The U.S. stock market plunged Thursday after the consumer price index showed the highest inflation rate since 1982. But indexes came off session lows at midday.
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A day after posting strong gains, the Nasdaq composite lost 1.8%, the S&P 500 1.2% and the Dow Jones Industrial Average 1.1%. The small-cap Russell 2000 fell 1.3%.
Volume fell on the NYSE and Nasdaq compared with the same time on Wednesday.
Amazon.com (AMZN) gapped up and rallied 4.4% after the online retailer and cloud tech company announced a 20-for-1 stock split and authorized a $10 billion stock buyback. Amazon stock will start reflecting the split on June 6.
But inflation headlined the news for the stock market. The Labor Department said the CPI rose 0.8% in February from the prior month. It jumped 7.9% vs. a year ago, the biggest annual gain since January 1982. The core CPI, which removes food and energy prices, rose 0.5% from January and 6.4% from a year ago. That’s the highest since August 1982.
Inflation, Ukraine Top Investors’ Minds
“Households are being battered by rising costs for almost everything, and their spending power is disappearing at a rapid pace,” said Joel Naroff, president and chief economist at Naroff Economics, in a report.
The inflation numbers were in line with forecasts, although overall consumer inflation came in above the consensus estimate for a 0.7% monthly increase.
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 32923.17 | -363.08 | -1.09 |
| S&P 500 | (0S&P5) | 4226.27 | -51.61 | -1.21 |
| Nasdaq | (0NDQC ) | 13013.63 | -241.92 | -1.83 |
| Russell 2000 | (IWM) | 197.60 | -2.68 | -1.34 |
| IBD 50 | (FFTY) | 36.87 | -0.40 | -1.07 |
| Last Update: 12:06 PM ET 3/10/2022 | ||||
Separately, the Labor Department reported that initial claims for jobless benefits rose 11,000 to 227,000 in the week through March 5, slightly worse than the 218,000 expected.
Average hourly earnings are up a strong 5.1% from a year ago as the job market has tightened, Labor Department data shows. But real, or inflation-adjusted, wages still aren’t close to keeping up with inflation.
Russia’s attack on Ukraine only makes matters worse.
As a report said in the Wall Street Journal today, “War is once again disrupting supply, boosting military spending, and threatening to sustain rising prices around the world.”
Energy and oil stocks regained most of their losses from Wednesday’s dip in oil prices. The SPDR Energy Select ETF (XLE) gained 2%, and the price of U.S. crude oil jumped 1.2% to $110 a barrel. Oil sold off about 12% Wednesday after ramping up the previous six days in what was starting to look like a climax run.
Oil Suppliers And Fertilizers Continue To Surge
Oceaneering International (OII), which provides deepwater engineered services to the offshore oil and gas industry, jumped 4% into its buy range. It broke out of a double-bottom base with a buy point of 16.46 Monday initially and had dipped below the entry.
Fertilizer company CF Industries (CF) jumped 4%. On Monday, it was named the IBD Stock of the Day as it faces a supply crunch brought on by Russia’s invasion of Ukraine. Still, the stock has cleared a level at which investors should consider locking in at least some profits.
But other major stocks fell. Tesla (TSLA) and Apple (AAPL) each dropped about 4%. Microsoft (MSFT) fell 2.4%. Alphabet (GOOGL) lost 1.4%. Invesco QQQ Trust (QQQ) slid 1.3%. The Innovator IBD 50 ETF (FFTY) fell 1.5%.
LSB Industries (LXU), a new IBD 50 company, led with a 10% jump to new highs. It is well extended. The company makes fertilizers and chemicals for mining and industrial customers.
CrowdStrike Holdings (CRWD) soared more than 11% after the cybersecurity firm’s January-quarter profit and revenue easily beat estimates. The company’s fiscal 2023 guidance was well above expectations, too. CrowdStrike shares climbed above the 50-day moving average but still have a lot of repair to do.
Fossil Group (FOSL) plunged 36%, breaking below the 50-day moving average, in huge volume. The maker of personal accessories, whose brands include Armani Exchange and Michael Kors, reported a 237% rise in adjusted earnings to 64 cents a share. Sales increased 14% to $604.2 million. Fossil forecast worldwide net sales growth of 2% to 6%, with stronger growth coming in the second half of the year.
FOSL shares are on track to hit the lowest close since Jan. 20, 2021, when it closed at 9.18.
Follow Michael Molinski on Twitter @IMmolinski
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