Dow Jones Reverses Lower After Fed Minutes; Salesforce, Adobe Crumble As Software Massacre Continues

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The Dow Jones Industrial Average deed different grounds precocious Wednesday, but a question of selling deed the banal marketplace aft the minutes from the mid-December Federal Reserve gathering were released astatine 2 p.m. ET. Salesforce banal lagged severely successful the Dow Jones today, wounded by a downgrade from UBS.


To beryllium sure, the Fed's argumentation connection successful mid-December sounded a batch much hawkish. But the minutes revealed adjacent much hawkishness due to the fact that the Fed is acceptable to commencement reducing its bloated equilibrium expanse by selling its monolithic enslaved holdings. Last month, the Fed said it would extremity its monthly enslaved purchases by March.

The 10-year Treasury output spiked implicit the 1.70% level.

The S&P 5o0 slumped 1.3%, but Nucor (NUE) and Signature Bank (SBNY) were agleam spots, up 5.5% and 2%, respectively. Nucor jumped past a 122.16 buy point successful beardown volume, portion New York-based Signature Bank surged retired of a seven-week cup base with a accepted introduction of 342.13.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 36575.77 -223.88 -0.61
S&P 500 (0S&P5) 4733.31 -60.23 -1.26
Nasdaq (0NDQC ) 15238.62 -384.10 -2.46
Russell 2000 (IWM) 219.74 -5.24 -2.33
IBD 50 (FFTY) 43.46 -1.58 -3.51
Last Update: 2:52 PM ET 1/5/2022

As wealth flows retired of exertion stocks with precocious price-to-earnings (P-E) ratios, it's uncovering its mode into debased P-E names successful the S&P 500 similar AT&T (T), Intel (INTC), Cardinal Health (CAH) and Hewlett-Packard Enterprise (HPE).

Dow Jones Today

The Dow Jones industrials gave backmost 0.6%. Intel fell disconnected highs but inactive roseate much than 2%. But it's inactive a laggard successful the spot assemblage arsenic the banal tries to regain its 200-day moving average. Merck (MRK) moved supra its 50-day moving average, but it inactive looks similar damaged goods aft the banal plunged astir 15% successful November.

Honeywell (HON) besides outperformed successful the Dow Jones with a bullish determination supra its 50-day line. But successful summation to the 50-day line, the stock's 200-day moving average, presently astir 221, is different imaginable absorption level to watch.

Money flowed into different debased P-E stocks successful the Dow Jones, including IBM (IBM), Walgreens (WBA) and Verizon (VZ).

Outside The Dow Jones

Another sell-off successful bundle stocks weighed connected the Nasdaq composite, which was down 2.5% successful day trading. The Nasdaq 100 fell 2.2%, wounded by weakness successful Adobe (ADBE), which besides got a downgrade from UBS.

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Several software-related manufacture groups successful IBD's database showed losses of astatine slightest 3%.

Qualcomm (QCOM) was successful a tiny radical of exertion stocks that outperformed successful the Nasdaq 100. QCOM banal was disconnected league highs, but inactive roseate 0.6%. After an net surge successful aboriginal November, Qualcomm is trying to determination supra a anterior buy point of 188.87.

ETF Action

Among closely-watched ETFs, the Energy Select Sector SPDR Fund (XLE) pared gains but edged higher by 0.6%. The speech traded money broke retired implicit a trendline Monday, giving an aboriginal entry.

Several lipid and state stocks proceed execute good successful the banal market. Benchmark WTI crude lipid futures person rallied sharply disconnected their precocious November debased astir 65. Oil settled Wednesday astatine $77.85 a barrel, up 1.1%.

Join IBD experts arsenic they analyse actionable stocks successful the banal marketplace rally connected IBD Live

The relentless selling successful bundle stocks continued Wednesday. But the VanEck Vectors Semiconductor ETF (SMH) is inactive holding supra its 10-week moving mean and lone 4% disconnected its high. Leaderboard stocks Advanced Micro Devices (AMD) and Nvidia (NVDA), which person been nether selling unit lately, are large SMH components.

The Innovator IBD 50 ETF (FFTY) crashed 5%, portion the Innovator IBD Breakout Opportunities ETF (BOUT) dipped 2%. FFTY is successful a carnivore marketplace of its ain aft a 21% pullback. BOUT is successful overmuch amended shape, lone 2% disconnected its high.

The iShares Expanded Tech-Software Sector ETF (IGV) fell 4% and is present down much than 7% for the week.

Follow Ken Shreve connected Twitter @IBD_KShreve for much banal marketplace investigation and insight.


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