Dow Jones Reverses On SVB Rescue Plan; First Republic, Charles Schwab Crash On Bank Fears

The Dow Jones Industrial Average has risen on Monday as global markets struggled with the ongoing banking crisis in the United States. All SVB Financial deposits were guaranteed by the FDIC and other financial regulators (SIVB). Signature Bank was also taken over by regulators on Sunday (SBNY). Meanwhile, despite receiving additional funding from the Federal Reserve and JPMorgan, San Francisco’s First Republic (FRC) fell 77% in morning trade (JPM). Finally, Charles Schwab (SCHW) fell 20% due to ongoing banking concerns.

On the economic front, eyes will be on the consumer price index on Tuesday. The CPI is expected to rise 0.4%, both overall and excluding food and energy. That would bring the headline CPI inflation rate down to 6% from 6.1% in January, with the core inflation rate easing to 5.5% from 5.6%.

Earnings continue trickling out at the tail end of the season this week. Among them are Academy Sports & Outdoors (ASO), Adobe (ADBE), Dollar General (DG), FedEx (FDX), Five Below (FIVE), GitLab (GTLB) and Lennar (LEN).

Stock Market Today

Drug giant Pfizer (PFEagreed to pay $43 billion for biotech Seagen (SGEN). Pfizer shares rose 0.3%, while SGEN stock soared 15%.

Genetic screening tools leader Illumina (ILMN) jumped more than 11% early, on news reports that activist investor Carl Icahn planned to nominate three persons to the company’s board of directors.

Electric-vehicle leader Tesla (TSLA) traded down more than 2% Monday morning after Wolfe Research downgraded the stock to peer perform from outperform. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were up after the stock market open.

IBD Leaderboard watchlist stock Palo Alto Networks (PANW) and New Relic (NEWR) — as well as Dow Jones stock Salesforce (CRM) — are among the top stocks to watch in the new stock market correction.

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

Dow Jones Today: Oil Prices, Treasury Yields

After Monday’s market open, the Dow Jones Industrial Average rose 0.15%, and the S&P 500 was down 0.1%. The tech-heavy Nasdaq composite rose 0.4% in morning action, with Seagen and Illumina leading the index.

Among U.S. exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) rose 0.4% and the SPDR S&P 500 ETF (SPY) dropped 0.1% early Monday.

The 10-year U.S. Treasury yield tumbled to 3.69% Friday. Then on Monday, the 10-year yield dived to 3.47% in early morning trade, as safe haven trade drove bonds sharply higher following the SVB collapse. The dollar angled lower, losing ground against the euro and the yen.

Oil prices sold off Monday morning after Friday’s brief bounce. West Texas Intermediate futures slid nearly 5% in early trade, trading below $73 a barrel early Monday. Gold and silver also moved sharply higher as investors sought solid ground. Gold jumped 1.4% to above $1,892 an ounce. Silver rallied 3.3%, clearing $21 an ounce.

Stock Market Correction

On Friday, the stock market sold off sharply, as the major stock index ended with big losses. The Dow Jones Industrial Average dropped 1.1%, and the S&P 500 declined 1.45%. The tech-heavy Nasdaq tumbled 1.8%.

Friday’s Big Picture column commented, “IBD changed its market outlook to ‘uptrend under pressure’ Thursday. And after Friday’s selloff we’ve cut our outlook further, to ‘market in correction.’ This requires investors to avoid any stock purchases and pivot to defensive trading, such as taking profits and cutting losses short.”

Now is an important time to read IBD’s The Big Picture column amid the new stock market correction.

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