Dow Jones Dives As Inflation Fears Rise; This Stock Pops As Warren Buffett Raises Stake; Nike Plunges

The Dow Jones Industrial Average was down sharply in afternoon trading Tuesday amid more worries about the health of the U.S. economy. A Warren Buffett stock popped on news that Berkshire Hathaway (BRKB) had raised its stake once again. Nike (NKE) tumbled on earnings with Apple (AAPL) another blue chip loser as tech stocks struggled.

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A couple of stocks still attempted breakouts despite the challenging action. Both Humana (HUM) and Molson Coors (TAP) fell back after passing buy points.

Volume was mixed, rising on the Nasdaq but falling on the New York Stock Exchange compared to the same time Monday.

The yield on the benchmark 10-year Treasury note was roughly flat at 3.2%. West Texas Intermediate crude oil rose about 2% to trade at nearly $112 per barrel.

Inflation Fears Rise As Consumer Confidence Falls

The Conference Board’s measure of consumer confidence fell to 98.7 in June from 103.2 in May. This was a steeper fall than analysts expected and the lowest level since February last year.

In addition, its inflation expectations index rose to 8% from 7.5%. This was the highest level since it began in 1987.

Jefferies economists Thomas Simons and Aneta Markowska said in a note to clients that inflation expectations are “moving in the wrong direction for the Fed.”

Nasdaq Dips As Tech Stocks Toil

The Nasdaq was faring worst out of the major indexes. It plunged 2.5%. Datadog (DDOG) was among the worst decliners, plunging nearly 8%.

The S&P 500 also lagged, falling almost 2%. Etsy (ETSY) struggled again here, falling almost 8%.

The S&P 500 sectors were mostly negative. Only energy was managing to turn in a gain, with technology, consumer discretionary and communication services the worst laggards.

Small caps were also getting mauled by the bears, with the Russell 2000 falling nearly 2%.

Growth stocks were taking an even worse hammering, with the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, down 2.5%.

Dow Jones Today: Nike Earnings Blow, Apple Stock Falls

The Dow Jones Industrial Average was also struggling. It gave up more than 400 points, or more than 1%.

Nike was the worst performing stock in the index as it fell on weak outlook. It was down more than 6% and lost ground on its 50-day moving average, MarketSmith analysis shows.

NKE was hammered after the firm said it expects fiscal 2023 revenue to rise in the low double digits on a currency-neutral basis. Real dollar revenue in the current Q1 will only be flat to slightly up, slightly below analyst targets.

Other stocks struggling on the Dow Jones today included Apple and Microsoft (MSFT). AAPL gave up 2.5% while MSFT fell almost 3%.

Both are trading below their 50-day moving averages.

Market Rally Sends Very Bearish Signal; 5 Stocks To Watch

Warren Buffett Stock Gains As BRKB Buys More Shares

Warren Buffett stock Occidental Petroleum (OXY) managed to fight its way higher after Berkshire Hathaway once again raised its stake in the oil company.

With energy the only sector managing to make progress, Occidental stock managed to gain nearly 3%.

OXY stock is now up almost 95% so far in 2022. It is now trying to reclaim the key 50-day moving average after falling from highs, MarketSmith analysis shows.

Buffett’s firm Berkshire Hathaway snapped up an additional $44 million worth of stock, according to a SEC filing. It now owns almost 153.5 million shares, or about 16% of the company.

Among other oil stocks, Callon Petroleum (CPE) rose more than 2% while Diamondback Energy (FANG) gained over 1%. Apache parent APA (APA) also rose more than 1%.

The Vanguard Energy Index Fund ETF (VDE) was up more than 1%, and is currently up around 30% since the start of the year.

Outside Dow Jones: These Stocks Test Buy Points

A couple of stocks attempted breakouts despite the challenging action. They are worth watching to see if they can hold up .

Managed health care stock Humana is one to keep an eye on after it briefly passed a consolidation pattern buy of 475.54.

The relative strength line has just hit a new high and it remains on a strong long-term uptrend.

HUM stock boasts strong earnings and it is the top 8% of stocks in terms of market performance over the past 12 months.

Other managed health care stocks such as Leaderboard stock UnitedHealth Group (UNH) and Centene (CNC) have also been doing well of late.

Molson Coors has also fallen under its buy zone after earlier moving past a cup with handle entry of 57.55.

Its RS line is holding at fresh heights on both its daily and weekly charts.

All-around performance is top notch, which is reflected in its near perfect IBD Composite Rating of 98.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.

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