Banking

Dow Falls Over 300 Points After Sell-Off In Final Hour Of Trading

The Dow Jones Industrial Average fell over 300 points in today’s stock market, while the S&P 500 also showed solid losses. Both major indexes extended losses in the final hour of trading and closed near intraday lows. The Nasdaq reversed lower in the final hour of trading and closed down over 100 points.




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The Nasdaq closed 0.9% lower. The S&P 500 fell a bit more than 1%; the Dow Jones industrials matched that decline. The Russell 2000 index declined 0.8%. Volume was lower on the Nasdaq and the NYSE vs. the close on Tuesday, according to early data.

On Wednesday, stocks were rocked as Wall Street digested the latest Federal Reserve meeting minutes. The Fed’s meeting minutes from July revealed it may possibly scale back its monthly bond buying program this year.

“Looking ahead, most participants noted that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year,” the minutes said.

Elsewhere, disappointing economic data also pushed stocks lower. Housing starts posted their biggest monthly decline since April and fell more than expected last month.

Meanwhile, reopening stocks and cyclical sector plays such as cruise lines and airlines steadied after a big sell-off on Tuesday. The 10-year Treasury yield was around 1.27% after falling 7 basis points on Friday and 4 basis points on Monday.

Dow Jones Today

On Wednesday, the Dow Jones continued to hold above its 35,000 level. The Dow’s 50-day moving average around 34,711.50 is a key support level to watch.

Salesforce.com (CRM), a Dow tech giant, broke out above its recent high of 253.50. After rising 1.7%, shares closed just below the high. The firm’s earnings results are due Aug. 25 after the close. JMP Securities analyst Patrick Walravens reiterated his outperform rating on Salesforce stock and hiked his target from 282 to 320.

Elsewhere, Home Depot (HD) rebounded on Wednesday, up 0.3% after Tuesday’s major sell off. The stock traded 4.3% lower after gapping down in heavy volume. The home improvement giant beat Q2 earnings expectations with EPS of $4.53 on sales of $41.1 billion. Analysts expected earnings per share of $4.43 on $40.4 billion in sales.

But the stock sold off after U.S. same-store sales came in light amid fewer do-it-yourself customers. This offset the fact that purchase prices actually increased amid a rise in major renovations being done by professionals.

Shares are now trading at the 50-day moving average after falling below it for the first time in almost a month.’

Elsewhere, Apple (AAPL) was among the worst Dow performers, falling 2.5%. Apple stock remains just above a trend line entry near 180. The firm is gearing up for the launch of the iPhone 13 next month.

Growth Stocks In The News

As for growth stocks, the Innovator IBD 50 ETF (FFTY) rose 1.2%, bucking the trend on Wednesday. The ETF continues to test its 50-day line for support and is currently trading slightly above that level. Stocks leading the upside in the index included TaskUs (TASK) and Upstart (UPST), up 8% and 6%, respectively.

Digital outsourcing tech company TaskUs, a recent IPO stock, has become extended from a recent 35.73 entry in a consolidation base. Shares broke out on August 11 after the firm posted better-than-expected earnings. The stock is now trading well above the 20% profit area.

Shares of Tesla (TSLA) rebounded at a key technical point on Wednesday, rising 3.5%. Shares nearly surrendered support at both their 50-day moving average and their 200-day line after gapping down and falling as much as 4% Tuesday.

Tesla stock sold off heavily earlier this week amid news that the National Highway Safety Administration opened a formal investigation into its Autopilot system. The agency claims it identified 11 crashes since early 2018 where a Tesla vehicle using Autopilot or the Traffic Aware Cruise Control have hit vehicles with flashing lights, flares, an illuminated arrow board or cones warning of hazards.

Elsewhere, Lowe’s (LOW) surged nearly 10% in heavy volume, erasing all of Tuesday’s 6% drop. Shares moved back above their 50-day line, a bullish sign. The home improvement retailer posted better-than-expected Q2 results. Analysts noted the firm’s strategy to gain more professional customers as do-it-yourself demand subsides. The stock had sold off following Home Depot’s disappointing report on Tuesday.

Follow Rachel Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.

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