Dow Jones Today, Futures Tumble As Bitcoin, Tech, Commodities Stocks Slide; Target Rallies On Earnings, Salesforce Upgraded

Stock futures shunted sharply lower Wednesday as bond yields jumped, commodity prices backed off and Bitcoin tumbled to a three-month low. Earnings news produced a few winners, with Target and Israel’s Zim Integrated leading the list. was a lonely advancer on the Dow Jones today, following an analyst upgrade.


Dow Jones futures carved 0.8% lower as Microsoft (MSFT), Chevron (CVX) and Apple (AAPL) all dropped about 1.5%. S&P 500 futures skidded 1.1% below fair value. Nasdaq 100 futures unspooled a 1.4% loss, as ASML Holding (ASML), Tesla (TSLA) and Applied Materials (AMAT) led the early declines.

Commodities plays packed the low-end of the S&P 500, with miner Freeport-McMoRan (FCX) and steelmaker Nucor (NUE) at the bottom of the list.

At the top of the Nasdaq, China-based travel site (TCOM) traded up 3% after reporting its first-quarter results.

Big box retailer Target (TGT) rallied 3.8%, leading the S&P 500 and placing the stock in a possible buy zone, after shredding analysts’ first-quarter earnings expectations. Game developer Take-Two Interactive (TTWO) was also high on the S&P 500, up 2.3% after reporting its fiscal fourth quarter earnings.

Ford Motor (F) climbed 0.7%, as Tudor Pickering initiated Ford stock with a buy rating and a 17 price target, after the company introduced the first electric version of its F-150 pickup — the Lightning — a day earlier than planned.

Growth stocks were off to a rough start, with IPOs PLBY Group (PLBY) down 3.2% and Upstart Holdings (UPST) dropping 6.4% to the bottom of the IBD 50 list.

Dow Jones Today: Salesforce Upgrade (CRM) climbed 0.5%, the sole early gain on the Dow Jones today. Morgan Stanley upgraded Salesforce stock to overweight, from equal weight, while keeping its price target unchanged at 270.

The report cited share price underperformance following the December announcement of the Slack acquisition. The deal is expected to close in July. The note said Salesforce was well positioned to benefit from increased corporate spending on digital transformation.

The big fireworks may occur after the close on the Dow Jones today, with Cisco Systems (CSCO) due to report its fiscal third-quarter earnings.

Bitcoin Tumbles To 3-Month Low

The Bitcoin price broke lower yet again overnight, tumbling below $29,000 to its lowest level since early February. Bitcoin tried to rebound, topping $45,700 before fading. The cryptocurrency traded around $39,200 early Wednesday, according to CoinDesk.

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Chinese regulators on Tuesday stepped up their warnings, saying financial institutions should not accept cryptocurrencies as payment. Bitcoin came under heavy selling over the past week, after Elon Musk said Tesla would no longer accept the cryptocurrency as payment for its electric vehicles, citing environmental concerns.

Earnings News: Target, Zim Integrated

Israel-based Zim Integrated Shipping Services (ZIM) rose 2.9% after reporting a strong first-quarter sales and earnings beat. Shares are trading just below a 43.09 buy point in an IPO base. The stock ended Tuesday 178% above its January initial offering price.

Target rallied 3.8%, pointing it toward a buy zone on a rebound from support at its 10-week moving average. The Minneapolis-based retailer reported a 525% earnings gain on a 23% revenue increase. Same-store sales popped almost 23%. Digital sales soared 50%.

Vital Signs: Oil, Copper, Bond Yields

West Texas Intermediate oil prices fell almost 2% to near $64 a barrel — still well within its recent trading range below the 33-month high at $67.98 posted on March 8. WTI remains up 33% so far this year.

Copper dropped 2.4% to $4.61, backing away from last week’s record peak above $4.78 per pound. Copper broke past its previous record high, set in February 2011, on May 5.

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The 10-year Treasury yield rose to 1.67%, vs. the CBOE settle of 1.64% on Tuesday. April inflation data tripped a surge in the 10-year to above 1.69% a week ago. Yields had skirted pre-pandemic levels late in March, climbing to almost 1.76%, the highest level since January 2020.

Dow Jones Today: The Nasdaq Knot

Heading into the seven final trading days of May, the Nasdaq Composite is tracking toward its first monthly loss since October, down 4.7% since April 30. The Dow Jones today opens holding a 0.6% gain, on track for a fourth straight monthly advance. The S&P 500 is down 1.3%, poised to snap its three-month run up.

So “sell in May and go away” may not have been a bad idea. The debate over whether the current inflation trend is a blip or will remain persistent shows no signs of reaching a conclusion. And that appears to have the Nasdaq tied in a knot, below the 14,000 level and wrapped around its flattening 50-day moving average.

Tuesday’s Big Picture article noted the Nasdaq faced the possibility of a sixth straight weekly decline. If that occurs, it will be the first time since the fourth quarter of 2012.

The best strategy for growth stock investors is still to avoid what’s not working (large-cap technology stocks) and go with what’s working (energy, financials, materials). Keep positions small to start. The market will tell you pretty quickly if your timing was right. Add to winning positions and cut your laggards loose.

May’s Best Performers On Dow Jones Today

Specialty chemicals maker Dow (DOW) has been the hottest ticket on the Dow industrials this month, as rising commodities prices point to an upswing in the cyclical stock’s markets.

Shares are up more than 11% since April 30. That included a breakout from a six-week flat base with a buy point at 67.37.

Dow shares on Tuesday remained in the buy range above that entry, which runs to 70.74. Dow stock holds an 80 Composite Rating from IBD. Its relative strength rating is 81, and its relative strength line punched through to new highs alongside the breakout.

Dow Jones financials Goldman Sachs (GS), JPMorgan (JPM) and American Express (AXP) have so far been the other hot tickets in May, as they ride the boost from rising interest rates.

Goldman stock has loitered for the past two weeks in its buy range above a 356.95 buy point in a seven-week cup base. The buy range extends to 374.80.

JPMorgan and American Express are also in buy ranges. JPMorgan’s entry is at 161.79, unless more aggressive chart readers plotted a buy point at 157.35.

American Express has a 151.56 buy point, and a buy range effective through 159.14.

Find Alan R. Elliott on Twitter @IBD_Aelliott


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