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Dow Jones Jumps After Coronavirus Triggers Stock Market Correction; Disney, Salesforce, Virgin Galactic, Insulet, TJX Move On News
The Dow Jones Industrial Average rose sharply Wednesday morning, along with the S&P 500 index and Nasdaq composite, as bulls try to mount a rebound. But a stock market correction has taken hold after several days of heavy losses. Meanwhile, several notable stocks broke or tested key levels on news.
Disney (
DIS) CEO Bob Iger announced late Tuesday that he'll step down immediately.
Salesforce.com (
CRM),
Virgin Galactic (
SPCE),
Insulet (
PODD),
Toll Bros. (
TOL) and
Planet Fitness (
PLNT) reported earnings after the close.
Disney stock fell modestly to a 10-month low. Salesforce stock, Virgin Galactic stock, Insulet stock, Toll Bros. stock and Planet Fitness stock all fell. Several signaled declines through buy points or key support.
In other news,
TJX Cos. (
TJX) reported strong earnings.
Tesla (
TSLA) and Panasonic reportedly ended their solar cell production joint venture in Buffalo, with signs of a broader rupture possible. TJX stock jumped while Tesla stock fell modestly.
Dow Jones Today
The Dow Jones rose 0.7%, the S&P 500 index 0.7% and the Nasdaq composite 1%. Those are off their best levels and follows a volatile overnight session.
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Coronavirus News
Coronavirus cases have topped 81,000, with deaths above 2,700. While the vast majority of Covid-19 cases and deaths are in China, new cases are slowing in that country, with few new infections outside of the Hubei province epicenter. China confirmed 406 new cases, with 401 in Hubei.
However, coronavirus cases are expanding in South Korea, Japan, Italy and the Middle East. Korea's virus cases rose to 1,261, with a U.S. soldier stationed in the country testing positive. Italy has 374 virus cases. Brazil confirmed a coronavirus case, the first Covid-19 infection in Latin America. All that raises fears of a global pandemic that will chill global economic growth and supply chains.
A top CDC official said Tuesday that the coronavirus likely will become a global pandemic.
Coronavirus Stock Market Correction
The current stock market rally has suffered four straight down days, with major losses in the last two sessions. This kind of rapid, heavy selling through moving averages is a clear vertical violation. IBD now labels the current market as a stock market correction.
On Tuesday, the Dow Jones Industrial Average fell 3.15%, the S&P 500 index 3% and the Nasdaq composite 2.8%. The Dow Jones plunged below its 200-day line, a day after the major indexes undercut their 50-day lines. The S&P 500 index and Nasdaq composite undercut their late January lows, during the first wave of coronavirus selling.
Among the
best ETFs, the Innovator IBD 50 ETF (
FFTY) slid 3%. The iShares Expanded Tech-Software Sector ETF (
IGV) fell 2.8%. The VanEck Vectors Semiconductor ETF (
SMH) lost 2.9%.
The stock market rally already was under pressure as of Monday's tumble. After Tuesday, it's a stock market correction. After several days of heavy selling, the
Dow Jones today and other major indexes could bounce back, but one or two good days doesn't make for a confirmed stock market rally.
With Tuesday's continued coronavirus market sell-off, it's crucial to read
The Big Picture to understand the current stock market direction.
Disney CEO Bob Iger Steps Down
Bob Iger will step down immediately, Disney announced late Tuesday. Last year, Iger said that he planned to step down from the Dow Jones media giant in 2021. Bob Chapek, chairman of Disney Parks, Experiences and Products, takes over as CEO. Iger will remain as chairman through 2021 and handle Disney's creative efforts.
Disney stock fell 1.1% in morning trade, as investors reacted to the departure of a long-serving, well-regarded CEO. Disney stock briefly hit its lowest level since April 2019, when it gapped up on Disney+ plans. Disney stock fell 3.6% on Tuesday after tumbling 4.3% on Monday, but it had been trending lower since late November amid rising expenses for Disney+.
Salesforce Earnings Top, Co-CEO Exits
Salesforce earnings were 66 cents a share, down 6% vs. a year earlier. Revenue grew 35% to $4.85 billion, including its Tableau takeover. Wall Street expected Salesforce earnings of 56 cents on sales of $4.75 billion.
The software giant guided in line.
Meanwhile, co-CEO Keith Block will step down. Block was seen as a successor to Salesforce founder and co-CEO Marc Benioff.
Salesforce stock fell 2% early Wednesday. CRM stock is below its 50-day line, but holding above a 167.66 buy point. Salesforce stock fell 2.5% on Tuesday.
Virgin Galactic Earnings
Virgin Galactic reported continued losses as revenue came in at $528,000, less than expected. The publicly traded space company said it would start taking
new reservations for space flights with a $1,000 deposit.
SPCE stock retreated 7.3%. But on a chart, SPCE stock still looks fine, holding relatively steady after going almost vertical for much of 2020.
Insulet Earnings
Insulet earnings fell 50% to 8 cents a share as revenue rose 27% to $209.4 million. Analysts expected Insulet earnings of 9 cents on sales of $197 million.
Insulet stock fell 5.5% to 185.82. PODD stock has undercut a 187.35 flat-base buy point and its 50-day line. Insulet stock fell 5.1% on Tuesday, as rival insulin pump maker
Tandem Diabetes (
TNDM) plunged 10% on its mixed results.
Planet Fitness Earnings
Planet Fitness earnings rose 29% to 44 cents a share. Revenue grew 10% to $191.5 million. Wall Street expected Planet Fitness earnings of 41 cents and revenue of $189 million. But the low-cost
gym operator gave cautious guidance.
Planet Fitness stock fell 5.2% early Wednesday, below an 81 buy point and its 50-day. On Tuesday, Planet Fitness stock sank 3.6% to 75.25 after dropping 3.75% on Monday.
Toll Brothers Earnings
Toll Brothers earnings fell 46% to 41 cents as revenue fell 2%, both missing views. Toll Brothers stock plunged 12% in morning trade, below its 50-day line and 41.80 buy point. Toll Brothers stock had tumbled 5.7% on Tuesday.
Please follow Ed Carson on Twitter via @IBD_ECarson for stock market updates and more.
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