Dow Jones, Nasdaq Fall As Inflation Hits New 40-Year High; Oil Reversed Lower But These Stocks Trade In Buy Zones

The Dow Jones Industrial Average and Nasdaq composite both traded lower Thursday as inflation hit a 40-year high, according to U.S. data on consumer prices from the Labor Department. Meanwhile, crude oil prices rose again after falling more than 11% on Wednesday.

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The S&P sectors were mostly lower. Energy and utilities were the only two sectors that traded positively. Financials and technology stocks were the worst performers, with losses of over 1.8% each.

Dow Jones In Stock Market Today

A pattern of big price moves and high volatility continues to characterize the stock market today. At around 1:30 p.m. ET, the Dow Jones industrials were down 1%, erasing much of the prior day’s gains. The Nasdaq lost nearly 2%, after a gain of well over 3% on Wednesday. The S&P 500 decreased 1.2% while the Russell 2000 traded 1.4% lower.

Volume was running lower on the Nasdaq and on the NYSE vs. the same time on Wednesday. Elsewhere, the yield on the 10-year Treasury note continued to rise and is now back over 2%.

The Labor Department said the CPI rose 0.8% in February from the prior month. It jumped 7.9% vs. a year ago, the biggest annual gain since January 1982. The core CPI, which removes food and energy prices, rose 0.5% from January and 6.4% from a year ago. That’s the highest since August 1982.

The Innovator IBD 50 ETF (FFTY), a great place to look for stocks breaking out, sank 0.6% but fared better than the major indexes.

Over in the IBD 50, solar stock SolarEdge Technologies (SEDG) led the downside, with losses of over 6%. Shares are attempting to build the right side of a cup base with 389.81 entry but remain well off this proper entry.

The stock got some airtime in today’s episode of IBD Live.

U.S. crude oil futures slumped Thursday after rising earlier in the session. The commodity fell below $109 a barrel Wednesday and sank 2% on Thursday to just above $106 a barrel. Meanwhile, the SPDR Energy Select ETF (XLE) gained over 2% and many oil stocks also continued higher.

Oil Stocks Trading In Buy Zones

Oceaneering International (OII), a firm that offers deep-water engineered services to the offshore oil and gas industry, rose 2.6% into a buy range. The stock broke out of a double-bottom base with a buy point of 16.46 on Monday initially but dipped below the entry yesterday. After a long run, the oil and gas field services industry group, of which Oceaneering International is a part, remains strong and currently ranks No. 4 of the 197 IBD industry groups.

Elsewhere, thinly traded oil and gas exploration firm Black Stone Minerals (BSM) broke out from a long base with a 12.85 buy point. The stock’s RS line hit a new high alongside the breakout while shares continued to rise in heavy volume, two bullish signs.

Investors should note that this stock has very light daily average dollar volume of around $5 million. Typically we look for stocks with daily average dollar volume above $20 million.

Chemicals Stocks On The Rise

Fertilizer stocks also collectively rose, with new IBD 50 stock LSB Industries (LXU) jumping 10% to new highs. Shares are well extended after powerful earnings on Feb. 23. The company makes fertilizers and chemicals for mining and industrial customers.

Another fertilizer stock CF Industries (CF) also rose over 5%. The stock was named the IBD Stock of the Day on Monday but also appears to be quite extended. Investors should consider locking in some gains as the stock has cleared a key channel level.

Finally, chemicals stock FMC (FMC) broke out from a 123.76 buy point in a long base. The stock’s RS line hit a new high alongside the breakout and shares remains strongly above the 50-day level of support.

FMC’s pattern arguably shows the elements of a long saucer with handle. From this point of view, the stock is moving past a handle entry of 120.67.