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Dow Jones Loses More Than 1,400 Points In 3 Days, Undercuts Key 200-Day

The rout on Wall Street continued in stocks today, with the Dow Jones industrial average falling as much as 2.7% intraday and clawing back just a small part of those heavy losses. By session end, the blue chip benchmark dropped 2.1%.

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The 30-stock Dow Jones industrial average undercut the critical long-term 200-day moving average, which continues to slope higher. It last dropped through the 200-day line June 25, but managed to rebound.

At least 14 of the components in the Dow Jones industrials fell 2 points or more, led by Boeing (BA). The aerospace giant, part of IBD Leaderboard, sank 2.4% to mark a sixth straight loss. The stock is showing institutional buying support at the 50-day moving average. But at 358, Boeing is now more than 4% below a 374.58 buy point in a 3-1/2-month flat base.

The S&P 500 dropped 2.1%, adding to Wednesday's 3.3% sell-off. It sliced below the 200-day moving average. The Nasdaq composite fell nearly 1.3% and is now almost 10% below an all-time high of 8133. Thursday's session essentially placed the key U.S. indexes in a new intermediate-level correction. Volume increased sharply on both main exchanges, early data showed.

Dating app giant Match Group (MTCH) and a small group of enterprise software providers, including Adobe Systems (ADBE), Salesforce.com (CRM) and Palo Alto Networks (PANW), rebounded mildly.

Meanwhile, West Texas Intermediate crude oil futures fell more than 3% to $70.78 a barrel following reports of a third straight weekly jump in oil inventories in the U.S.

As President Donald Trump continued to criticize the Federal Reserve for raising the cost of money with its recent rate hikes, the yield on the benchmark U.S. Treasury 10-year note fell sharply on Thursday, down 6 basis points to 3.17%. But it's still up from 3.09% on Oct. 1. The CME FedWatch tool still shows the probability of a fourth quarter-point jump in the Fed fund futures rate in December remaining near 80%.

Earnings From Delta Air Lines

Delta Air Lines (DAL) snapped a nine-day losing skid with a nearly 4% lift to 51.50. Volume jumped sharply above average. The stock had been working on the right side of a new base before shares began to collapse in price Sept. 24.

The international airline edged Wall Street estimates with a 17% rise in third-quarter earnings to $1.80 a share. Growth accelerated from a 4% pickup in Q1 and a 11% increase in Q2. Revenue rose 8% to $11.95 billion, close to its average increase of 8.5% in the prior four quarters.

Lewis Alexander, chief economist at Nomura, noted that a 5.5% month-on-month gain in prices for airline passenger services helped push the unusually strong 0.4% rise in core U.S. producer prices.

"As this component has been volatile and is often affected by changes in jet fuel prices and the seasonal patterns of holiday travel, the 0.4% gain in the core PPI may not be sustainable," Alexander wrote in a note to clients.

The jump in inflation and signs that the Federal Reserve will not let up in raising the Fed funds rate (currently in a 2%-2.25% target range) have sparked the recent jump in short and long-term interest rates.

Watch for Q3 results from JPMorgan Chase (JPM), Citigroup (C), First Republic Bank (FRC) and Wells Fargo (WFC) on Friday.

A REIT Stock Joins The IBD 50

Vici Properties (VICI), which debuted on the NYSE on Feb. 1, fell nearly 3% to 20.63 and clipped its 50-day moving average for the first time in more than a month. The property REIT owns, acquires and develops gaming and hospitality-focused facilities.

The stock ranks No. 45 in the IBD 50 through Wednesday's close.

Revenue soared to $201 million in 2017 vs. $19 million the prior year. Wall Street sees earnings up more than 1,100% to $1.52 a share this year and up 12% in 2019.

Please follow David Saito-Chung on Twitter at @IBD_DChung for more on financial markets.

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