The Dow Jones Industrial Average briefly fell more than 300 points Tuesday, while tech stocks slashed losses on Fed Chief Powell’s monetary comments. Bitcoin tumbled below $45,000. EV leaders Nio and Tesla stock plummeted 15% and 12% before cutting losses.
Among the Dow Jones leaders, Apple (AAPL) moved down 2.4%, while Microsoft (MSFT) declined nearly 1% in today’s stock market. Disney (DIS) is back in buy range above an entry. Meanwhile, Home Depot (HD) dropped 5% despite strong earnings results early Tuesday.
Tesla (TSLA) plummeted as much as 12% Tuesday, while Nio (NIO) crumbled 15%, as they both continue to fall sharply. Both slashed their heavy losses in midday trade. Cadence Design Systems (CDNS) and ZoomInfo (ZI) reported strong earnings results late Monday.
Dow Jones Today: Powell Comments
On Tuesday, the Dow Jones Industrial Average fell 0.5%, while the S&P 500 moved down 0.8%. The tech-heavy Nasdaq composite declined 2.1% in midday trade after plunging as much as 3.9% in the opening minutes of trade.
Early Tuesday, Fed Chief Jerome Powell reiterated that the Fed is “committed to using our full range of tools to support the economy and to help ensure that the recovery from this difficult period will be as robust as possible,” in a speech to members of Congress.
Powell commented that inflation and employment remain well below the Fed’s objectives, meaning easy monetary policy is likely to remain in place.
U.S. Stock Market Today Overview
Last Update: 10:36 AM ET 2/23/2021
Stock Market Rally
Looking back at the current uptrend, November was a key month for the stock market. IBD’s The Big Picture flagged the new uptrend following the market’s bullish follow-through day on Nov. 4. Meanwhile, the middle of February has the Dow Jones Industrial Average, Nasdaq and S&P 500 pulling back from record highs.
Monday’s Big Picture cautioned, “Just four trading sessions ago, the market cap-weighted Nasdaq touched new all-time highs and closed above 14,000 for a third straight session. But a fourth decline in the past five sessions has now trimmed the index’s year-to-date advance to 5%.”
Focus on stocks that show strong relative strength during the current weakness. They could be some of the market’s leaders if the indexes are able to get back to their record-setting ways.
Bitcoin Price Dives
Bitcoin dived about 13% Tuesday midday, briefly falling below $45,000 before paring losses to $47,700 in morning trade, according to CoinDesk. The price of Bitcoin topped $57,000 on Saturday and $58,000 on Sunday, eventually topping out at $58,332.
The Grayscale Bitcoin Trust (GBTC) ETF slid 12%, threatening to add to Monday’s 5.6% decline.
Dow Jones Stocks: Disney
Disney stock advanced 4.5% Monday. Shares gained another 2% Tuesday midday, moving them out of buy range.
Dow Jones Earnings: Home Depot
Dow Jones giant Home Depot declined more than 3% Tuesday midday after the company’s earnings results ahead of the open. Shares are trying to find support near their 50-day line.
The company reported better-than-expected Q4 earnings and sales results. Home Depot earnings grew 16% to $2.65 a share, including 9 cents in one-time costs related to the acquisition of HD Supply. Revenue rose 25% to $32.26 billion. Same-store sales surged 24.5%, with U.S. comps up 25%.
Stock Market Earnings: Cadence, ZoomInfo
Cadence Design Systems and IBD Leaderboard stock ZoomInfo reported earnings after the close Monday.
Cadence pulled back to its 50-day line Monday amid a 4.65% fall. After the close Monday, Cadence reported strong Q4 results. The company earned an adjusted 83 cents a share on sales of $760 million in the December quarter. Analysts had predicted Cadence earnings of 74 cents a share on sales of $732 million.
Shares dropped 0.7% Tuesday midday.
ZoomInfo slid 6.25% Monday, closing below a 53.18 entry in a cup base. After the close Monday, ZoomInfo reported strong Q4 results and better-than-expected Q1 sales guidance. The stock jumped 13% Tuesday midday.
According to Leaderboard commentary, “ZoomInfo was added to Leaderboard on Feb. 1 when it cleared a short handle. But because the handle was so narrow, an alternate entry of 53.18 was also valid. The latest base was first stage, after the enterprise software company went public in June.”
Tesla rival Nio crumbled as much as 17% Tuesday midday, adding to Monday’s 7.9% stumble. Shares pared losses to about 6.8% in morning trade.
Shares broke down through their 50-day line Monday, a key sell signal. Meanwhile, shares hit the 7%-8% loss-cutting rule from their 57.30 buy point on Feb. 18.
Tesla stock threatened to extend a losing streak to four sessions Tuesday, plunging more than 13% before cutting losses to 4.1% midday. Shares broke down through their 50-day moving average line, a critical support level, on Monday.
On Sunday, Tesla stopped taking orders for the cheapest version of the Model Y Standard Range sport utility vehicle, just over a month after its launch and barely a week after a price cut, according to its website.
On Jan. 25, Tesla stock hit a record high at 900.40, after climbing as much as 93% from a 466 buy point in a cup with handle.
Dow Jones Leaders: Apple, Microsoft
Among the top Dow Jones stocks, Apple moved down 2.4% Tuesday. Apple stock is below its 10-week line, but a strong rebound back above the level would be bullish for the stock’s prospects.
On Feb. 18, the stock triggered the 7%-8% loss-cutting sell rule when it fell more than 7% below its 138.89 buy point in a cup with handle.
Meanwhile, Microsoft fell almost 1% Tuesday midday. The stock is trying to find support at its 232.96 buy point, but is below it.
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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