Stock market: Dow falls 900+ points, Nikola shares rise

Yahoo Finance Live’s Julie Hyman breaks down how stocks are moving in midday trading.

Video Transcript

[BELL RINGS]

BRAD SMITH: Market selling off right now. Let's get on over to Julie at the interactive for some of the levels to watch today.

JULIE HYMAN: Yeah, so I'm looking at the two-day chart of the Dow Jones Industrial Average because we saw that huge climb in stocks yesterday after the Fed and Jay Powell took a 75 basis point increase off the table. And now we're coming back down today.

So over the past two days, we're actually up 2/10 of 1% if you want to look on the bright side. But of course, if you just switch it on over to today, you've got that 2.6% decline. And we're going towards the lows of the session here. So it's not like we're bouncing off in this session.

The S&P 500 is similar action. Here's the one-day chart, down 3.1%. Over the two days, it is down, not up. And I would imagine the NASDAQ is similar. Indeed, over the two days, it's down 1.1%. So it has erased yesterday's gains and then some.

And you're hard-pressed to find green on the screen here. The Russell 2000 of small caps is also down by about the same amount. You've got Dow Jones transportation average, which tends to be a proxy for the broader economy. It is down sharply today as well, by some 2.3%. Semiconductors are down by more than 4% here. We have seen, obviously, a lot of the binding up of technology and higher rates going together.

And speaking of higher rates, where's the green on the screen here? Well, there's volatility, first of all, as we see the VIX climb towards 30 once again. But then of course, we've got rates that are heading higher. Oh, there it is again, 3%, above 3% on the 10-year yield. We just crossed above that threshold earlier in the week for the first time since 2018. And we are back above that level, now at 3.04%.

So that's the highest that we've seen. Let's have a little fun here. Let's go back a few years and see, when is the high? It looks like this is the highest, again, since 2018 that we have seen that 10-year note. So that's what we're seeing in assets.

I want to look at some of the havens as well to see what we're seeing in terms of-- well, Bitcoin is going down. That's a haven for some, I suppose. But it's not seeing any bid today.

BRIAN SOZZI: Big for Elon Musk, Julie.

JULIE HYMAN: And gold, gold is trading higher today here too. Let's look at that shorter-term chart. So we've got gold prices trading higher by 9/10 of 1%. So some people are looking for what they perceive as safer areas in this market.

BRIAN SOZZI: I think we broke it down great at the top of the show, 9 o'clock hour. The bulls likely got their response yesterday completely wrong. And I think you have a lot of investors coming back here today, just reassessing how they reacted yesterday and realizing Jerome Powell didn't pull off any more rate hikes coming. He just ruled out a 75 basis point hike.

This Fed is still hawkish. And it's still moving higher on rates. And perhaps they got too aggressive yesterday, investors, bidding up those tech stocks.

JULIE HYMAN: Well, and then you have to look at the other part of the backdrop too. We got an ISM services report and a manufacturing report this week that were both below what economists had estimated. You have, today, a bunch of e-commerce stocks that are coming out and missing estimates.

So that implies a slowdown in demand versus what we had been seeing. Shopify down 17%. Etsy down 14%. eBay down 9%, so just a few examples. Wayfair down here down almost 18%. And so these companies may be showing that the backdrop, as those rates are going higher, maybe it's not as fantastic as some people were estimating, you guys.

BRAD SMITH: Keeping an eye on some of the sectors here too, I mean, consumer discretionary was getting cooked. I mean, you can't really find a bright spot right now, quite frankly. But consumer discretionary leading the brunt of the declines, right now down by about 4.8% here on the day.

And then additionally looking across some of the others, technology, of course, in this rising rate environment, that's continued to move lower as well, as we're taking a look at some of these declines.

JULIE HYMAN: I see no green on this screen of the 11 sectors in the S&P 500, no green whatsoever, and a of dark red. Consumer discretionary, ooh, we've got some blips going on there. (JOKINGLY) It's going down so much that it's freaking out!

Consumer discretionary, tech, communication services, financials. Financials down even though rates are up, because people are worried about that underlying economic backdrop. You've got materials. You've got real estate. You've got industrials. I mean, everything is down here today.

Let's hop on back over to the NASDAQ 100 for just a minute here, because-- oh, look, there's one little one lone green square in the middle. And that is Charter Communications--

BRIAN SOZZI: I knew you would find it.

JULIE HYMAN: --a cable company, a nice, boring cable company. Maybe that's what people want right now. But elsewhere--

BRIAN SOZZI: Booking?

JULIE HYMAN: OK.

BRIAN SOZZI: Well-deserved.

JULIE HYMAN: One other little green square, travel. OK, based on the company's earnings-- but I think that's it. Do you guys see any other green on that screen?

BRIAN SOZZI: No other green. Even Crocs, I'm reading Crocs' earnings right now and no green on the screen for Crocs here. And here's another consumer products company that has been out there raising prices. And despite them out there raising prices, their gross margin is down almost 600 basis points year over year.

I would say their outlook is on the weakish side. But all in all, maybe it's a win today if their stock is only down 4%.

BRAD SMITH: I think it is. It started off positive earlier in the day's session, but of course, going the way of the broader markets here. A few of the other callouts from the report, digital sales for Crocs brand, that actually grew 20.3%, represents about 32.8% of their total Crocs brand revenues.

And I'm sounding like a Crocs stan here. But honestly, I don't even own a pair of Crocs. I'm just a fan of the fandom around--

BRIAN SOZZI: Big fan here.

BRAD SMITH: Yes?

BRIAN SOZZI: You like them. Don't your kids wear Crocs?

JULIE HYMAN: My kids do wear Crocs.

BRAD SMITH: They got the gibbits?

JULIE HYMAN: They have the gibbits. Although, the way my son plays, the gibbits do not stay.

BRIAN SOZZI: Well, that's good for the business of Crocs.

JULIE HYMAN: I guess so. He has lost a lot of Crocs.

BRIAN SOZZI: $60 for a lot pair of Crocs clogs right now.

BRAD SMITH: Tough to play kickball in Crocs without losing some gibbits along the way.

JULIE HYMAN: Yeah, that's true.

Let's talk about Nicola for a minute too. This company has been so interesting to watch, right? And if you look at it today, adjusted EBITDA loss of about $79 million, although that is a smaller loss than estimated. So we're seeing the shares actually trade higher here today by about 5 and 1/2 percent.

Who would have thought, on a day when you see the NASDAQ down by 4%, that Nikola, of all companies, would be up 5 and 1/2 percent?

BRIAN SOZZI: Very simple analysis, one, I'm going to keep a brief. Not really a real company in my view. So I don't have much to say on it. Number two, only $360 million in cash. If they are going to want to make these hulking giant semi trucks made with electric batteries, they're going to have to raise more cash. I wish them well.

BRAD SMITH: I still don't think that Nikola is a serious contender in this space. I mean, as of right now, it's been pure videos and announcements.

BRIAN SOZZI: They look good though.

JULIE HYMAN: But I mean, the stock is up today 5 and 1/2 percent, but it's also down 20. It's only down 20% over the past year, is that right? You would think it would be a lot more than that.

BRAD SMITH: 23% year to date.

JULIE HYMAN: 23% year to date. I would have expected it to be down more.