May 21, 2024

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Dow Jones Slides On Strong Jobs Report; Silicon Valley Bank Crashes 66% On Bank Run Fears

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Dow Jones Slides On Strong Jobs Report; Silicon Valley Bank Crashes 66% On Bank Run Fears

The Dow Jones Industrial Average briefly dropped more than 175 points Friday, as investors digested a stronger-than-expected jobs report from the Labor Department. SVB Financial (SIVB), holding company for Silicon Valley Bank, crashed another 66% early Friday morning on growing fears of a bank run before the stock was halted.




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Late Thursday, Bloomberg reported that venture-capital funds, including Peter Thiel’s Founder Fund, were advising their portfolio companies to withdraw their money from Silicon Valley Bank. Friday’s early plunge follows Thursday’s 60% crash that sent shares close to their lowest level since Sept. 2016.

A pivotal jobs report from the Labor Department showed that the U.S. economy added 311,000 jobs in February, more than expected, with an unemployment rate of 3.6%, higher than estimates. Econoday estimates forecasted 220,000 in February nonfarm payrolls, with an unemployment rate of 3.4%.

On the earnings front, DocuSign (DOCU), Gap (GPS), Oracle (ORCL) and Ulta Beauty (ULTA) were on the move Friday morning.

DocuSign tumbled 16% after the company announced that CFO Cynthia Gaylor is departing the company. The e-signature provider reported better-than-expected Q4 results. Gap dived 9% after the company’s Q4 results.

Oracle sold off 2.4% on mixed Q4 results. Finally, Ulta shares inched higher Friday morning after reporting lower-than-expected comparable sales guidance. The company topped Q4 earnings and sales estimates.

Stock Market Today

EV giant Tesla (TSLA) traded down 0.5% Friday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower after the stock market open.

IBD Leaderboard watch list stock Palo Alto Networks (PANW) and New Relic (NEWR) — as well as Dow Jones stocks American Express (AXP) and Salesforce (CRM) — are among the top stocks to watch amid a struggling stock market rally.

Palo Alto is an IBD Leaderboard watch list stock. New Relic was recently an IBD Stock Of The Day. And Salesforce was featured in this week’s Stocks Near A Buy Zone column.


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Dow Jones Today: Oil Prices, Treasury Yields

After Friday’s market open, the Dow Jones Industrial Average fell 0.3%, and the S&P 500 was down 0.7%. The tech-heavy Nasdaq composite lost 1% in morning action.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 1.1% and the SPDR S&P 500 ETF (SPY) moved down 0.7% early Friday.

The 10-year U.S. Treasury yield dropped to 3.92% Thursday. Then Friday, the 10-year yield dived to 3.75% after the jobs report.

Oil prices continued to fall Friday morning after three days of losses, with West Texas Intermediate futures dropping around 1%. WTI futures traded just below $75 a barrel early Friday.

Stock Market Rally

On Thursday, the stock market sold off sharply, as the major stock index ended with big losses. The Dow Jones Industrial Average dropped 1.7%, and the S&P 500 declined 1.85%. The tech-heavy Nasdaq tumbled 2.05%.

Thursday’s Big Picture column commented, “The stock market sold off sharply despite a surprise jump in weekly jobless claims, as investors hunkered down ahead Friday’s pivotal February jobs report. The S&P 500 broke down below its 50-day support level.”

Now is an important time to read IBD’s The Big Picture column amid the now-struggling stock market rally.


Five Dow Jones Stocks To Buy And Watch Now


Dow Jones Stocks To Watch: American Express, Salesforce

American Express is falling further away from a 182.25 buy point in a giant cup with handle amid a four-day losing streak, according to IBD MarketSmith chart analysis. Bullishly, the stock’s relative strength line is holding near its highs, a particularly positive sign in a tough market environment. AXP stock fell 1.3% Friday morning.

JPM stock shows a 92 out of a perfect 99 IBD Composite Rating, per the IBD Stock Checkup. The Composite Rating is designed to help investors easily find top growth stocks.

Last week, Dow Jones leader Salesforce staged a bullish breakaway gap past a 178.94 buy point on strong fourth-quarter results. But breakout gains have disappeared and shares are back below their buy point. Still, the stock’s recent strength is a reason to monitor the software leader in the coming sessions. CRM stock lost 0.2% Friday.


4 Top Growth Stocks To Buy And Watch In The Stock Market Rally


Top Stocks To Buy And Watch: Palo Alto, New Relic

IBD Leaderboard watch list stock Palo Alto Networks continues to trade quietly in the handle after the stock’s 12.5% surge on Feb. 22. Shares remain within striking distance of a base’s 193.01 buy point. PANW stock traded down 0.1% Friday morning.

Backstory: On Feb. 21, the cybersecurity giant announced good results for the January-ended quarter that saw earnings hit $1.05 a share, up 81% vs. a year earlier, on a 26% jump in revenue to $1.7 billion.

Recent IBD Stock Of The Day, New Relic, is working on a flat base with a 80.98 buy point in the aftermath of the Feb. 8 earnings-fueled surge. NEWR stock was down 0.4% Friday.

Backstory: New Relic provides a cloud-based suite of software products that enables organizations to collect, store and analyze massive amounts of data in real time. Customers gain increased visibility into their enterprise software to help make data-driven decisions.


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Stocks To Watch In Stock Market Rally

These are five top stocks to watch in today’s stock market, including two Dow Jones leaders.

Company Name Symbol Correct Buy Point Type Of Buy Point
New Relic (NEWR) 80.98 Flat base
American Express (AXP) 182.25 Cup with handle
Palo Alto Networks (PANW) 193.01 Consolidation
JPMorgan (JPM) 138.76 Flat base
Salesforce (CRM) 178.94 Cup with handle
Source: IBD Data As Of March 9, 2023

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live


Tesla Stock

Tesla stock skidded another 5% Thursday, dropping for a fourth-straight day. Shares are on pace for an over-12% drop this week and closed Thursday around 55% off their 52-week high.

Tesla shares lost 0.5% Friday, still threatening to add to Thursday’s losses.

Dow Jones Leaders: Apple, Microsoft

Among Dow Jones stocks, Apple shares declined 1.5% Thursday, set to end the week with a slight loss. The stock fell 0.5% early Friday.

Microsoft shares extended a losing streak to three sessions, with a 0.5% fall Thursday. The stock is still around 20% off its 52-week high after recent declines. MSFT stock moved down 0.7% Friday morning.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the Dow Jones Industrial Average.

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