Dow Jones Falls Ahead Of Fed Rate Hike Decision, Powell Comments; GameStop Soars 53% On Surprise Profit
The company's shares had been under pressure after weak earnings and concerns about the future of the video game industry.
The Dow Jones Industrial Average fell Wednesday, ahead of the Federal Reserve's decision to raise rates and Fed Chair Jerome Powell’s comments. GameStop (GME), a retailer, soared up to 53% after a surprise profit. However, it was trimmed.
Wednesday is the last day of Federal Reserve's two-day meeting. As rescue efforts for many U.S. community and regional banks continue to be insufficient, the Federal Reserve might not raise its target interest rates. Our page has the most recent market coverage.
Markets had already priced in 88% of a quarter point rate increase at Wednesday's Federal Reserve meeting. This would raise the Fed's key rate to 4.75% to 5.5%. Goldman Sachs economists still believe that the Fed will stop raising rates "because of stress within the banking system".
At 2 p.m., the Fed will announce its rate hike decision. Powell's comments are expected at 2:30 p.m. ET. Powell's remarks are expected at 2:30 PM. (For the most recent coverage of market action, visit our page.
Wednesday morning earnings movers included Array Technologies (ARRY), GameStop (NKE), Nike (NKE), Ollie's Bargain Outlets (OLLI), Winnebago and Winnebago.
Morning action saw Winnebago share prices rise 6%
GameStop beat all expectations regarding fourth-quarter earnings on Tuesday. It reported its second positive quarter in 12 quarters. The adjusted earnings rose to 16 cents per shared, compared with a 47-cent loss in the previous year. Net sales fell 1.2% to $2.226 million. Analysts had expected GameStop would report a 13-cent loss per share due to a 3.2% decline in revenue to $2.18 million.
After a series of price targets hikes during Nvidia's 2023 GPU Technology Conference, chip leader Nvidia (NVDA), rose more than 2%. The stock price of electric-vehicle titan Tesla (TSLA), was 0.3% lower on Wednesday. After today's stock exchange open, Dow Jones tech giants Apple and Microsoft (MSFT), were mixed.
The top stocks to keep an eye on in the current stock market correction include chip leader Advanced Micro Devices, IBD SwingTrader stock Meta Platforms and IBD Leaderboard Palo Alto Networks.
Palo Alto is an IBD leaderboard stock. This week's Stocks Near A Buy Zone column featured Microsoft. Meta is also an IBD SwingTrader stock.
Dow Jones Today: Treasury Yields, Oil Prices
The Dow Jones Industrial Average dropped 0.1% after Wednesday's opening bell. The S&P 500 fell 0.15%. In morning action, the tech-heavy Nasdaq composite fell 0.2%, with Google-parent Alphabet(GOOGL) falling more than 1%.
The Nasdaq 100 tracker Invesco QQQ Trust, (QQQ), fell 0.15% while the SPDR S&P500 ETF (SPY), moved down 0.1% on Wednesday morning.
On Tuesday, the 10-year U.S. Treasury yield rose to 3.6%. The 10-year U.S. Treasury yield rose to 3.6% Tuesday. On Wednesday, it ticked higher to 3.62%, ahead of the Fed rate decision.
U.S. oil prices fell after gains on Tuesday pushed West Texas Intermediate above $69 per barrel. WTI futures fell 0.6% Wednesday morning, trading just above $69 per barrel ahead of the Energy Information Administration's weekly oil inventories.
Stock Market Correction
The Nasdaq composite rose 1.6% Tuesday while the S&P 500 rose 1.3% The Dow Jones Industrial Average gained 1%.
Tuesday's Big Picture column stated, "Leaderboard has been lightly invested in advance of Wednesday's policy statement. However, individual growth stocks have seen a significant improvement in their performance. There should be plenty of opportunity to increase exposure, particularly if the market conditions improve. Exposure should not exceed 20% until the market is more stable.
Dow Jones Stocks to Watch: Nike and Salesforce
Nike shares have risen as high as 59% since Oct. 3's bottom to reach their current high of 131.31. According to IBD MarketSmith pattern recognition, the stock is now consolidating within a flat basis that offers a buy point of 131.41. NKE stock fell nearly 1% Wednesday morning after the company's earnings results.
The stock bullishly recovered its 50-day moving mean, which is a crucial benchmark, following Tuesday's rise. During the rapid market correction, the relative strength line has also been holding strong.
After strong fourth-quarter results, Dow Jones leader Salesforce has shown significant upside strength in recent weeks. After last week's huge gains, the stock has risen to a 178.94 cup with handle entry. The market is still in correction so investors should not make new purchases until the market improves. CRM stock fell 0.1% on Wednesday morning.
Top Stocks To Watch: AMD, Meta, Palo Alto
Advanced Micro Devices made a break out of the 89.04 buy level in a flat base last Thursday and still has an 8% cushion above its entry, despite two consecutive days of losses. The 5% buy range reached 93.49. AMD stock fell 0.2% Wednesday morning.
AMD however, tempered this news with a more positive outlook for the current period.
After Tuesday's 2.2% rally, Facebook-parent Meta Platforms is now back in the buy zone above a flat base at 197.26 buy points. The 5% buy zone is now at 207.12. META stock rose 0.8% on Wednesday morning.
Backstory: Meta, like its social media competitors, is experiencing a sharp decline in advertising revenue due to clients' concerns about macroeconomic factors, recession fears, and higher interest rates. It is doing this as it invests billions in a risky gamble to create the "metaverse," which is a virtual reality world that has yet take root.
Palo Alto Networks, an IBD Leaderboard stock, surpassed a cup with-handle's 192.94 buy point during Tuesday’s 2.7% increase. The buy zone is 202.59. PANW stock fell 0.2% Wednesday.
February 21st saw earnings for the January-ended quarter hit $1.05 per share. This is 81% more than a year ago and 26% higher than the $1.7 billion revenue.
These four stocks are worth your attention in today's stock exchange, which also includes two Dow Jones leaders.
Salesforce (CRM), 178.94 Cup
Source: IBD Data as of March 21, 2023
Tesla stock rose 7.8% Tuesday, continuing its bullish rebound from the 50-day moving mean. Stocks closed Tuesday at 49% below their 52-week peak.
The stock of TSLA fell 0.3% Wednesday morning as it continued Tuesday's rise.
Dow Jones Leaders: Apple and Microsoft
Apple shares increased 1.2% Tuesday among Dow Jones stocks. This was in addition to Monday's 1.55% gain. The shares closed at the highest level since Sept. 12. AAPL rose 0.3% Wednesday.
Microsoft shares rose above the flat base's 276.86 purchase point on Friday. During this week's losses, however, the stock lost that entry. MSFT stock dropped 0.2% on Wednesday morning.