Stock market drops wide, but Twitter climbs as Elon Musk nears deal
A sell-off in the US stock market resumed on Monday morning, with the S&P 500 losing more than 1%. But Twitter (TWTR) rallied as Elon Musk’s bid for the company moved closer to a deal.
Twitter was a big driver, up almost 4% in transaction-intensive. The social media company is in advanced talks about a sale to You’re here (TSLA) CEO Musk, and a deal could be finalized Monday, The Wall Street Journal reported. The deal is valued at $43 billion.
Twitter initially balked at the offer and implemented a poison pill plan to thwart it. But ever since Musk announced the terms of the deal’s funding, Twitter’s board has been preparing for it, the Journal said.
The S&P 500 fell 1.2% although it rebounded slightly from the opening lows. The Nasdaq composite cut its loss to 0.2%. Last week’s resistance at the 50-day moving average turned out to be the tipping point that killed off a nascent bounce.
Overview of the US stock market today
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Last Updated: 10:10 a.m. ET on 04/25/2022
The Dow Jones Industrial Average fell 1.1%. A breakout for the Dow component Verizon Communications (VZ) failed after the shares fell more than 7% below the 54.80 buy point. Chevron (CVX) broke below its 50-day line in active trading.
But Coca Cola (KO) rose nearly 2% in wholesale volume, hitting a new high, after the company beat Q1 expectations and gave a bullish outlook.
Stock Market Volume Rising, Magnitude Weakening
In addition to the losses, volume rose sharply on the NYSE and Nasdaq from the same time Friday. The decline in stocks led the early movers by a 4-to-1 ratio on the NYSE and 2-to-1 on the Nasdaq.
As severe as the US stock market losses are, they pale in comparison to China.
The Shanghai Composite fell 5.1% in the index’s biggest one-day decline since Feb. 3, 2020. The mainland China index is now down nearly 52% from its all-time high. October 2007 and closed at the lowest since June 15. , 2020, according to Dow Jones Market Data.
The Hong Kong Hang Seng plunged 3.7% on Monday. Its five-day drop of 7.7% is the largest since March 15. In Tokyo, the Nikkei 225 index fell 1.9%.
IShares China Big Cap ETF (FXI) fell 2.3%. KraneShares China Internet ETF (KWEB) extended its slide with a 1.6% decline.
Chinese stock market fall
Chinese stocks sold further as authorities imposed lockdowns in many cities and residents of the capital, Beijing, braced for a possible shutdown. The Covid wave adds to a regulatory crackdown and other issues plaguing the Chinese economy.
Chinese lockdowns are a key reason the price of US crude oil fell more than 5% to $96.68 a barrel. It is the first time oil has traded below $100 a barrel since April 13.
Energy Select Sector SPDR (XLE) slipped 5% below its 50-day moving average. The ETF is also below the 80.32 buy point from a flat base it broke last week.
The Innovator IBD 50 ETF (FFTY) fell 2.3%. But new member silicon movement (SIMO) soared a whopping 7.5% in volume after Bloomberg reported the memory chipmaker was considering a sale. A deal could be valued at $2.7 billion. The stock forms a cup base but remains 14% off the buy point of 96.99.
Almost all IBD 50 stocks were down. costamare (CMRE) broke below its 50-day line in heavy volume and is poised to again erase gains of over 20% from its last buying point.
Marriott International (MAR) fell below the buy point of 179.40 it reached on April 14th. Carlisle (CSL), National storage (NSA) and Harmony Biosciences (HRMY) are some of the stocks falling back below the buy points.
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