns approach the one-year mark. But there are signs of hope as vaccinations roll out and cases start to plateau in some states.
U.S. Stock Market Today Overview
Last Update: 12:54 PM ET 2/25/2021
Cumulative Covid-19 cases worldwide have topped 113 million with more than 2.5 million deaths, according to Worldometer. In the U.S., cases are now approaching 29 million with nearly 519,000 deaths, although the number of new cases in the U.S. has slowed dramatically in recent weeks.
As countries rush to administer vaccines, Moderna (MRNA) jumped nearly 5% in twice normal trade. But it pared gains by half in early afternoon trade. Moderna stock found support at its 50-day moving average earlier this week after a failed breakout.
On Wednesday, the biotech reported a wider-than-expected Q4 loss. But sales more than doubled Wall Street targets due to rapidly growing vaccine manufacturing plans. Moderna’s Covid-19 vaccine is one of two authorized in the U.S. for emergency use. Analysts expect Moderna to turn its first annual profit this year.
Also late Wednesday, Moderna said it had manufactured a coronavirus vaccine to test against a concerning mutation out of South Africa. The new vaccine has already been shipped to the National Institutes of Health for clinical studies.
Dow Losers And Winners
Boeing (BA) fell more than 4% in fast turnover as it continues to shape the right side of a cup base. The potential buy point is 244.18, according to MarketSmith chart analysis. On Wednesday, Boeing stock soared 8%.
The Federal Aviation Administration is mandating engine inspections before Boeing 777 jets outfitted with a certain Pratt & Whitney engine can fly again. The mandate comes after a Hawaii-bound jet failed shortly after takeoff from Denver.
Among other Dow stocks, big-cap techs Apple (AAPL), Intel (INTC) and Salesforce.com (CRM) gave up more than 2% each. Apple recently triggered the 7%-8% loss sell rule from a 138.89 buy point of a cup-with-handle base.
Nike (NKE) and 3M (MMM) rose less than 1% apiece. Nike is shaping a nine-week flat base with a 148.05 buy point. It’s about 8% away from the entry. HSBC upgraded the athletic shoe giant to buy from hold and boosted its price target to 158 from 125.
Outside The Dow
Travel bookers, automakers and chip stocks led the downside among IBD’s 197 industry groups. Consumer electronics retailers, department stores and internet retailers bucked the decline.
Electric-vehicle maker Li Auto (LI) skidded 11% in heavy trade despite reporting a fourth-quarter earnings and revenue beat. Results included a surprise profit and a 356% year-over-year surge in auto deliveries in January.
Tesla (TSLA) fell 7% as it continues to trade below its 50-day moving average, which it breached this week for the first time since November. Shares are 21% off their high but remain well extended from a 466 buy point. Still, taking some profits may be prudent since Tesla has triggered two sell signals. Tesla is an IBD Leaderboard stock.
In the consumer electronics retail group, GameStop (GME) soared 65% in massive volume as Reddit/WallStreetBets appeared to be back in the short-squeeze game. On Wednesday, shares surged 104%. AMC Entertainment (AMC) leapt 10%, on track to extend its win streak to five. Shares rallied 18% on Tuesday and on Wednesday.
Bitcoin rebounded back above $51,000 and was traded up 3% at $51,177 midday Wednesday, according to Coindesk. But in early afternoon, it was back below the $50,000 level. The Grayscale Bitcoin Trust (GBTC) reversed to a 2.5% loss 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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