The Dow Jones Industrial Average fell as President Joe Biden tapped the nation’s emergency oil reserves amid spiraling prices. The Fed’s favorite inflation gauge also spiked to the highest level since 1983. Cisco Systems (CSCO) was a top blue chip, while Leaderboard stock Vertex Pharmaceuticals (VRTX) gained on a positive pain treatment study.
Volume was lower on both the New York Stock Exchange and the Nasdaq. This is a positive on a down day, especially as today marks the quarter- and month-end rebalancing by pension funds.
Meanwhile, the yield on the benchmark 10-year Treasury note fell about four basis points to 2.32%. Oil dipped sharply, with West Texas Intermediate crude dipping about 7% to around $100 per barrel.
Biden Taps Oil Reserves; Inflation Spikes Again
Oil prices fell after President Biden moved to tap the nation’s emergency supplies.
He unveiled his plan to release one million barrels per day from the Strategic Petroleum Reserve in a bid to cut spiraling gas prices. The reserve has typically been used for emergencies such as natural disasters.
The Democratic president’s move comes as his party looks to be struggling heading into the midterm elections.
Biden blamed Vladimir Putin and the ongoing Russia-Ukraine war for forcing his hand. Global oil prices have spiked amid wide sanctions against Russia.
“Our family budgets, your family budgets to fill a tank, none of it should hinge on whether a dictator declares war,” he said.
Meanwhile, the Federal Reserve’s preferred inflation gauge spiked to levels last seen in the early 1980s.
The core personal consumption expenditures price index popped 5.4% on the same time last year, its biggest jump since 1983.
Jobless claims also rose last week to 202,000. This was higher than analyst expectations.
Nasdaq Dips As Tech Stocks Lag
The Nasdaq was faring best out of the major indexes, giving up 0.5%. Chip giant Advanced Micro Devices (AMD) was one of the worst performers as it fell nearly 8%.
The S&P 500 was having slightly worse luck, dipping 0.6%. Etsy (ETSY) was among the worst laggards here as it fell more than 6%.
U.S. Stock Market Today Overview
|Last Update: 2:48 PM ET 3/31/2022|
The S&P sectors were mixed. Utilities and consumer staples were making the best gains. Technology and consumer discretionary were the worst laggards.
Small caps were outshining the major indexes a touch, with the Russell 2000 dipping 0.4%.
Growth stocks were faring best of all, though. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, was up 0.2%.
Dow Jones Falls As Cisco Stock Gains
The Dow Jones Industrial Average fared worst out of the major indexes. It fell more than 200 points, or 0.7%.
Cisco stock was one of the top gainers on the Dow Jones today, though it was up less than 1%. It was fighting it out with Caterpillar (CAT) and Amgen (AMGN), which posted similar gains.
Walgreens Boots Alliance (WBA) was the worst performer, dipping almost 5%. Intel (INTC) also struggled, falling around 3%.
Leaderboard Stock Gets Pain Treatment Boost
Vertex Pharmaceuticals was boosted on the news that it conducted a successful middle-stage study on the VX-548 pain therapy.
This new treatment could be used as an alternative to opioids if it continues to make progress. The experimental drug could now enter late-stage testing later this year.
Vertex said a high dose of the drug provided significantly greater pain relief over the first two days after surgery than a placebo. Lower doses did yield a meaningful benefit vs. a placebo in the trials.
An alternative to opioids for acute pain are desirable due to their addictive qualities. Hundreds of thousands of Americans died due to the so-called opioid epidemic.
An estimated 40% of opioid overdose deaths involved a prescription opioid, according to the U.S. Department of Health and Human Services.
VRTX stock was up more than 2% as it rose higher in its buy zone from a 255.03 entry.
Vertex is a member of the prestigious IBD Leaderboard list of leading stocks.
Beyond Dow Jones: IPO Stock Offers Opportunity
Recent IBD Stock of the Day Dutch Bros (BROS) is worth keeping on your watchlist for now.
It has slipped back below the cup-with-handle base’s ideal entry point of 62.11. BROS is currently testing support at its short-term 10-day line, MarketSmith analysis shows.
If it can regroup and then rally back above this entry, then the consumer-spending play could serve as a buying opportunity.
The firm saw same-store sales jump 10.1% in Q4 vs. the year-ago period. Analysts see adjusted EPS up 3% in 2022, before 60% growth in 2023, according to Zacks Investment Research.
The company is also investing heavily to drive further growth. Capital spending will range from $175 million to $200 million this year, including $15-$20 million for a new roasting facility to enable future growth.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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The post Dow Jones Falls As Biden Taps Emergency Oil, Inflation Gauge Hits 39-Year High; Pharma Leader Pops appeared first on Investor’s Business Daily.