The stock market remained near session lows at midday as the energy sector collapsed on fears that a Covid-19 lockdown in China will spread.
The S&P 500 fell 1.5%. The Nasdaq composite was down 0.8%. The Dow Jones Industrial Average fell 1.2%. The small-cap Russell 2000 lost 1.6%.
Volume rose sharply on the NYSE and Nasdaq compared with the same time on Friday.
The U.S. stock market losses paled in comparison with China.
U.S. Stock Market Today Overview
|Last Update: 12:04 PM ET 4/25/2022|
The Shanghai Composite plummeted 5.1% in the largest one-day drop for the index since Feb. 3, 2020. The mainland China index is now down nearly 52% from its record high in October, 2007, according to Dow Jones Market Data.
China’s Covid-19 Lockdown Spreads, Dragging Stock Market Down
Chinese shares came under more selling as authorities impose lockdowns in many cities, and residents of Beijing prepare for a possible lockdown.
The price of U.S. crude oil fell 6%, to $96.08 a barrel. The lockdown has sapped demand for oil in China. It’s the first time oil trades below $100 a barrel since April 13.
The Energy Select Sector SPDR ETF (XLE) slid 5.6%, gapping below its 50-day moving average. The ETF is also below the 80.32 buy point of a flat base it cleared last week.
Chevron (CVX) gapped below its 50-day line in active trading. Oil stocks Occidental Petroleum (OXY), Marathon Oil (MRO), Range Resources (RRC) and Callon Petroleum (CPE) all fell between 5% and 10%.
The Innovator IBD 50 ETF (FFTY) tumbled 3%. New member Silicon Motion (SIMO) soared 10% in huge volume after Bloomberg reported the memory-chip maker is exploring a sale. A deal could be valued at $2.7 billion. The stock is forming a cup base with a 96.99 buy point.
Just about every other IBD 50 stock was down.
Twitter Gains On Reports Sale Could Be Imminent
Twitter (TWTR) gained 3.4% in heavy trading. The social media company is in advanced talks on a sale to Tesla (TSLA) CEO Elon Musk, and a deal could be finalized Monday, The Wall Street Journal reported.
Network security stocks led the upside for the technology sector. Fortinet (FTNT) gained 3.8%. The stock is building a base with a buy point of 371.87 and found support at the 200-day line. Palo Alto Networks shot up 3.3% and remained in its buy zone from a 572.77 buy point off a consolidation. It found support at the 50-day line, too. Both stocks continue to gain from the war between Russia and Ukraine, which has increased worries of cyberattacks.
The S&P Technology Select Sector ETF (XLK) was the least affected, down 0.5%.
Coca-Cola (KO) erased early gains and was down 0.6% after the company beat first-quarter expectations. Coke maintained its full-year earnings guidance, which includes expectations that commodity-cost increases will be hit by headwinds as the global supply crunch continues.
A breakout for Dow component Verizon Communications (VZ) failed after shares fell 4%, below the 54.80 buy point.
Follow Michael Molinski on Twitter @IMmolinski
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