All four major market indexes fought the bears today — and lost. While markets twice spent significant time in the green during the course of the day, the selling pressure became too great and the indexes sank to session lows by the closing bell. The Dow was -339.8 points, -0.96%; the S&P 500 -44 points, -0.97%; the Nasdaq -166.6 points, -1.15%; and the small-cap Russell 2000 -33.4, -1.60%.
The Russell was already trading in correction territory yesterday, and is now more than -15% from its early November ’21 highs. The tech-heavy Nasdaq joins the small-caps in correction territory, now -10% from its all-time highs last set the week before Thanksgiving, ’21. The Dow is “just” -5.5% from its highs set just two short weeks ago, while the S&P is -6.3% off its highs from the same time.
This is the shakeout many analysts had been forecasting for sometime during calendar Q1 of this year, and it is based on investors taking their medicine with the recognition that Fed monetary policy changes are nigh-ish. Bond yields are the tea leaves analysts are reading: the 10-year yield is currently 1.87% and the 2-year is 1.06% — both at the highest levels in literally two years, or an entire pandemic ago.
United Airlines UAL has reported Q4 results after the closing bell this Hump Day, with better-than-expected numbers on both top and bottom lines: -$1.60 per share, while still a loss, was far better than the -$2.23 Zacks consensus estimate, and a significant improvement over the year-ago Covid-plagued quarter, where it reported -$7.00 per share. This markets the third straight quarterly positive surprise after four straight misses.
It’s been a rough five years for the Zacks Rank #4 (Sell)-rated United, which has seen its share price dwindle -41% over that time period. There is demand being once again pent-up for air travel, but the question is: when will people again feel safe to fly around the country or around the world, either for business or for pleasure?
Although we’ve been calling for this over the past couple days, getting out your shopping list for great companies you haven’t yet bought because you found them too expensive — or holdings you already have you’d wish to add to for the same reason — remains the smart play. No one is sure how deep this sell-off is expected to get, but with the housing market coming back strong, and full employment back within our sights, there is for sure an economic backstop already baked in.
Tomorrow morning brings us new weekly jobless claims data, which have been among our first looks at how the Omicron variant has affected the labor force. We’ll also see a new Philly Fed report for January, and Existing Home Sales for December after the opening bell.
Questions or comments about this article and/or its author? Click here>>
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.3% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>
Click to get this free report
United Airlines Holdings Inc (UAL): Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com