Dow Jones falls as Fed official says this; BBBY Stocks Plunge on Ryan Cohen Sale; Bitcoin Plunges| Investor’s Business Daily
The Dow Jones Industrial Average fell and interest rates rose after a senior Federal Reserve official commented on interest rates. Bed Bath & Beyond (BBBY) cratered after Ryan Cohen completed a stock sale with the likes of AMC Entertainment (AMC) also gets hit. Coin base (COIN) and Riot Blockchain (RIOT) collapsed as Bitcoin plunged.
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A few notable stocks continued to show strength despite the negative action. Energy storage Equinor (EQNR) and Sprouts Farmers Market (SFM) are both close to purchase points
Volume was mixed, falling on the Nasdaq but higher on the New York Stock Exchange compared to the same time on Thursday.
The yield on the benchmark 10-year government bond jumped 10 basis points to 2.98%. West Texas Intermediate crude rose to nearly $91 a barrel.
Stocks continued to struggle after Federal Reserve Bank of St. Louis President James Bullard commented on interest rates. He is open to the idea of another big hike when the Federal Reserve Open Market Committee meets, The Wall Street Journal reported.
“We should continue to move quickly to a level of the policy rate that will put significant downward pressure on inflation,” Bullard said. “I don’t really see why you want to drag out the rate hikes into next year.”
Nasdaq plunges while Small Caps dive
The Nasdaq was the worst performer of the major indexes as it plunged almost 2%. EV stock Ready engine (LCID) was a notable laggard: It fell over 7%.
The S&P 500 was also hit, falling more than 1%. Etsy (ETSY) stayed here as it fell nearly 7%.
Overview of the US stock market today |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Profit/loss | % Change |
| Dow jones | (0DJIA) | 33656.27 | -342.77 | -1.01 |
| S&P 500 | (0S&P5) | 4221.79 | -61.95 | -1.45 |
| Nasdaq | (0NDQC) | 12682.91 | -282.43 | -2.18 |
| Russell 2000 | (IWM) | 194.25 | -4.67 | -2.35 |
| IBD 50 | (FFTY) | 28.99 | -0.60 | -2.03 |
Last update: 3:14 PM ET 8/19/2022 |
||||
The S&P 500 sectors were mostly red. Energy and health were the only positive areas. Economy and discretionary spending were the worst laggards.
Bears crushed small caps, with the Russell 2000 sliding more than 2%.
The Innovator IBD 50 ETF ( FFTY ), a watch for growth stocks, fared slightly better as it fell less than 2%.
Dow Jones today: Boeing shares plunge
The Dow Jones Industrial Average was also in the process of breaking down amid the negative action. It fell nearly 1% and looks set to see its weekly winning streak come to an end.
Boeing (BA) struggled the most on the Dow Jones today. It fell more than 3%. The stock is seeking support at its 21-day exponential moving average, according to MarketSmith analysis.
On the upside, Johnson & Johnson (JNJ) did best. J&J shares rose more than 1%.
BBBY stock burn on Ryan Cohen sale
Meme stock Bed Bath And Beyond saw losses mount. It was trading near lows for the day after falling around 40% on massive volume.
A shellacking was given on news that GameStop (GME) Chairman Ryan Cohen’s RC Ventures has sold all his shares in the company. Yesterday it emerged that the activist investor was looking to dispose of his holdings.
BBBY stock had already experienced a torrid run on Thursday, but has now dipped below its bearish 200-day moving average. This is a sell signal.
That comes after it surged as much as 560% from a July 27 low of 4.54 to Wednesday’s high of 30.
AMC stock fell more than 6% while GameStop, the original meme stock, fell about 7%.
Coinbase Stock, RIOT Plunges As Bitcoin Plunges
Coinbase was near its lows for the day as it plunged nearly 11%. The volume was lighter, although this was a bit of comfort.
The stock, which cut its full-year forecast last week, has fallen below its 21-day exponential moving average. It now looks set for a test of the 50-day line. COIN shares are down more than 70% since the start of 2022.
Bitcoin struggled on Friday, falling to just above the $21,000 mark after giving up 8% in the past 24 hours, according to CoinDesk.
Other cryptocurrency games also fell sharply. Grayscale Bitcoin Trust (GBTC) fell around 8% while the Bitcoin mining game Riot Blockchain (RIOT) plunged nearly 10%.
What to do when the market pulls back; Warren Buffett stock breaks out
Outside the Dow Jones: These 2 stocks are showing strength
As the market turns, now is a good time to find stocks near entries that show relative strength.
Equinor is near a buy point at 39.25, MarketSmith analysis shows. Also, 38.80 is a viable buy point. The relative strength line is moving higher, and a further increase in energy prices could cause it to shoot up again.
It has been on a tremendous run going all the way back to the end of 2021. The overall performance is very solid, with EQNR stock having a near-perfect composite rating of 98.
Equinor, the state-owned Norwegian energy company, is a key supplier for Europe, which is no longer dependent on Russia as a major supplier of natural gas.
Sprouts Farmers Market also saw its RS line spike as it approaches a cup-with-handle point of purchase. The entry here is 31.59.
All-round performance is strong here. The supermarkets are also among the top 6% of stocks in terms of price development over the last 12 months.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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