Stock market today: Dow wins as Alibaba is hit again


Text size

Oil prices remained in freefall early Tuesday.

Getty Images

Stocks surged on Tuesday as oil prices fell and Chinese stocks continued to decline. Sluggish bond yields also helped tech stocks.

In the midday trade, the

Dow Jones Industrial Average

increased by 351 points, or 1.1%, while


increased by 1.4%, and the

Nasdaq Compound

gained 2%.

The real action was over in the commodity markets where the price of WTI crude oil fell about 6% to just under $97 a barrel. Oil prices are down sharply from the multi-year high of $130 reached earlier this month.

This removed a concern for market participants. Soaring oil prices – as markets see Western countries imposing restrictions on Russian oil in response to the country’s attacks on Ukraine – are worsening inflation and rapidly rising prices are hurting the consumer.

Also easing some tension: The 10-year Treasury yield, which finally stopped rising on Tuesday. It slipped 0.023 percentage points to 2.1%, although that was still up from the March 1 close of 1.72%. With the 10-year yield down slightly, tech stocks were able to regain some of their recent losses. Still, with long-term annual inflation expectations nearing 3%, many on Wall Street see yields rising, posing a continued threat to tech stocks.

It’s not necessarily a surprise, however, that the stock market at least avoided declines on Tuesday. The S&P 500 ended Monday just above the 4,170 level, where buyers have intervened aggressively twice this month to drive stocks higher.

“This level should be seen as a tipping point,” wrote Tom Essaye, founder of Sevens Report Research, meaning that if the index falls below this level, more pain could be on the way.

Elsewhere, the producer price index rose 10% year-on-year for the month of February. That didn’t move stocks much, as the markets had already digested that high inflation was here, as businesses passed on those higher costs to consumers. The result was in line with expectations and it was for a month that did not fully include changes in the supply and demand situation in Russia.

“Next month’s report will include the geopolitical shocks of the Russian invasion of the United States, so we expect volatility in the underlying data given the surge in commodity prices,” wrote economist Jeffrey Roach. Chief for LPL Financial.

Overall, inflation is not going anywhere anytime soon. “We see little in the report to change our view that broad-based inflation will continue into March and beyond,” wrote Citigroup economist Andrew Hollenhorst.

This puts the Federal Reserve in the center of attention. The central bank is expected to raise the benchmark policy rate by a quarter of a percentage point tomorrow. If it rises half a point, which the interest rate market suggests is only a 5% chance, stocks could fall.

The picture was more pessimistic overseas, where the pan-European

Stoxx 600

was 0.6% lower and that of Hong Kong

Hang Seng Index

fell 5.7%, the worst percentage day for the index since 2015.

In China, several strong economic data releases did little to halt sharp declines in Shanghai and Hong Kong. Industrial production, retail sales and capital investment all beat expectations, dispelling some fears of an economic slowdown in the world’s second-largest economy.

“That didn’t help China’s equity markets, however, which are down sharply again today after a rout yesterday,” said Jeffrey Halley, senior market analyst at Oanda. “There are a lot of storms blowing over China right now.”

Investors in China face concerns on several fronts: further Covid-19 shutdowns in industrial hubs; regulatory concerns affecting the US-listed country’s technology sector; fears that any Chinese military aid to Russia could lead to sanctions; and continued distress in the heavily indebted real estate sector.

Here are seven stocks in motion on Tuesday:

The rout in China continued to hit U.S.-listed tech stocks the hardest, with

Ali Baba

(ticker: BABA) down 2% in the US, after falling 10.3% on Monday. Peer (JD) rose 6.8% after plunging 10.5% on Monday.

Delta Airlines

(DAL) increased by 7.9% and

United Airlines

(UAL) gained 7.8% after both companies raised their revenue forecasts. Delta said it now expects March quarter revenue to recover to 78% of the 2019 level, down from a previous forecast of 74%. United now expects revenue in the quarter to be near the upper end of its guidance range of 20% to 25% of Q1 2019 levels.

Coupa Software

(COUP) fell 20% after the company reported earnings of 19 cents per share, better than estimates of 5 cents per share, on sales of $193 million, better than expectations of $186 million, but the company’s sales forecast missed analysts’ estimates.

Falling oil prices weighed on shares of major oil companies.

Exxon Mobil

(XOM) fell 4.7%, with


(CVX) 4.7% in the red.

Write to Jack Denton at and Jacob Sonenshine at


Comments are closed.