The Dow Jones Industrial Average was diving after a senior Federal Reserve official said interest rates may rise sooner than expected. Caterpillar (CAT) and Microsoft (MSFT) were the leading blue chips, while meme stock AMC Entertainment (AMC) reversed lower amid growing pressure.
Leaderboard name Adobe (ADBE) rallied on earnings, while gun stock Smith & Wesson (SWSI) shot past a buy point.
XFed Official Touts Early Interest Rate Hike
St. Louis Federal Reserve President James Bullard raised the prospects of interest rates rising sooner than expected amid current inflation trends.
Bullard sees an initial interest rate increase happening in 2022 if inflation picks up. This would be earlier than announced by the Federal Open Market Committee this week. The committee's consensus outlook was for up to two hikes in 2023.
"We're expecting a good year, a good reopening. But this is a bigger year than we were expecting, more inflation than we were expecting," Bullard told CNBC. "I think it's natural that we've tilted a little bit more hawkish here to contain inflationary pressures."
Nasdaq, S&P 500 Fall
The Nasdaq was faring better than the other major indexes, but still fell around 0.9%. Leaderboard stock DocuSign (DOCU) was faring best, rising more than 4%. Micron Technology (MU) fell most, dipping almost 5%.
The broad-based S&P 500 was also struggling, dipping around 1%. Power generator stock Generac (GNRC), another Leaderboard name, fared well with a 2% gain. But homebuilder Lennar (LEN) was the top performer, rising around 2.5%. Investment stock Lincoln National (LNC) was the biggest, falling around 5%.
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33391.25 | -432.20 | -1.28 |
| S&P 500 | (0S&P5) | 4178.68 | -43.18 | -1.02 |
| Nasdaq | (0NDQC ) | 14040.83 | -120.52 | -0.85 |
| Russell 2000 | (IWM) | 221.61 | -5.68 | -2.50 |
| IBD 50 | (FFTY) | 44.04 | -0.71 | -1.59 |
Last Update: 2:54 PM ET 6/18/2021 |
||||
The S&P sectors were bleeding red, with consumer discretionary, health and technology falling the least. Energy and financials were the biggest laggards.
Small caps were being mauled by the bears, with the Russell 2000 falling around 2.5%. Growth stocks were also being slapped lower, with the Innovator IBD 50 ETF (FFTY) down around 1.6%.
Dow Jones, Microsoft Stock Struggle
The Dow Jones Industrial Average was the worst-performing major index, dropping around 1.3%.
Microsoft (MSFT) was one of the top components, but still dipped 0.3%. The Leaderboard stock is trying to reach a new buy point of 263.29.
Caterpillar (CAT) was the only component posting a gain, though this was a miserly 0.1%. Chip giant Intel (INTC) was the worst laggard, falling more than 3%.
AMC Stock Forced Lower
AMC stock was swimming against the tide Friday, but ended up getting forced lower. It was down around 3%.
It had been trying to continue its recovery from Wednesday's steep drop. Nevertheless, it is on track to post a whopping weekly gain of almost 20%.
AMC stock is currently almost 500% above its 200-day moving average. When a stock rises 70% to 100% above its 200-day line, it's usually a sign of a climax run. All bets are off with this particular stock, however.
It bucked the trend in a tough day for meme stocks. GameStop (GME), the most infamous meme stock of all, fell around 3%. The computer game retail stock is currently mired in a short downtrend.
World Wrestling Entertainment (WWE), one of the latest additions to the meme stock roster, was around 2% lower. It has triggered the 7%-8% sell rule after previously trying to break out of a consolidation pattern.
Unlike many meme stocks, it boasts solid earnings. Its EPS Rating comes in at 77, underlining the popularity of a "sport" where musclebound men pretend to fight each other.
Adobe Stock Rallies, Gun Stock Passes Buy
Adobe stock gapped up on strong earnings, and, while it pared some gains, is now extended from a cup-base entry point of 525.54.
Shares also remain in potential buy range from a 536.98 buy point of a long consolidation, according to MarketSmith. The stock could post a new closing high.
Adobe easily beat Wall Street targets for its fiscal second quarter, and also guided above views for the current period.
The cloud software giant's recent strong performance has won it a spot on the prestigious Leaderboard list of leading growth stocks.
Meanwhile gun stock Smith & Wesson shot into buy zone on strong earnings. EPS spiked 242% to $1.71, while revenue grew 67% to $323 million.
It is at the top of a buy zone after breaking out of a cup with handle base. The ideal buy point is 22.60.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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Dow Jones Dives As Fed Official Touts Interest Rate Hike; AMC Stock Plunges; Adobe Rallies - Investor's Business Daily
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