Dow Jones Dives As Biden Taps Emergency Oil, Inflation Gauge Hits 39 Year High

The Dow Jones Industrial Average fell as President Joe Biden tapped the nation’s emergency oil reserves amid spiraling prices. The Fed’s favorite inflation gauge also spiked to the highest level since 1983. Cisco Systems (CSCO) was a top blue chip, while Leaderboard stock Vertex Pharmaceuticals (VRTX) gained on a positive pain treatment study.


Volume was mixed, rising on the New York Stock Exchange but falling on the Nasdaq according to preliminary data. Today marks the quarter- and month-end rebalancing by pension funds.

Meanwhile, the yield on the benchmark 10-year Treasury note fell about three basis points to 2.33%. Oil dipped sharply, with West Texas Intermediate crude falling 6.5% to around $101 per barrel.

Biden Taps Oil Reserves; Inflation Spikes Again

Oil prices fell after President Biden moved to tap the nation’s emergency supplies.

He unveiled his plan to release 1 million barrels per day from the Strategic Petroleum Reserve in a bid to cut spiraling gas prices. The reserve has typically been used for emergencies such as natural disasters.

The Democratic president’s move comes as his party seems to be struggling heading into the midterm elections.

Biden blamed Vladimir Putin and the ongoing Russia-Ukraine war for forcing his hand. Global oil prices have spiked amid wide sanctions against Russia.

“Our family budgets, your family budgets to fill a tank, none of it should hinge on whether a dictator declares war,” he said.

Meanwhile, the Federal Reserve’s preferred inflation gauge spiked to levels last seen in the early 1980s.

The core personal consumption expenditures price index popped 5.4% compared to the same time last year, its biggest jump since 1983.

Jobless claims also rose last week to 202,000. This was higher than analyst expectations.

Nasdaq Dips As Stocks Get Spanked

The Nasdaq fared best out of the major indexes, falling 1.5%. Chip giant Advanced Micro Devices (AMD) was one of the worst performers as it fell nearly 8.3%.

The S&P 500 was having slightly worse luck, dipping 1.6%. Etsy (ETSY) was among the worst laggards here as it fell 7.6%.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34677.99 -550.82 -1.56
S&P 500 (0S&P5) 4530.50 -71.95 -1.56
Nasdaq (0NDQC ) 14220.52 -221.76 -1.54
Russell 2000 (IWM) 205.36 -2.10 -1.01
IBD 50 (FFTY) 39.08 -0.37 -0.94
Last Update: 4:08 PM ET 3/31/2022

The S&P sectors were all negative. Utilities and consumer staples fared best while financials, communication services, technology and consumer discretionary were the worst laggards.

Small caps fared a bit better than the major indexes, the Russell 2000 closing down 1%.

Growth stocks were the best performers. Nevertheless, the Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, gave up 0.9%.

Dow Jones Slumps As Intel Stock Suffers

The Dow Jones Industrial Average had a painful end to the quarter. It fell about 550 points, or 1.6%.

Cisco stock was one of the better performers on the Dow Jones today, but still fell 0.5%.

Caterpillar (CAT) fared best with a 0.1% dip while Amgen (AMGN) skidded 0.3% lower.

Walgreens Boots Alliance (WBA) was the worst performer, dipping 5.6%. Intel (INTC) also struggled, falling 3.6%.

Leaderboard Stock Gets Pain Treatment Boost

Vertex Pharmaceuticals was boosted on news that it conducted a successful middle-stage study on the VX-548 pain therapy.

This new treatment could be used as an alternative to opioids if it continues to make progress. The experimental drug could now enter late-stage testing later this year.

Vertex said a high dose of the drug provided significantly greater pain relief over the first two days after surgery than a placebo. Lower doses did yield a meaningful benefit vs. a placebo in the trials.

An alternative to opioids for acute pain is desirable due to their addictive qualities. Hundreds of thousands of Americans died amid the so-called opioid epidemic.

An estimated 40% of opioid overdose deaths involved a prescription opioid, according to the Department of Health and Human Services.

VRTX stock was one of the better performers in the stock market today with a 1.7% gain to 260.97. It rose higher in its buy zone from a 255.03 entry.

Vertex is a member of the prestigious IBD Leaderboard list of leading stocks. 

Beyond Dow Jones: IPO Stock Offers Opportunity

Recent IBD Stock of the Day Dutch Bros (BROS) is worth keeping on your watchlist for now.

It has slipped back below the cup-with-handle base’s ideal entry point of 62.11. BROS is currently testing support at its short-term 10-day line, MarketSmith analysis shows.

If it can regroup and then rally back above this entry, then the consumer-spending play could offer a buying opportunity.

The firm saw same-store sales jump 10.1% in Q4 vs. the year-ago period. Analysts see adjusted EPS up 3% in 2022, before 60% growth in 2023, according to Zacks Investment Research.

The company is also investing heavily to drive further growth. Capital spending will range from $175 million to $200 million this year, including $15-$20 million for a new roasting facility to enable future growth.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.


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