Wall Street suffered a vicious sell-off in Monday’s trading session with the Dow Jones Industrial Average dipping into a correction territory, when the index shed nearly 1,600, or 6.3% at one point. This marks the biggest one-day drop for the Dow in its 122-year history. At this level, the blue-chip index fell more than 10% from its recent peak notched on Jan 26, officially marking a correction.
However, the losses recovered slightly closing the day with 1,175 points or 4.6% drop, its steepest decline since August 2011. The steep sell-off sent the index into a negative territory for the year, eroding all the powerful gains made so far. The Dow Jones is currently down 8.5% from its peak and 1% for this year.
Though negative concerns started to build up early last week, the panic in the stock market began Friday when the blue-chip index notched its worst day since the Brexit mayhem of June 2016, tumbling 666 points or 2.5%. The slide came following the January job report, which shows the strongest wage growth in more than eight years that sparked fears of inflation, sending Treasury yields higher.
Notably, the 10-year Treasury yield jumped to as much as a four-year high of 2.88% in Monday’s trading session, dulling the appeal of the equities over bonds.
Investors are worried that rising inflation could push the Fed to raise interest rates more quickly than anticipated, resulting in higher borrowing costs for companies that will hurt economic growth and in turn the most powerful bull market drawing close to nine-year. The Fed has targeted three rates hike for this year but some economists believe inflationary pressures could lead to another lift-off.
Though every stock in the Dow Jones witnessed huge declines on the day, with many slipping into the negative territory for this year along with the index, there are still a few that are in the green from a year-to-date look. We have highlighted five of these below:
Boeing Company (BA - Free Report) : This world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems is still up 11.5% so far this year. The stock has a Zacks Rank #1 (Strong Buy) and a top Growth Score of A. It has seen solid earnings estimate revision of $1.22 for this year over the past seven days, with an expected earnings growth rate of 10.38%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Travelers Companies Inc. (TRV - Free Report) : This company provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United States and internationally. The stock has a Zacks Rank #2 (Buy) and a VGM Score of C. It saw positive earnings estimate revision of couple of cents for this year in the past week with an estimated earnings growth of 45.47%. Shares of TRV are up more than 4% this year.
Nike Inc. (NKE - Free Report) : This is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. The stock is up nearly 3% and saw positive earnings estimate revision of a penny for this fiscal year (ending May 2018) in the past week but has an estimated earnings decline of 9.96%. Nike carries a Zacks Rank #3 (Hold) and a Growth Score of B.
Microsoft Corporation (MSFT - Free Report) : This technology company develops, licenses and supports software products, services and devices worldwide. It has a Zacks Rank #2 and a VGM Score of C. Though it saw no earnings estimate revision for this fiscal year (ending June 2018) in the past week, its shares hold up well in the current turmoil with nearly 3% gains. Microsoft is expected to post earnings growth of 8.46% for this fiscal year.
Visa Inc. (V - Free Report) : Shares of this global leader in digital payments are still up nearly 2% so far this year. The stock has a Zacks Rank #2 and a VGM Score of D. It saw solid earnings estimate revision of 13 cents for the fiscal year (ending September 2018) with an estimated earnings growth of 22.99%.
Even with a steep decline, the Dow Jones is up almost 40% since Trump’s election given that strong fundamentals remain intact. Strong corporate profits, healthy economic growth and euphoria surrounding the biggest tax overhaul in decades are acting as the key catalysts to the bull market.
Given this, investors could take the current turmoil as a good buying opportunity for the most-beaten stocks.
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