The Dow Jones Industrial Average fell as the latest Federal Reserve meeting kicked off. Apple (AAPL) was flexing its muscles even as most blue chips lost ground. Coinbase (COIN) and Riot Blockchain (RIOT) tumbled as Bitcoin fell. Ford (F) nosedived after saying that supply costs are surging.
A trio of stocks showed strength as they eye buy points. Neurocrine Biosciences (NBIX), Eastern Bankshares (EBC) and WillScot Mobile Mini (WSC) are all outperforming near entries.
Volume was mixed, falling on the Nasdaq but edging up on New York Stock Exchange according to early data.
The yield on the benchmark 10-year Treasury note rose seven basis points to 3.56%. West Texas intermediate crude oil slipped nearly 2% to trade at just over $84 per barrel.
Fed Meeting Begins Amid These Fears
The latest Federal Reserve Open Market Committee meeting kicked off Tuesday. The pressure is on Fed Chairman Jerome Powell to deliver a tone that satisfies investors and other stakeholders alike.
While most economists are expecting a 75-basis-point interest-rate hike, there are fears it could be even more severe.
“The possibility of a full-percentage point rate hike cannot be entirely dismissed,” MSCI Head of Portfolio Management Research Andy Sparks said in a note to clients. “Such a move would be dramatic, however, and could trigger significant sell-offs in bonds and equities.”
He believes the FOMC will instead opt to “continue its methodical program to raise rates in a manner consistent with previous guidance.”
Nasdaq Slides As Sell-Off Intensifies
The Nasdaq composite was holding up better than other major averages. It closed off lows but still tumbled 1%. Align Technology (ALGN) was one of the worst performers, falling 4.9%.
The S&P 500 fared worst out of the major indexes with a 1.1% decline, though it pared some losses. Iron Mountain (IRM) was an especially weak performer as it skidded 9.8%.
The S&P 500 sectors were all negative, with real estate and materials the worst performers. Consumer staples and technology gave up the least ground.
Bears also battered the small caps, with the Russell 2000 finishing the session 1.4% lower.
The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, got spanked as well, sliding 1.3%.
Dow Jones Today: Apple Stock Climbs
The Dow Jones Industrial Average lost ground on its 50-day moving average as it ended the session down 1%.
Apple stock was the best performer as it turned in a gain of 1.6%. The relative strength line hit fresh heights, a bullish indicator.
Wedbush analyst Daniel Ives, who rates the stock as “Outperform” with a $220 target, gave an update on iPhone 14 sales in a Tuesday research note.
“With iPhone 14 officially hitting the shelves in Apple stores this past Friday, we are seeing ‘brisk sales’ of iPhone Pro 14 units worldwide out of the gates,” he said. “Wait times on many iPhone Pro 14 models are now four to six weeks for Apple customers and lengthening into November.”
He also said the mix of purchases for the more expensive iPhone Pro model is 85%-90% versus an iPhone 13 Pro mix in the 60%-65% range at this same stage.
Nike (NKE) got battered. It was the worst stock on the Dow Jones today after falling 4.5%. It got punished after Barclays downgraded NKE stock to “Equal Weight” from “Overweight.”
Bitcoin Cedes Level; Coinbase Stock, RIOT Dip
Coinbase stock was suffering as Bitcoin fell once again. It finished well of highs for the day after slipping 2.9%. However, COIN stock volume also fell, showing a lack of conviction.
The stock, which slashed its full-year forecast last month, is now trading below all its major moving averages. COIN shares are down about 73% since the beginning of the year.
Bitcoin is continuing to fall amid a tough environment for risky assets. It was trading around the $19,000 mark after sliding about 2% in the past 24 hours, according to CoinDesk.
Other cryptocurrency plays were also near lows for the day. The Grayscale Bitcoin Trust (GBTC) skidded about 3.1% while Bitcoin mining play Riot Blockchain (RIOT) dived 4.6%.
Ford Stock Smashed As Costs Surge
Ford stock was crashing after the firm issued a warning on Q3 costs.
The car giant said costs were $1 billion higher than expected due to inflation and supply chain issues.
Ford said shortages have affected 40,000 to 45,000 vehicles. These are mainly high-margin trucks and SUVs. It now expects to deliver the vehicles to dealers in Q4.
Nevertheless, management did affirm full-year guidance, forecasting adjusted earnings between $11.5 billion and $12.5 billion.
Ford stock was the worst performer on the S&P 500 as it gave up 12.3%. It gapped down through its 50-day line in massive volume, which is a sell signal.
Despite the poor news, Morgan Stanley retained its “Equal Weight” rating on the stock, insisting “We would be buyers on weakness below our $14 target which we are leaving unchanged.”
Market Sells Off Into Fed Decision; What To Look For
Outside Dow Jones: These 3 Stocks Show Strength
With the stock market in the grip of a correction, investors should be looking for those few equities showing strength near buy points.
Neurocrine Biosciences is near the top of a flat base after crossing a trendline entry near 106. It is shooting for an ideal entry point of 109.36, according to MarketSmith analysis.
The relative strength line for NBIX just hit a new high. It’s spiked since the Aug. 4 earnings report.
Ingrezza, Neurocrine’s biggest moneymaker, has been helping revenue exceed expectations. Its stock is a member of the prestigious IBD Leaderboard list of top stocks.
Eastern Bankshares also saw its RS line reach new heights, despite weak action on Tuesday. It is near a cup-with-handle buy point of 21.55.
The stock is in the top 7% of equities, tracked in terms of earnings performance, while this year’s modest 1% gain is better than most of the competition.
WillScot Mobile Mini was also climbing, carving out a flat base with a 43.81 buy point on its weekly chart.
Its IBD Composite Rating of 98 puts it in the top 2% of stocks in terms of overall performance.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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