Dow Jones Dips As Yellen Issues Inflation Warning; Virgin Galactic, AMC Make Huge Losses

The Dow Jones Industrial Average slipped lower after Treasury Secretary Janet Yellen gave an inflation warning. Meanwhile, Virgin Galactic (SPCE) dipped again and is on track for a massive weekly drop. Meme stock AMC Entertainment (AMC) also faces a weekly plunge.


Moderna (MRNA), meanwhile, surged on news it is being added to the S&P 500, while related stock BioNTech (BNTX) kept rising from support at the 10-week moving average.

Yellen Makes Inflation Warning

The stock market was falling Friday following Yellen’s comments on inflation.

“We will have several more months of rapid inflation,” the senior Biden administration member told CNBC. “So I’m not saying that this is a one-month phenomenon.”

However she also said that, over the medium term, she thinks inflation will “decline back toward normal levels.” The former Federal Reserve Chair also promised she will be keeping “a careful eye” on inflation.

The 10-year Treasury yield edged higher, and was sitting at 1.305%. Yields move in the opposite direction of bond prices.

Stocks fell despite positive retail data. The Commerce Department said retail sales jumped 0.6% in June, well above expectations for a 0.4% decline. It was also much better than May’s 1.3% drop. Minus vehicles, sales soared 1.3%, clear of forecasts for a 0.5% rise. It also reversed from May’s 0.7% decline.

Nasdaq, S&P 500 Fall

The Nasdaq fared best among the major indexes, but still fell about 0.6%. Cintas (CTAS) was a top performer with a gain of more than 4%, while (TCOM) fared worst with a loss of just over 4%.

The S&P 500 was almost on par with the Nasdaq, giving up 0.6%. Teleflex (TFX) was among the stars here, gaining more than 3%. But the stock plummeted nearly 10% Thursday. Norwegian Cruise Line (NCLH) was the worst S&P 500 laggard due to a drop of almost 5%.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 34732.87 -254.15 -0.73
S&P 500 (0S&P5) 4333.70 -26.33 -0.60
Nasdaq (0NDQC ) 14462.51 -80.62 -0.55
Russell 2000 (IWM) 215.73 -1.90 -0.87
IBD 50 (FFTY) 42.19 -0.17 -0.40
Last Update: 2:52 PM ET 7/16/2021

The S&P sectors were mixed, with utilities and real estate leading. Energy and materials were the worst.

Small caps were slipping again, with the Russell 2000 falling around 0.6%. Growth stocks were also forced lower again, with the Innovator IBD 50 ETF (FFTY) down 0.4%.

Dow Jones Dips As Amgen Stock Leads

The Dow Jones Industrial Average slipped nearly 8%.

Amgen and Procter & Gamble (PG) were the top performers, with Amgen up 0.7% and Procter & Gamble rising 1.1%.

Amgen is well shy of a flat base buy point of 261.10, MarketSmith analysis shows. PG stock is in a buy zone from a flat base entry of 139.20. Chemical stock Dow Inc. (DOW) was the biggest laggard, slipping around 3%.

Virgin Galactic, AMC Stock Make Big Losses

Virgin Galactic stock extended losses, this time dropping by around 5%. It has been plunging all week following news of a big share offering, and is on track to post a weekly drop of almost 40%.

The sharp drop for SPCE stock started after the firm revealed in a regulatory filing that it plans to sell up to $500 million in stock. This caused Virgin Galactic stock to fall hard, even though the firm made its first fully crewed flight last weekend.

Some of the most noted meme stocks were also on track for a sore spanking from the bears. AMC stock, the current big beast of the area, was up around 1.5% for the day.

But this means it is on track for a weekly loss of more than 20%, its fourth down week in a row. It is also set to close the week below the key 50-day moving average. Despite its brutal drawback, the stock still has a perfect Relative Strength Rating of 99.

GameStop also made progress for the day, rising around 5%. If it fails to rally, it will post a weekly loss of about 8%, and will have fallen for the sixth week in a row.

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Moderna Stock Pops, BioNTech Passes Buy

Covid-19 vaccine play Moderna was charging higher on the news it is to join the S&P 500. The stock vaulted more than 9% in a high volume move.

Moderna stock is sharply extended from a 189.10 buy point of a cup with handle. The biotech will join the S&P 500 on Wednesday, replacing Alexion Pharmaceuticals (ALXN).

Meanwhile, BioNTech is in a buy zone after clearing a trend line following a recent pullback near 222. It is rebounding off its 10-week moving average.

While stock market performance is its strongest suit, it also boasts decent earnings. The Covid vaccine stock posted a profit of $5.15 per share in the most recent quarter, compared to a 26-cent loss the previous year.

The bullish move saw the stock join the prestigious IBD Leaderboard of leading growth stocks.

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


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