Dow Jones Dives 500 Points On Renewed Banking Fears As Credit Suisse Crashes 28%

The Dow Jones Industrial Average dived more than 500 points Wednesday, as Credit Suisse (CS) crashed 28% on reports the company’s largest investor, Saudi National Bank, withdrew funding. Meanwhile, a key U.S. inflation gauge, the Producer Price Index, unexpectedly declined in February.

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Credit Suisse’s slide quickly spread to other financials, dragging markets sharply lower in the U.K. and Europe. Further, the SPDR S&P Regional Banking ETF (KRE) sold off 4.5% Wednesday morning following Tuesday’s 2.1% rebound. The selling was not as steep as the financial crashes seen Friday and Monday.

But this time around big banks — particularly those with broad international exposure — appeared to lead the early declines. Bank of America (BAC) skidded 3.6%. JPMorgan (JPM) declined 3.5%. And Wells Fargo (WFC) dropped 4.7% in early trade.

PPI Inflation Report

Early Wednesday, the Labor Department’s PPI dropped 0.1% in February with an annual rise of 4.6%, compared with an expected monthly rise of 0.3% and a 5.4% annual increase. The index tracks the prices received by producers for goods and services.

Core PPI, which excludes prices received for energy and food, was flat on the month with an annual increase of 4.4% vs. an expected monthly rise of 0.4% and a 5.2% annual increase.

Elsewhere, retail sales came out from the Commerce Department. Sales fell 0.4% in February, in line with estimates vs. January’s 3.0% surge. A light reading on sales could potentially figure into the Federal Reserve’s thinking on a rate hike next week.

On the earnings front, homebuilder Lennar (LEN) advanced 2% after the company’s better-than-expected first-quarter results. Shares are building a flat base with a 109.38 buy point.

Academy Sports & Outdoors (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX) and Five Below (FIVE) are also due out this week.

Stock Market Today

Electric-vehicle leader Tesla (TSLA) traded down 2% Wednesday morning. Also, Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were sharply lower after the stock market open.

Social media giant Meta Platforms (META), IBD Leaderboard watchlist stock Palo Alto Networks (PANW) and New Relic (NEWR) — as well as Dow Jones stocks Nike (NKE) and Salesforce (CRM) — are among the top stocks to watch in the ongoing stock market correction.

Palo Alto is an IBD Leaderboard watchlist stock. New Relic was recently an IBD Stock Of The Day. And Nike was featured in this week’s Stocks Near A Buy Zone column.

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Dow Jones Today: Oil Prices, Treasury Yields

After Wednesday’s opening bell, the Dow Jones Industrial Average dived 1.6%. The S&P 500 was down 1.5%, with banks posting most of the heavy losses, along with Freeport McMoRan (FCX), Carnival Cruises (CCL) and Coterra Energy (CTRA).

The Nasdaq composite, which do not track financials, lost 1.2% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.2% and the SPDR S&P 500 ETF (SPY) moved down 1.7% early Wednesday.

The 10-year U.S. Treasury yield rebounded to 3.63% Tuesday. Investors crowded back into bonds early Wednesday, sending the 10-year Treasury yield to 3.47% in morning trade.

Oil prices extended Tuesday’s sharp losses, cutting below $69 a barrel for the first time since 2021. West Texas Intermediate futures slid another 4%. The Energy Information Administration delivers weekly oil inventories data at 10:30 a.m.

Stock Market Correction

On Tuesday, the Dow Jones Industrial Average rallied 1.1%, and the S&P 500 gained 1.65%. The tech-heavy Nasdaq composite advanced 2.1% after a burst of buying at the close.

Tuesday’s Big Picture column commented, “Tuesday marked the second day of a rally attempt for the Nasdaq composite and the first day of a rally attempt for the S&P 500. Even though the price action in individual growth stocks looks a lot better, the market still needs to prove itself.”

Now is an important time to read IBD’s The Big Picture column amid the new stock market correction.

Five Dow Jones Stocks To Buy And Watch Now

Dow Jones Stocks To Watch: Nike, Salesforce

Since bottoming on Oct. 3, Nike shares have rallied as much as 59% to their recent high at 131.31. Now the stock is consolidating within a flat base that offers a 131.41 buy point, according to IBD MarketSmith pattern recognition. NKE stock moved down 2% early Wednesday.

Despite Tuesday’s rise, the stock remains below its 50-day moving average, a key benchmark. A decisive retake would be bullish for the base-building prospects, carving the right side of the pattern. The relative strength line is also holding up well during the rapidly developing stock market correction.

In recent weeks, Dow Jones leader Salesforce showed big upside strength after strong fourth-quarter results. Those gains rapidly disappeared during last week’s losses, but now the stock is back above a 178.94 cup-with-handle entry this week. Still, the market is in a correction, so investors should avoid new purchases until the market environment improves. CRM stock fell 1.2% Wednesday.

3 Top Growth Stocks To Watch In The Stock Market Correction

Top Stocks To Watch: Meta, Palo Alto, New Relic

Facebook-parent Meta Platforms raced above an early entry at 190.46 and is rapidly approaching a flat base’s 197.26 buy point following an earnings-fueled price surge in February. Shares are about 2% away from the latest buy point, as they rose 7.25% Tuesday. Meta shares were off 0.3% Wednesday morning.

Back story: Like social media rivals, Meta is struggling due to a sharp reduction in advertising revenue as clients squirm over macroeconomic concerns, recession fears and higher interest rates. This is happening as it spends billions of dollars on a risky bet to build the “metaverse,” a virtual reality world that has yet to take hold.

IBD Leaderboard watchlist stock Palo Alto Networks continues to trade quietly in a handle after the stock’s 12.5% surge on Feb. 22. Shares remain within striking distance of a base’s 192.94 buy point. Bullishly, the stock’s relative strength line is at new highs, as the stock sharply outperforms the market averages. PANW stock traded down 0.8% Wednesday.

Back story: On Feb. 21, the cybersecurity giant announced good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.

Recent IBD Stock Of The Day, New Relic, is working on a base with a 80.98 buy point in the aftermath of the Feb. 8 earnings-fueled surge. The RS line is holding up for now. NEWR stock slipped 1.3% early Wednesday.

Back story: New Relic provides a cloud-based suite of software products that enables organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help make data-driven decisions.

Learn How To Time The Market With IBD’s ETF Market Strategy

Stocks To Watch In Stock Market Correction

These are four top stocks to watch in today’s stock market, including two Dow Jones leaders.

Source: IBD Data As Of March 13, 2023

Join IBD experts as they analyze leading stocks in the current stock market correction on IBD Live

Tesla Stock

Tesla stock rallied 5% Tuesday, rising for a third straight day and continuing to bounce after finding support at its 50-day moving average. Shares closed Tuesday around 52% off their 52-week high.

TSLA stock moved down 2% Wednesday morning, threatening to give up a part of Tuesday’s gains.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 1.4% Tuesday, extending this week’s rebound from the long-term 200-day line. AAPL lost 0.9% Wednesday morning.

Microsoft shares moved further above its 200-day line after Tuesday’s 2.7% jump. The stock is still around 20% off its 52-week high after recent declines. MSFT stock fell 0.2% early Wednesday.

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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