Dow Jones Sells Off 300 Points On Jobless Claims; First Republic Crashes 35% On Possible Sale

The Dow Jones Industrial Average sold off 300 points Thursday morning on a surprise drop in weekly initial jobless claims from the Labor Department. Meanwhile, regional bank First Republic (FRC) crashed as much as 35% after Bloomberg reported the company is “exploring strategic options, including a sale.”

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The SPDR S&P Regional Banking ETF (KRE) declined another 3.6%, on pace to to add to Wednesday’s 1.6% loss. Other regional banks were also lower, but not as sharply as previous sessions. Western Alliance (WAL) tumbled 12%, while Keycorp (KEY) was off 9%.

Further, Credit Suisse (CS), which sparked early stock market losses on Wednesday, reversed lower despite receiving a $53 billion lifeline from the Swiss central bank.

Economic Data, Earnings

Weekly first-time unemployment claims dropped to 192,000, much lower than the expected decrease to 205,000 vs. 211,000 in the previous week. Meanwhile, the Commerce Department’s housing starts numbers rose more than expected to 1.450 million in February vs. 1.309 million in January. Housing permits — a measure of upcoming construction activity — also rose more than anticipated, to 1.524 million in February vs. January’s 1.339 million.

Finally, the Philadelphia Federal Reserve’s Manufacturing Index remained in contraction, with a -23.2 reading for March, slightly up from February’s -24.3.

Overseas, the European Central Bank raised interest rates by a half percentage point, continuing its fight against inflation despite rising concerns over the financial system.

On the earnings front, Academy Sports & Outdoors (ASO), Adobe (ADBE), Dollar General (DG) and Five Below (FIVE) reported results.

Academy climbed more than 5% in morning trade, while Adobe jumped 3% early Thursday after beating Wall Street’s sales and earnings targets for its fiscal first quarter and guided higher for the full year.

Dollar General slipped 1.5% after its fourth-quarter results, as Five Below sank 4% after reporting a disappointing full-year outlook late Wednesday.

Stock Market Today

Electric-vehicle leader Tesla (TSLA) traded down 0.3% Thursday morning. Also, Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were mixed after  today’s stock market open.

Chip leader Advanced Micro Devices (AMD), IBD SwingTrader stock Meta Platforms (META) and IBD Leaderboard watchlist stock Palo Alto Networks (PANW) — 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. AMD featured in Wednesday’s IBD Screen Of The Day. And Nike was featured in this week’s Stocks Near A Buy Zone column. Meta is an IBD SwingTrader stock.

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Dow Jones Today: Oil Prices, Treasury Yields

After Thursday’s opening bell, the Dow Jones Industrial Average lost 0.9%, and the S&P 500 was down 0.5%. The Nasdaq composite, which doesn’t track financials, fell just 0.15% in morning action with Adobe a top performer.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.2% and the SPDR S&P 500 ETF (SPY) moved down 0.5% early Thursday.

The 10-year U.S. Treasury yield dived to 3.49% Wednesday, as investors crowded back into bonds as Credit Suisse compounded the financial sector’s concerns. On Thursday, the 10-year Treasury yield ticked lower to 3.42% in morning trade.

U.S. oil prices held below $68 a barrel after Wednesday’s heavy losses, as West Texas Intermediate traded at its lowest level since December 2021.

Stock Market Correction

On Wednesday, the Dow Jones Industrial Average ended the session with a 0.9% loss while the S&P 500 shed 0.7%. The Nasdaq composite closed nearly flat, underpinned by Big Tech’s “not a bank” strength. The Russell 2000 small-cap index brought up the rear, giving up 1.7%.

Wednesday’s Big Picture column commented, “IBD lowered its outlook to ‘market in correction’ last week, in recognition of weak stock market price action fueled by the banking crisis. Now is the time to raise cash and avoid falling knives because prices could drop much lower. However, it also makes sense to build watchlists of the strongest performers because they could lead the upside when positive catalysts return.”

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 1.3% early Thursday.

Following recent declines, 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 overall market 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 was up 0.3% Thursday.

3 Top Growth Stocks To Watch In The Stock Market Correction

Top Stocks To Watch: AMD, Meta, Palo Alto

Advanced Micro Devices broke out past an 89.04 buy point in a flat base during Wednesday’s 2.55% breakout move. Shares closed in the buy range that tops out at 93.49. AMD featured in Wednesday’s IBD Screen Of The Day column. AMD stock rose 0.1% Thursday morning.

Backstory: In early February, the chipmaker reported stronger-than-expected data center chip sales in the fourth quarter. But AMD tempered that news with soft guidance for the current period.

Backstory: 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. PANW stock traded up 0.6% Thursday.

Backstory: 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.

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 15, 2023

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

Tesla Stock

Tesla stock skidded 1.5% Wednesday, snapping a three-day win streak. Still, shares are holding above their key 50-day moving average. Shares closed Wednesday around 53% off their 52-week high.

TSLA stock moved up nearly 1% Thursday morning, still looking to bounce back from Wednesday’s losses.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares rose 0.3% Wednesday, adding to this week’s rebound from the long-term 200-day line. AAPL rose 0.2% Thursday morning.

Microsoft shares moved further above its 200-day line after Wednesday’s 1.8% rally. MSFT stock now shows a new buy point at 276.86, due to the forming flat base. The stock is still around 16% off its 52-week high. MSFT stock fell 0.3% early Thursday.

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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