The Dow Jones Industrial dipped, but the Nasdaq fell hardest, after Treasury Secretary Janet Yellen issued a warning about the economy overheating. Apple (AAPL) stock tumbled to a key support level, while automated vacuum cleaner leader iRobot (IRBT) sunk amid concerns about costs.
Technology stocks were getting hit hard, but some names were managing to make progress despite the tricky conditions. Caterpillar (CAT) and Dow Inc. (DOW) were the leading blue chips, while MarineMax (HZO) sailed closer to a buy point.
Treasury Secretary Yellen Warns On Economy
Yellen caused market jitters after she warned interest rates may have to be raised to protect the economy from overheating. She said care had to be taken due to the trillions in stimulus spending under President Biden.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat.” she said at the Atlantic’s Future Economy Summit. “Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates.”
In addition to $5.3 trillion in stimulus spending, the Biden Administration wants to spend $2.3 trillion on infrastructure, as well as a $1.8 trillion on child care and education.
Despite her warning, she also said she believes the government spending will ultimately be a good thing as the “economy will grow faster because of them.”
The 10-year Treasury yield fell about 3 basis points to around the 1.58% mark. The 30-year Treasury yield also fell.
Nasdaq Falls Hard, S&P 500 Slips
The tech-heavy Nasdaq was lagging the other major indexes, falling around 2.4%. It is now looking for support at its 50-day moving average. Dating stock Match Group (MTCH) was the biggest laggard, falling almost 8%. Moderna (MRNA) gave up more than 6%.
U.S. Stock Market Today Overview
Last Update: 1:14 PM ET 5/4/2021
The S&P 500 also fell, slipping 1%. The biggest laggard here was lasers maker IPG Photonics (IPGP), which gave up more than 10% following its earnings report.
The S&P sectors were largely negative. Technology was the biggest laggard, with communication services close behind. Energy and financials were managing to make gains.
Small caps were slapped lower. The Russell 2000 was down around 1.6% on the stock market today.
Growth stocks were faring even worse, with the Innovator IBD 50 ETF (FFTY) giving up around 2.1%.
Dow Jones Slips, Apple Stock Falls
The Dow Jones Industrial Average performed relatively better, down only 0.2%.
Apple was the biggest laggard on the Dow, falling more than 4%.
The move saw it fall sharply, and it is now looking for support at its 50-day line. Its drop also saw it lose a lot of ground on a cup-with-handle buy point of 135.63, according to MarketSmith analysis.
Dow Inc. was once again among the best performing components. The chemicals stock was up 1.8%. However it was Caterpillar that was faring best, as it posted a gain of just over 2%.
IRobot Stock Dives
Home cleaning robot maker iRobot was suffering despite serving up earnings and revenue that bested analyst estimates.
The stock gapped down, and crashed through its 200-day moving average. It was struggling to pare its losses, and remained down more than 12%. The Bedford, Mass.-based company faces concerns over shipping and component costs.
MarineMax Stock Sails Higher As DDS Does This
MarineMax stock sailed closer to a cup-base buy point of 64.09, according to IBD MarketSmith chart analysis. Shares moved more than 2% higher, and its relative strength line was also spiking.
The boat and yacht retailer was given a boost after agreeing to buy yacht maker Cruisers Yachts. The firm has been growing amid the coronavirus pandemic, and the $63 million deal for Cruisers Yachts should allow it to grow more.
MarineMax runs 77 retailer dealership locations. It also operates marina storage services. HZO was the IBD Stock Of The Day for Monday.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.