With regular updates throughout each trading session, the Stock Market Today column alerts you to any changes in market trend. You'll also get ongoing analysis of the best stocks to buy and watch, and highlights of stocks flashing potential sell signals.
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Boeing ( BA), the latest addition to Leaderboard, rose 1.3% in strong turnover that jumped 130% above its 50-day average. The megacap is slowly rising from a 364.64 alternative buy point. The stock is nearing a 374.64 standard buy point, which is another proper entry.
The S&P 500 closed a fraction lower after making a new high in early trading. The Nasdaq composite fell 0.5%. It closed below the 8000 level and is still showing some lag compared with the other two big indexes.
Invesco QQQ Trust ( QQQ), the ETF that tracks the Nasdaq 100, fell 0.6%. The ETF has been rising from a pullback to the 50-day moving average, much like the Nasdaq.
Small caps also were out of favor, with the Russell 2000 down 0.5%. The Russell is holding above the 50-day line, however.
Volume rose, although the simultaneous expiration of options and futures contracts caused trading to swell well above normal levels. Changes in S&P indexes that go into effect today appeared to cause volume to pick up on communications and media stocks such as Facebook ( FB) and Alphabet ( GOOGL).
Health care, internet and some cyclical groups such as chemicals were the weakest Friday. Biotechs fell 1.7%; Internet content was down 1.5% as a group; generic drugs slipped about 2%. Semiconductors, financials and metals and materials also were noticeably weaker.
Micron Technology ( MU) fell nearly 3% in heavy trading after the memory chip company gave weak guidance with its earnings report late Thursday. Micron's breakout from a late-stage base in May has failed and the stock has met resistance at the 50-day moving average since then — a bearish trend.
Airlines, insurance and oil groups were among the best performing industries Friday.
It was another lackluster day for breakouts, with several stocks topping buy points but sinking back into their patterns.
FleetCor Technologies ( FLT) edged above its 226.02 proper buy point of a flat base only for a moment. It closed below the entry in weak volume.
Mondelez International ( MDLZ), the snack foods purveyor, barely rose above a 44.33 buy point. Oil exploration company Unit ( UNT) cleared a 28.17 entry but reversed lower.
Leading stocks were nonfactors, with the Innovator IBD 50 ETF ( FFTY) almost flat on the day.
The Dow Jones and S&P 500 pushed further into new high ground Friday, while tech stocks lagged again. Volume was heavy due to options expiration. McDonald's ( MCD) was a top performer in the Dow after the company raised its quarterly dividend to $1.16 a share from $1.01. American Airlines ( AAL) was a top gainer in the Nasdaq 100, up 4%. The company on Thursday raised baggage fees, following the lead of United Airlines ( UAL), Delta Air Lines ( DAL) and JetBlue ( JBLU).
In late afternoon trading, the Dow Jones industrial average led the way, up 0.3%, helped by strength in other Dow components like Boeing ( BA), Cisco Systems ( CSCO) and Verizon ( VZ). The S&P 500 edged up 0.1%, and the Nasdaq composite eased 0.3%. Volume was tracking higher than Thursday's levels, more so on the NYSE, due to options expiration.
Shares of Boeing, a member of Leaderboard, were up 1%. The stock is holding above a 364.64 entry, but it's been a sluggish breakout so far despite decent volume.
Another IPO had a solid debut Friday. Shares of tech stock Farfetch ( FTCH) were trading around 29 after pricing last night at 20. The company is an online hub for luxury goods. In related news, IPO Eventbrite ( EB) debuted strongly Thursday, but early gains faded. Shares were down 5.5% to 34.50 Friday after pricing Wednesday night at 23.
In stock market results today, trading remained volatile in shares of pot stock Tilray ( TLRY). Shares were down 26%, but the marijuana stock was still on track for a weekly gain of 19%.
Elsewhere, FleetCor ( FLT) topped a 226.02 buy point, but an early gain faded. Shares were recently trading around 222.33, up 0.1%.
Tech Stocks Lead IBD 50
Several tech stocks in the IBD 50 outperformed Friday, including Ubiquiti Networks ( UBNT), ServiceNow ( NOW) and Cyberark Software ( CYBR). Meanwhile, IBD 50 component Planet Fitness ( PLNT) gained 1% to 50.49. It's trading near the 50-day moving average as it works on a flat base with a 53.51 entry.
The 10-year Treasury yield was up 1 basis point to 3.07%. The Federal Reserve is widely expected to raise interest rates by another quarter-point at the conclusion of next week's meeting. A decision on interest rates is due Wednesday at 2 p.m. ET. There's an 80% chance of another quarter-point hike at the December 18-19 meeting, according to the CME Group FedWatch tool.
Friday-afternoon action in stocks is capping a remarkable week of activity. Industrial stocks showed muscle, Chinese equities attempted a bottoming out, and a profitless pot stock soared as much as 175% over a three-session period before crashing more than 60% off its 300 peak.
At around 2:15 p.m. ET, the Dow Jones industrial average led the major indexes with a gain of around 0.2%. It marked a new all-time high of 26,769, stretching year-to-date gains to 8.3%. The blue chip index is now poised to rise more than 2.2% for the week. The Dow gained 2.3% in the week ended July 13.
Dow industrials components Home Depot ( HD), Microsoft ( MSFT) and Pfizer ( PFE) are helping to lead the way with solid weekly gains.
The Nasdaq edged 0.1% lower, hurt by a 2% sell-off in flash- and computer-memory giant Micron Technology ( MU). The Boise, Idaho-based data storage firm on Thursday reported fine fiscal Q4 results (earnings up 75% to $3.53 a share, sales up 38% to $8.44 billion), but the stock has been facing strong selling pressure for months.
The S&P 500 inched less than 0.1% higher. Strength in metal ores, consumer electronics retail, airlines, insurance brokers and gaming software stocks offset losses by generic drug, biotech, wood products, paper, steel, meat, and homebuilder issues.
The best market leaders tend to come from industry groups that rank within the top 40 for six-month relative price performance, or are rising rapidly up the ranks.
Within the Dow, Home Depot broke out of a long saucer with handle at 204.35 that shows a 5% buy zone of up to 214.56. Therefore, the stock remains in buy range.
Tilray ( TLRY), the British Columbia-based producer of cannabis-derived medicines and oils, slid more than 24% to 133.73 on Friday and dropped to as low as 121.51. In other words, the stock has fallen almost 60% below its peak.
How To Handle Tilray
At this point, a holder of Tilray shares with a significant gain must decide where to draw the proverbial line in the sand. The 50-day moving average cannot serve as a sell indicator since the stock has not traded that long. But on Friday, the stock appears to be getting some buying support at the short-term 10-day moving average.
Wall Street expects the midcap firm to produce a net loss of 45 cents a share this year and a loss of 10 cents in 2019. It has a float of 75 million shares and 93 million shares outstanding.
The market has shown that profitless companies can give back all of their gains.
Snap ( SNAP), down 0.18 to 9.03, had gone public at $17 a share on March 2, 2017. Shares bolted 73% in the space of two sessions to an all-time high of 29.44. It's since forfeited all of those fast gains. The so-called camera firm for social media lost 61 cents a share in 2017 and is expected lose 56 cents this year.
Strength In China Markets
Elsewhere, most China ADRs showed some oomph after the Hang Seng Index in Hong Kong rallied 1.7% in heavy volume overnight. The Hang Seng, which posted a Day 5 follow-through on Wednesday, is now up 6.6% from its recent 52-week low of 26,219 set on Sept. 12.
Inside the IBD 50, Chinese social network Momo ( MOMO) traded flat and is down 2% for the week. However, shares are poised to end above the key 10-week moving average for fifth straight week. The stock is building a new base.
Momo Chart Analysis
The current base certainly shows some big sell-offs in heavy volume. That's normal when institutional investors go into profit-taking mode. But over the past month and a half, Momo has also marked three up weeks in price in above-average turnover. That's a sign that investor greed is returning.
Given that the stock still lies 14% below the cup-base left-side high of 54.24, it would not be surprising to see the stock attempt to keep building the right side of the base and perhaps etch a new handle.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on growth stocks and financial markets.
U.S. stock indexes gripped small gains and losses in late morning trade Friday, as the Shanghai Composite Index recorded its biggest weekly gain in 2-1/2 years.
The Dow Jones industrial average advanced 0.4% and the S&P 500 added 0.2%. The Nasdaq edged down 0.1%. The small-cap Russell 2000 lost 0.2%.
Volume soared on both major exchanges, partly due to options expiration.
In China, the Shanghai Composite ended with a weekly gain of 4.3%. The move was the Shanghai's best weekly pop since March 2016. The Shanghai is in a bear market, and the strong weekly gain doesn't necessarily change that condition. Bear markets are known for delivering big, short-term gains as they try to identify a bottom.
The Innovator IBD 50 Fund ( FFTY) shifted sideways in early trade Friday. The exchange traded fund reflects the performance of the IBD 50.
Stocks breaking out Friday included oil explorer Unit ( UNT), up 3.5% in heavy volume. The small-cap stock cleared a 28.17 buy point in a cup-with-handle pattern. Unit is thinly traded, flipping about 320,000 shares daily.
Among IBD's 197 industry groups, oil stocks were doing well. Exxon Mobil ( XOM) finally saw strong volume kick in on its recent breakout. The stock cleared a cup within a larger consolidation Wednesday, but volume was only 3% above average. On Thursday, Exxon edged higher in volume 10% above average. But on Friday, the stock inched up in volume at more than three times its usual pace.
Oil stocks are riding higher on the increasing price of crude.
Light sweet crude oil was holding above $70 a barrel. If oil keeps its grip, the close would be the first weekly one above 70 since July 20.
Airline Stocks Up
The airline stock group also rose, boosted by two Chinese airlines. China Southern Airlines ( ZNH) gapped up 4%. China Eastern Airlines ( CEA) also gapped up 4%.
U.S. airlines also provided winners. Delta Air Lines ( DAL) climbed 3% in heavy volume. The stock cleared a 59.70 buy point in a cup-with-handle pattern, but the handle showed wedging — a bearish signal.
Southwest Airlines ( LUV) advanced 2%. The stock is ascending the right side of a cup base. Shares are less than 5% off their high.
The stock market backed off record highs Friday after the Dow Jones industrial average set a fresh record high. FANG stock Netflix ( NFLX) continued to move up the right side of a new potential formation. Meanwhile, former hot stock Micron Technology ( MU) fell on a disappointing outlook. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Dow Jones industrial average and S&P 500 index saw their gains wither to about 0.1%. The tech-heavy Nasdaq lost about 0.2%.
Among the Dow stocks, McDonald's ( MCD) was the top-performing name with a 2% rise in morning trade. Shares were trying to regain their 200-day moving average line. Late Thursday, the company raised its quarterly dividend to $1.16 per share.
Meanwhile, Cisco Systems ( CSCO) hit a new high, rising 1%. The stock is nearly extended from a flat base's 46.47 buy point.
Earnings: Micron Technology Disappoints
Among companies reporting earnings, former stock market leader Micron Technology fell 4% after reporting weaker-than-expected guidance in the current quarter after the stock market close Thursday. The stock is nearing its recent lows, about 31% off its 52-week high.
Next week, Dow stock Nike ( NKE) will report on Sept. 25 after the market close. Shares are barely extended from a flat base's 81.10 buy point after a breakout on Aug. 9.
Among the FANG stocks, Netflix advanced 0.4%, paring gains. The video streaming platform regained its 50-day line this week and was shaping the right side of a new base formation. The buy point was 423.31, but be on the lookout for a handle that would lower the risk-optimal entry. The stock's relative strength line was lagging.
Delta Air Lines ( DAL) just broke out past a 59.70 cup-with-handle entry early Friday. The company raised its baggage fees from $25 to $30 earlier this week. The stock's RS line bears watching for further improvement.
Stocks opened to solid gains Friday as a rally in China fueled optimism ahead of what promises to be a day of high-volume action.
China stocks were early influencers, as New Oriental Education ( EDU), Huazhu Group ( HTHT) and Autohome ( ATHM) jumped more than 3% higher. Chip stocks lagged, with Micron Technology ( MU) diving after delivering quarterly results late Thursday. Office furniture brand Steelcase ( SCS) surged following its second-quarter results. Mazor Robotics ( MZOR) spiked on a takeover bid from Medtronic ( MDT).
The S&P 500 grabbed an early 0.3% gain as Acuity Brands ( AYI) surged to lead the index following an analyst upgrade. The Dow Jones industrial average and Nasdaq Compoiste borth opened 0.2 %higher, then strengthened to 0.3% gains. McDonald's ( MCD) led the Dow. American Airlines ( AAL) jumped to the top of the Nasdaq 100. (For updates on this story and other market coverage, visit the Stock Market Today.)
Extensive rebalancing among the Standard & Poor's indexes and industry designations promises to trigger heavy volume trading on Friday, amplified by the expirations of stock options and futures, as well as market index futures and options typically known as a "quadruple witching" session. The S&P reclassifications will be the most far-reaching in 19 years.
China Stocks Rally; McDonald's Hikes Dividend
McDonald's powered up 2.1% after announcing late Thursday it boosted its quarterly dividend 15%, to 1.16 from 1.01. The company said its "Velocity Growth Plan" initiated in 2017 was so far effective, and raised its targeted cash returns to shareholders to $25 billion for the three years ended 2019, up from its prior target of $24 billion. McDonald's shares have been struggling to take and hold support at their 10- and 40-week moving averages, within an eight-month consolidation.
Among China-based names, NetEase jumped 2%. Jefferies upgraded NetEase to buy, from hold, with a 270 price target. NetEase is up 7.8% for the week, attempting to start up the right side of an eight-month consolidation.
Acuity Upgraded; Mazor Spikes; Steelcase Breaks Out
Israel-based Mazor Robotics vaulted 10% higher. The surgical robotics innovator agreed to be acquired by Ireland-based Medtronic in an all-cash deal valued at $1.64 billion. The companies expect to close the deal in the third quarter. Medtronic shares slipped 0.1% in opening trade. The stock is extended, taking out new highs after clearing a flat base in July.
Steelcase surged nearly 18% after reporting late Thursday its first combined revenue and earnings advance since June 2016. Earnings leapt 32%, revenue swung 13% higher, both above analyst expectations. The Grand Rapids, Mich.-based company also announced the $79 million acquisition of U.K.-based furniture maker Orangebox Group. The move hauled the stock above an 18.25 buy point in a 15-month saucer base. Shares remain in a buy range through 19.16.
Lighting products leader Acuity Brands ( AYI) climbed 4.5% after an upgrade to outperform from market perform by Wells Fargo. The report also lifted the stock's price target to 187, from 140. Shares are now up 54% from a May low, scaling the right side of a bottoming base with a 187.09 buy point.
China, Europe Markets Surge; Oil Tops $71 Ahead Of OPEC Meeting
A week of interesting moves in China began with a pledge from Premier Li Keqiang on Wednesday that the country would not devalue its yuan for trade war purposes. That was followed by a comment that the country was set to reduce tariffs. Bloomberg elaborated on Thursday, reporting that China was set to lower import duties across a broad range of its trading partners. The cuts could go into effect as early as October, the report said. That helped boost market optimism in Europe and the U.S. on Thursday.
China's markets rallied vigorously Friday, in their first session following reports of possible tariff cuts. The Shanghai Composite sprung 2.5% higher, ending up 4.3% for the week — the mainland benchmark's best week since March 2016. Hong Kong's Hang Seng Index popped 1.7%, sending it to a 2.4% gain and adding a second week to its rebound out of bear market territory. The Shanghai Composite remains down more than 20% from its January high, retaining its bear market status.
In Japan, Tokyo's Nikkei 225 plowed 0.8% higher, ending the week with a 3.4% advance. Markets in Tokyo and Shanghai will be closed on Monday for a holiday.
Markets in Europe rallied in afternoon trade, despite British Prime Minister Theresa May saying Brexit negotiations were at a stalemate after the European Union categorically rejected her administrations trade proposals with no explanation. The FTSE 100 in London accelerated its gain to 1.5%, the CAC-40 in Paris jumped 0.8% and Frankfurt's DAX held a 0.6% advance.
Oil prices rallied for a fourth session, with West Texas Intermediate up 1% to $71.05 a barrel and up nearly 3% for the week. The Organization of Petroleum Exporting Countries and a group of non-members led by Russia are scheduled to meet in Algeria to discuss production quotas this weekend. Baker Hughes ( BHGE) releases its weekly rig count report at 1 p.m. ET.
Dow Jones futures rose slightly Friday morning, along with S&P 500 futures and Nasdaq futures. Micron Technology ( MU) easily beat earnings views, but fell on weak guidance, blaming Trump tariffs. That's bad news for Micron stock and memory chip plays such as Western Digital ( WDC), Applied Materials ( AMAT) and Lam Research ( LRCX), as well as the overall key semiconductor sector. Fellow chipmaker Texas Instruments ( TXN) gained on a dividend hike and stock buyback plan. Adobe Systems ( ADBE) agreed to buy marketing automation company Marketo for $4.75 billion.
Dow Jones Futures Today
Dow Jones futures climbed 0.2% vs. fair value. S&P 500 futures were up nearly 0.1%. Nasdaq 100 futures rose 0.1%. Remember that Dow futures, Micron stock and other overnight action don't always translate into actual trading in the next regular session.
The stock market rallied Thursday with broad-based gains. The Dow Jones rose 1% and the S&P 500 index 0.8%, both hitting record highs. The Nasdaq composite climbed 1%.
Micron Earnings, Guidance
Micron earnings per share vaulted 75% to $3.53 in the fiscal fourth quarter. Revenue climbed 34% to $8.44 billion. Analysts expected Micron earnings of $3.54 a share on sales of $8.25 billion.
But Micron Technology forecast fiscal Q1 revenue of $7.9 billion to $8.3 billion and EPS of $2.88-$3.02. That was below many analyst estimates.
Micron Technology blamed Trump tariffs in the escalating China trade war for the weak forecast. Trump tariffs are hitting more tech and consumer products.
Micron stock, which initially popped on the earnings beat, reversed to trade down 3.9% before Friday's open, but better than overnight lows. The company did say it would accelerate its previously announced $10 billion stock buyback program.
Shares of Micron have been sliding since a failed late May breakout, amid growing concerns of weak memory chip prices. Still, Micron stock rose 2.2% to 46.06 in Thursday's regular stock market trading, helped by a report that Samsung Electronics will curb memory chip output to boost prices.
Micron's earnings report also hurt other memory chip plays. Western Digital, which owns Nand flash memory maker SanDisk, was off 1.75%. Applied Materials stock and Lam Research stock slid about 0.8%. Both chip-equipment giants sell a lot of gear to the memory chip market.
Why Chip Stocks Matter
The Philadelphia Semiconductor Index popped 1.2% Thursday, rebounding from its 50-day moving average. The Philly Sox has lagged for much of 2018. Even with a rebound from a Sept. 12 intraday plunge, the Philly Sox index's relative strength line is near a 2018 low. Therelative strength line tracks a stock's performance vs. the S&P 500 index.
Chip stocks typically lead or play a big role in market rallies. They account for a big share of market capitalization, especially the Nasdaq composite. Also, chips are used in just about everything, so if chip stocks aren't faring well that could be bad news for many key market sectors.
Texas Instruments Stock Buyback, Dividend Hike
On the bright side for chip stocks, Texas Instruments will hike its quarterly dividend by 24% to 77 cents a share. TI will also buy an additional $12 billion worth of its stock. That's on top of $7.4 billion remaining as of June 30 from a prior buyback program.
Texas Instruments rose 1% early. In Thursday's session, shares rose 1% to 108.49, a few cents below their 200-day moving average. Texas Instruments stock is in an eight-month consolidation, but its RS line is well off highs.
Adobe Systems Buys Marketo
Adobe Systems will buy Marketo for $4.75 billion. Marketo provides marketing automation software. The deal had been expected, so Adobe stock was mute, edging up to 267.
The Dow Jones industrial average and the S&P 500 rose to record highs in a broad rally that also gave the Nasdaq composite its best gain since Aug. 29 in the stock market today.
The Dow added nearly 1% to clear the previous high marked on Jan. 26. The S&P 500 topped its Aug. 29 high with an increase of 0.8%. The Nasdaq was up 1% and closed back above the 8000 level. It still needs to rise about 1% to make a new high.
Indexes also closed near session highs, demonstrating lasting strength. Small caps also were among the strongest stocks, with the Russell 2000 up 1%.
Volume rose from Wednesday's levels, according to early figures. Breadth was impressive, with winners over losers by 2-1 on the NYSE and by better than 13-5.
But leading stocks lagged, with the IBD 50 rising a comparatively weak 0.4% late Thursday. Internet components Match Group ( MTCH) and Momo ( MOMO) fell 3.2% and 2.6%, respectively. But in general there were no major declines on winners in the IBD 50. About one-third of the list was flat or lower.
On the Dow, Intel ( INTC), Caterpillar ( CAT), DowDuPont ( DWDP) and Walgreens Boots Alliance ( WBA) climbed 2% or more to lead the industrials.
S&P 500 Stocks: Consumer Giants Rise
Walt Disney ( DIS) rose nearly 2% after the company said its ESPN unit has signed up more than 1 million subscribers to its ESPN+ video service. The stock climbed back to the 50-day moving average and is trying to bottom after a six-week decline.
Despite the strong market day, there were few solid breakouts.
Yelp ( YELP) broke out of a narrow cup-shaped base, racing past a 51.43 buy point in heavy trading. A good cup base should normally be at least six weeks in length.
New issue Veoneer ( VNE) rose above the 56.59 buy point of a choppy flat base, but closed below the entry. The Swedish maker of auto safety equipment started trading on the NYSE on July 2. On Wednesday, Buckingham initiated coverage with a neutral rating and a 48 price target.
Dow stocks and technology stocks were in the driver's seat in afternoon trading Thursday. The Dow Jones was up 1% after marking an all-time intraday high of 26,680. Intel ( INTC) was a strong gainer in the Dow, up more than 2%.
The Nasdaq composite also did well, up 1%, helped by strength in China stocks. Inside the Nasdaq 100, Baidu ( BIDU), Ctrip.com ( CTRP) and NetEase ( NTES) showed gains of 2% or more. Trade war fears went to the back burner after Bloomberg reported that China is planning on cutting tariffs on imports from most of its trading partners.
The S&P 500 also hit an all-time high. It was up 0.8% in late trading. Small caps also did well, with the Russell 2000 up 1%.
Dow Stocks On The Move
Other Dow stocks outperformed. Caterpillar ( CAT), Walgreens Boots Alliance ( WAG) and DowDuPont ( DWDP) showed gains of around 2%.
JPMorgan ( JPM), meanwhile, drew closer to a 119.43 buy point. After jumping nearly 3% Wednesday, shares were up another 1% in afternoon trading.
Leaderboard name Autodesk ( ADSK) was a top gainer in the S&P 500, up more than 3%. Canaccord Genuity maintained its buy rating but lifted its price target to 180 from 165.
In stock market results today, Eventbrite ( EB) soared in its debut after pricing last night at 23. The event management and online ticketing firm originally filed with a proposed range of 19-21, but it was raised to 21-23. Shares were recently trading around 38. IPO Elanco Animal Health ( ELAN) also jumped on its first day of trading.
Inside the MarketSmith Growth 250, security software firm Tenable ( TENB) reclaimed a 35.61 buy point of an IPO base. Shares were up 7% to 36.18. The company isn't profitable yet but shows big sales growth in recent quarters.
Inside the IBD 50, SVB Financial ( SIVB) was a top gainer as financial stocks outperformed. Shares rose 2.5% to 327. It's near the top of a flat base with a 333.84 entry.
The 10-year Treasury yield was flat at 3.06%, but it's not far from a multiyear high of 3.11% set in mid-May. Another quarter-point rate hike is widely expected at the Federal Reserve meeting later this month. And the chances are good for another quarter-point hike at the December meeting.
Money center and superregional banks Thursday helped stoke a broad-based rally on Wall Street. The newest hot story in stocks today, Tilray, sold off hard after showing climax-run-type action in the prior three trading sessions. It also marked its biggest single-session point drop since going public July 19 at $17 a share.
Meanwhile, business software and e-commerce firms showed resilience after selling off hard Wednesday. True market leaders Grubhub ( GRUB), Adobe Systems ( ADBE) and Salesforce.com ( CRM) all gained 1% or more.
The Nasdaq composite rose nearly 0.9% and is on course to rise for a second straight week. Last week, the leading index for top growth companies gained 1.4%. The Dow Jones industrial average gained nearly 1%, the S&P 500 around 0.8%, and the S&P SmallCap 600 0.6%. The 600 on Wednesday came close to testing institutional buying support at the 50-day moving average.
Volume is running mildly higher vs. the same time Wednesday on both main exchanges.
Apple Stock Today
The Nasdaq 100 rallied 1% as Apple ( AAPL) advanced for a third straight session with a 1.2% lift.
The double bottom features two distinct sell-offs, and the second drop should exceed the low of the first drop.
That was certainly the case for Apple; the second low of 160.63 (on April 27) not only undercut the first low of 164.47 (on April 2), but it also punctured the 200-day moving average (see the line drawn in black in every MarketSmith chart). Such a shakeout is actually a good thing. Why? It shakes out uncommitted holders and helps set up a potential new breakout.
Earnings estimates continue to rise for Apple. The Street sees profit rising 34% to $2.77 a share in the September-ending fiscal fourth quarter and up 28% for FY 2018 to $11.77 a share.
The Innovator IBD 50 ( FFTY) exchange traded fund lagged, rising just 0.4%.
Banks Advance Again
Citigroup ( C), Bank of America ( BAC) and Dow industrials component JPMorgan Chase ( JPM) gained 1% each. All three are seeing higher-than-usual turnover. The former two are forming bases.
JPMorgan poked above a 118.39 buy point in a long saucer with handle. The same base could also be seen as a flat base that's nestled within a longer consolidation.
The Wall Street bank continues to show an impressive earnings trajectory. In 2009, JPMorgan earned $2.71 a share. This year, analysts seen profits growing 34% to $9.18 a share and up 9% to $10 a share in 2019.
Morgan Stanley ( MS), Wells Fargo ( WFC) and Goldman Sachs ( GS) also advanced, but these three companies are laggards within their respective industry groups. All three trade below their long-term 200-day moving averages.
Silicon Valley financier SVB Financial ( SIVB) rallied more than 2% to 326.80. Notice on a daily chart how the large-cap banking play has repeated been turned lower near 333.
Tilray Stock Today
On the downside, Tilray ( TLRY) fell more than 20% and reached as low as 158. That's a 47.3% correction from the stock's high of 300 in less than 24 hours.
The recent big gain was vertical in slope, commensurate with a climax run that occurred in many of the dot-com leaders in the late 1990s to early 2000.
CEO Brendan Kennedy, a graduate of University of California at Berkeley and Yale's business school, told Jim Cramer in a Tuesday "Mad Money" cable TV interview that he foresees a $100 billion global market for cannabis in the next several years.
Tilray Business Strategy
Tilray aims to build partnerships with major pharmaceutical and consumer goods firms to develop cannabis-based products.
The Nanaimo, British Columbia-based company has grown sales from $5.4 million in 2015 to $20 million last year. In the second quarter, Tilray grew revenue 95% vs. a year ago to $9.7 million, the highest for any quarter. It lost 14 cents a share. The Street sees the large-cap company (now with a market value of around $16.5 billion) losing 45 cents a share.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on growth stocks, chart analysis, sell rules, and financial markets.
U.S. stock indexes took out some resistance areas on the stock charts Thursday, as the day's leadership in the market showed diverse participation.
The Nasdaq steamed ahead 1%, while the Dow Jones industrial average and the S&P 500 added 0.9% and 0.7% respectively. The small cap Russell 2000 lagged with a 0.5% gain.
Volume increased on both major exchanges vs. the same time yesterday.
Technicals improved as the tech-leaning Nasdaq rose above the 8,000 price level, which recently acted as an area of resistance. The blue chip Dow and large cap S&P 500 each pegged new highs.
In the tech space, chipmaker Skyworks Solutions ( SWKS) gapped up almost 3% in strong volume. Skyworks is 22% off its high but could be shaping a double-bottom base, though there is a fair amount of work needed to complete the pattern.
A double-bottom base is shaped like a W and can be a bullish pattern. The middle peak provides the entry. Skyworks appears to have started work on the right side of the pattern.
Adobe Systems ( ADBE) rose 1.5% in average volume. Data storage firm NetApp ( NTAP) bounced 0.8% in below-average turnover.
Several blue chip stocks outperformed in the Dow. Big gainers included heavy equipment maker Caterpillar ( CAT), up 1.4%; chipmaker Intel ( INTC), up 1.9%; Apple ( AAPL), up 1.2%; and Nike ( NKE), up 1.5%.
Broad Based Rally
Among IBD's 197 industry groups, leadership had broad reach. Winning industry groups outnumbered losers by an 11-to-2 ratio.
The day's outperformers included construction equipment, superregional banks, cement, oil drillers, chipmakers, restaurants and biotechs. Losers included RVs and department stores.
In the S&P 500, the day's biggest percentage gainer was sports apparel marketer Under Armour ( UAA). The stock climbed 6% in heavy volume. In a press release Thursday, Under Armour announced an update to its 2018 restructuring plan.
Under Armour plans to lay off 3% of its workforce by March 2019, which the company says will be the final piece of its restructuring plan. The stock is 20% off its high. Under Armour is trading above its 200-day moving average but under its 50-day line.
The stock market surged higher early Thursday as the Dow Jones industrial average hit a fresh record high. IBD 50 stock Nvidia ( NVDA) sold off Thursday and was nearing a potential support area. Meanwhile, former hot stock Micron Technology ( MU) will report earnings after the stock market close. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Dow Jones industrial average and tech-heavy Nasdaq advanced about 0.8% apiece. The S&P 500 followed up with a 0.6% gain.
Among the Dow stocks, Apple ( AAPL) was one of the top gainers with a 1.6% rise. Shares were on pace to extend a win streak to three trading sessions. Apple stock was about 4% off its recent high price.
Meanwhile, Caterpillar ( CAT) rose another 2% Thursday. Shares were up nearly 8% this week, reclaiming their 200-day moving average line. A new base was forming.
Earnings: Red Hat Crumbles, Darden Hit Highs
Among companies reporting earnings, Red Hat ( RHT) reported its Q2 earning results late Wednesday, sparking an over-7% decline in morning trade. The Linux provider missed Q2 revenue estimates and forecast weaker-than-expected sales in the current quarter. Shares were approaching their recent lows, about 25% off the 52-week high set back on June 14.
Olive Garden parent Darden Restaurants ( DRI) reported better-than-expected fiscal-Q1 results early Thursday with strong same-store sales. The stock advanced almost 2% on its way to a new high. Shares were about 20% above a 100.21 base-on-base buy point — a potential profit-taking level.
After the stock market close, former stock market leader Micron Technology is expected to record earnings of $3.31 per share on revenues of $8.25 billion. Shares were about 30% off their high after a failed breakout above a cup-shaped base's 63.52 buy point in late May. Shares moved up almost 4% Thursday morning.
IBD 50 Stocks: Nvidia's New Graphics Chip Disappoints
Among the top growth stocks, graphics-chip maker Nvidia dropped almost 2% after Morgan Stanley said the gaming performance of the company's latest graphics card was below expectations. Shares were approaching their 50-day line and just below their recent 269.30 flat-base entry.
On the upside, SVB Financial ( SIVB) neared a new buy point Thursday with an almost-3% gain. The stock is about 2% away from a potential 333.84 flat-base entry.
Stocks climbed out of Thursday's starting gate, with the S&P 500 notching a fresh high as Caterpillar ( CAT), Advanced Micro Devices ( AMD) and Darden Restaurants ( DRI) climbed on a heavy slate of early market news.
Olive Garden-owner Darden Restaurants ( DRI) led the S&P 500 after a strong first-quarter report. Chip stocks were in motion with AMD hammering higher and Micron Technology ( MU) set to report results after the close. Auto components suppliers Kemet ( KEM), Veoneer ( VNE) and Autoliv ( ALV) posted strong early moves following trade war news out of China. Meanwhile, Tilray ( TLRY) appeared set to extend the recent cannabis-sector rally.
The Nasdaq Composite led, up 0.9%. The Dow Jones industrial average jumped 0.8%, overtaking its Jan. 26 record and moving to new high ground. The S&P 500 climbed 0.6%, enough to retake its Aug. 29 high.
Micron Technology, Baidu ( BIDU) and JD.com ( JD)topped the Nasdaq 100. Micron led the Nasdaq 100. Micron and Darden led the S&P 500.
Market action for the week through Wednesday has been sharply mixed. The Dow goes into Thursday's session ahead 1% for the week, while the Nasdaq is down 0.8%. The S&P 500 has split the difference, holding a 0.1% gain. Heavy equipment makers, diversified insurers and international oil and gas groups have posted the week's largest gains among industries. Wood products, consumer electronics and staffing firms have seen the deepest declines.
Trade War Update: China Eyes Import Tax Cut; Europe Rallies
The ball in the U.S.-China trade war appears to be in China's court, where news reports said regulators were preparing to lower the country's import costs by reducing duties across a broad range of trading partners. Set to occur as early as October, according to Bloomberg, the tax cuts would continue China's effort to transition its economy to a consumer spending/import-driven model, vs. its traditional export-driven economy.
It was not clear whether the cuts would include products imported from the U.S., a move that could — according to some analysts — signal an easing of trade tension with the U.S.
China's markets ended narrowly mixed and Tokyo's Nikkei 225 in Japan was effectively flat on Thursday. Stocks rallied in Europe, where the CAC-40 in Paris surged 1% to lead the region in afternoon trade.
Caterpillar Upgraded, AMD Price Target Hiked, Tilray Trims Gain
Caterpillar surged 3% after Robert W. Baird upgraded the stock to outperform, from neutral. The note hoisted the heavy equipment maker's price target to 191, from 155. Caterpillar shares are up 18% from a mid-August low, nearing a 161.70 buy point in a double-bottom base.
China-based stocks turned active, with Weibo ( WB) and Baozun ( BZUN) each up 3%. Alibaba Group Holdings ( BABA) and BaiduBIDU] rose nearly 2% apiece.
In chip stocks, Advanced Micro Devices trimmed its early gain to 0.5% while Intel ( INTC) held its 1.4% advance. AMD received a second, huge price target hike on Thursday, with Stifel Nicolaus now targeting 38, up from 21. On Wednesday, Morgan Stanley hoisted the stock's target price to 28, from 11, in a report that also trimmed Intel's price target. AMD has gained 24% so far in September, and is up 244% from a late-April low.
Micron Technology bolted nearly 5% higher, with its fiscal fourth-quarter earnings due after today's close.
Olive Garden-owner Darden Restaurants jumped more than 3% in premarket action after reporting a 35% earnings surge and a 7% rise in revenue, both better than forecast, for its fiscal first quarter. Management raised its full-year revenue guidance to above analyst targets. Darden shares are extended following a June breakout and an August rebound from 10-week support.
RV maker Thor Industries ( THO) dived 9% after reporting its first combined sales and earnings decline in more than 20 quarters. Fiscal fourth-quarter earnings fell more than expected, while sales came in above estimates. Management cited difficult comparisons, and said the company faced gross margin pressure in the first half of fiscal 2019. Thor shares ended Wednesday up 6.8% for the week, attempting to start up the right side of a nine-month consolidation pattern.
Philly Fed Surges; Oil, Bonds On Watch
First-time unemployment claims eased to 201,000 in the week ended Sept. 15, the Labor Department reported. That was down from 204,000 claims in the prior week, and well below analyst projections for 210,000 new applications.
Manufacturing in the mid-Atlantic region accelerated sharply in September, sending the index tracking the Philadelphia Federal Reserve's Manufacturing Business Outlook Survey to 22.9 for the month, double August's 11.9 reading. Consensus forecasts called for a rise to 19.6.
Oil prices were volatile Thursday, following a 1.8% jump yesterday on a surprise turnaround in supply data. West Texas Intermediate futures reversed early losses to gain 0.8% to $71.66 early Thursday. Bonds also will be closely watched, after 10-year Treasury note yields rose more than three basis points intraday to a four-month high at 3.08%. Treasuries traded lower early Thursday, lifting the 10-year yield 1 basis points to 3.08%.
Dow Jones futures rose solidly early Thursday, along with S&P 500 futures and Nasdaq 100 futures. Marijuana stocks Tilray ( TLRY), Cronos Group ( CRON) and Canopy Growth ( CGC) remained active and volatile in the premarket, after Tilray stock went on a wild trip Wednesday. Red Hat ( RHT) fell on weak revenue and guidance, the latest troubling sign for software stocks. Crispr Therapeutics ( CRSP) sank on a planned stock offering.
Dow Jones Futures Today
Dow Jones futures climbed 0.5% vs. fair value, gaining momentum. S&P 500 futures rose 0.4%. Nasdaq 100 futures advanced 0.6%. Keep in mind that overnight trading in Dow futures, Tilray stock and more don't necessarily translate into regular-session trading.
During Wednesday's stock market trading, the Dow Jones rallied 0.6%. Higher interest rates and oil prices lifted Goldman Sachs ( GS), JPMorgan Chase ( JPM), Chevron ( CVX) and Exxon Mobil ( XOM), with Caterpillar ( CAT) up 2.5%. Boeing ( BA) cleared a buy point, though its solid intraday gain withered to 0.45% by the close.
The S&P 500 index closed up 0.1%; the Nasdaq composite dipped 0.1%.
Marijuana Stocks: Tilray Stock Still Active
Tilray stock, down as much as 16% late Wednesday, continued its wild action Thursday. Shares up and down sharply, moving 9% higher at 232.75. On Wednesday, Tilray shares went on an amazing trip. They shot up 94% to 300, then crashed to slightly negative before rebounding to close up 38% at 214.06 in massive volume. Volatility triggered five trading halts.
Tilray stock has been on a massive run, up 1,159% since the first pure-play U.S. marijuana IPO priced at 17 a share two months ago. Wednesday's catalyst was Tilray's CEO touting a potential $100 billion marijuana industry market.
Meanwhile, Cronos stock rose 5.1% and Canopy stock 2.3%, with both active in the premarket. On Wednesday, Cronos Group rose 9.8% to 12.69, but that was well off intraday highs of 15.30. Canopy Growth rose to 55.69 intraday but reversed to close down 4.9% at 49.35.
The marijuana industry is set for massive growth as more countries and U.S. states legalize the use of medical marijuana and recreational cannabis. The alcohol and tobacco industries are making or mulling alliances with marijuana industry players. But it's unclear which cannabis companies will end up as winners.
Red Hat stock fell 5.9% in premarket trade. It dropped back below its 50-day and 200-day moving averages on Monday. Shares have struggled since plunging after the Q1 Red Hat earnings report.
Red Hat has been a software laggard lately, but the software sector has been a big winner in 2018. Yet software groups have struggled over the past several sessions. Splunk ( SPLK) and Tableau ( DATA) have fallen below buy points, while Qualys ( QLYS) and New Relic ( NEWR) sold off after nearing breakouts.
Crispr Therapeutics Stock Offering
Crispr Therapeutics said it will offer $200 million in common shares. That sent Crispr stock down 1.7% early Thurday, after closing just below its 50-day line. The gene-editing company, which does not have any products yet, has been trending lower for nearly four months. But that's after a big run from late December to late May.
The major stock indexes closed mixed Wednesday, with the Nasdaq dropping while the Dow Jones industrial average led the market. Tilray ( TLRY), meanwhile, had one of the wildest days in recent memory.
The Dow added 0.6%, thanks largely to JPMorgan Chase ( JPM) and Goldman Sachs ( GS), which took part in a financial sector rally. Dow component Boeing ( BA) rose 0.5% but closed barely above the 364.64 entry in a base within a larger pattern.
The Nasdaq fell 0.1% as it pared losses, and the S&P 500 climbed 0.1%.
Financials outperformed. Treasury yields spiked 4 basis points to 3.08%, the second straight day the benchmark yield has topped 3%.
U.S. Bancorp ( USB) broke out of a cup-with-handle base, topping a 54.82 buy point. But volume was tame and the relative strength line has not made a new high. The bank announced a 23% rise in its quarterly dividend.
With Treasury yields rising, bond-alternative assets did poorly. IBD's four utility industry groups fell 1.4% to 2.5% and were in the lower part of the performance table. Real estate investment trusts and other real estate investments also tumbled. The iShares U.S. Real Estate ETF ( IYR) closed below the 50-day moving average for the first time since May 17.
Homebuilders fell nearly 2% as a group. U.S. housing starts in August were 1.282 million. That was above forecasts. But IHS Markit noted that an unexpected decline in single family permits of 53,000 was a concern. "This was the largest one-month decline in over eight years," IHS noted.
The tech sector was split, with software the main area of weakness while semiconductors held up.
Small caps also were down generally. The Russell 2000 lost 0.5% and made it back to the 50-day moving average. Watch for the index to bounce from the line, as the small-cap benchmark tries to snap out of a two-week slump.
IBD's biotech industry group was in the top 25 of 197 groups tracked by IBD Wednesday, although its performance was inflated by soaring cannabis stocks, particularly Tilray. The Canadian company skyrocketed to exactly 300, up an astonishing 93.6%, before giving up the entire gain. After a late rebound, it closed at 214.06, up 59%. But it was lower in extended trading.
After reaching the peak, shares dropped about 75 points in just 10 minutes. Trading was halted several times as volatility in the stock intensified. Even with the trading halts, volume Wednesday totaled 30.7 million shares, or more than 40% of the stock's floating supply of 75 million shares.
Blue chips in the Dow Jones held solid gains in afternoon trading Wednesday, while technology stocks lagged. JPMorgan ( JPM) and Goldman Sachs ( GS) were top gainers in the Dow, while Intuit ( INTU), Workday ( WDAY) and Adobe Systems ( ADBE) took hits in the Nasdaq 100.
The Dow Jones industrial average was up 0.7% with about one hour left to go in the session. It's closing in quickly on its late January all-time intraday high of 26,616. The S&P 500 edged higher by 0.1%. The Russell 2000 small-cap index lagged, falling 0.5%. Volume on the Nasdaq was tracking lower than Tuesday. NYSE volume rose a bit.
Blue Chips Rise
Inside the Dow, JPMorgan added 3% to 117.84. It's working on a flat base that shows an early entry at 118.39 and conventional entry at 119.43. Boeing ( BA) was another solid gainer in the Dow, up just over 1%. It cleared a base with a 364.64 entry.
Oil reclaimed the 70 level, settling at $71.12 a barrel, up 1.8%. Drillers and exploration and production firms outperformed. Cactus ( WHD) cleared a 37.48 proper buy point early in the session but backed off. Shares still rose 3% to 37.11.
Heavy-volume gainers included Pacira Pharmaceuticals ( PCRX). Shares jumped 7% to 51.25 after Royal Bank of Canada lifted its price target to 55.
Inside the IBD 50, Ulta Beauty ( ULTA) continued to flex its muscle after reporting strong earnings late last month. Shares rose 1.5% to 287.13. It's just below an alternate entry of 290.39. IBD 50 componentSVB Financial ( SIVB) added 1% to 320.08. It's holding support at the 50-day moving average as it works on a flat base with a 333.84 entry.
Sharp decliners Wednesday included Copart ( CPRT) and Medifast ( MED). Shares of Copart plunged 14% on an earnings miss. Longtime leader Medifast, meanwhile, slumped 8%. The maker of weight and disease management products was poised for its fourth heavy-volume decline in five sessions as it tests support at the 50-day moving average.
Industrial, cyclical and financial giants rallied despite moves by both the U.S. and China to impose new tariffs on imports from each other. At around 2:30 p.m. ET, the Dow Jones industrial average kept its decent gains of around 0.7% amid mixed action in the stock market today. Cannabis stock Tilray vaulted to new highs in super-charged volume.
Trade was halted in Tilray ( TRAY) with a little more than an hour remaining in the regular trading session.
The S&P 500 edged 0.1% higher, but leading software and consumer spending-oriented firms cooled. Small caps lagged. The Russell 2000 dropped 0.5%. The Nasdaq composite was off 0.2%.
Meanwhile, the sell-off in long-dated U.S. government debt continued for a second straight day. The yield on the benchmark 10-year Treasury note rose 2 basis points to 3.07%.
WTI crude oil futures lifted 1.2% to $70.69 a barrel, raising the year-to-date gain to nearly 17%.
Wellhead and pressure control equipment supplier Cactus ( WHD), a Feb. 8 IPO at $19 a share, gained as much as 8% and hit a new all-time high of 38.84. That move sent shares briefly past a 37.60 entry in a 16-week base.
At least nine of the 30 components in the Dow Jones industrial average rose 1 point or more, including Wall Street banks JPMorgan Chase ( JPM) and Goldman Sachs ( GS). The blue chip index hit its highest levels since late January, the time right before the major indexes went into their first intermediate correction in more than a year. The Dow industrials is also on pace for a sixth gain in seven sessions.
At 26,417, the Dow is now up almost 7% since Jan. 1. That still trails the 14.8% year-to-date advance of the Nasdaq composite. Volume is running mildly higher vs. the same time Tuesday on the NYSE and lower on the Nasdaq.
Boeing Breaks Out, United Tech In Buy Range
United Technologies ( UTX), the jet engine and elevator maker, gained just 0.6%. At 140.39, the industrial giant extended gains from a breakout past a 136.76 buy point in a long saucer with handle to nearly 3%. Thus, United Tech remains within the 5% buy zone.
Boeing ( BA) led the upside, gaining 2% and surpassing a 364.64 aggressive buy point in a flat base. That base sits within a longer flat base. Volume is running nearly 60% above usual levels.
Wall Street has recently revised earnings forecasts for the aerospace giant higher. Analysts see earnings rising 20% both this year and in 2019.
Big Move Up For This Pot Stock
Tilray spiked up more than 93% and made a new high of 300 before cooling off. The cannabis play, gapping up at the open for a second straight session, has an almost vertical look to its ascent after rising more than 175% in just three trading sessions since Friday's close of 109.05.
As of 2:30 p.m. ET, volume in the Canadian producer of cannabis-based medicines and extracts surged to nearly 24 million shares, already the highest ever since its July 19 debut on the Nasdaq. The float is 75 million shares out of 93 million shares outstanding.
On the downside, Copart ( CPRT) dropped more than 16% and tested support at the long-term 200-day moving average in big turnover. The auctioneer of salvaged vehicles reported earnings of 42 cents a share, up 20% vs. a year ago but well below the Thomson Reuters consensus view of 48 cents.
Business software and services companies took a well-needed break. Square ( SQ) dropped 4% in fast turnover yet remains well above its fast-rising 50-day moving average.
ServiceNow ( NOW) fell nearly 5% to a session low of 182.73 before trimming some losses. The stock has now undercut the 50-day moving average in heavy volume for the third time in seven weeks. The workflow-automation expert slumped below a 194.91 proper buy point in a six-week flat base.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on stock breakouts, chart analysis, sell signals, and financial markets.
The stock market was mixed early Wednesday with the Dow Jones industrial average setting the pace. FANG stock Netflix ( NFLX) advanced after a price-target hike. IBD 50 stock Copart ( CPRT) crashed on weak earnings results. Meanwhile, former software leader Red Hat ( RHT) will report earnings after the stock market close. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Dow Jones industrial average led the stock market action with a 0.6% rise. The S&P 500 followed up with a 0.2% gain. The tech-heavy Nasdaq declined 0.2%.
Among the Dow stocks, Caterpillar ( CAT) fought to regain its long-term 200-day moving average line with a 2% gain Wednesday. Caterpillar looked to extend a win streak to three trading sessions, as it moved up the right side of a new base structure.
On the downside, Nike ( NKE) fell 0.7% after its price target was raised from 76 to 84 at B. Riley FBR. The analyst maintained a neutral rating on the retailer. Nike stock was at the top of the 5% buy range from a 81.10 flat-base entry.
Netflix Leads FANG Stocks
Netflix ( NFLX) reversed lower after Guggenheim upped its price target from 360 to 420. The new price target is a 14% premium to Tuesday's closing price. On Monday, the stock received a boost from its Emmy wins, tying HBO for the most awards. Shares are shaping the right side of a new base formation, as it moved further above the 50-day line.
Among the other FANG stocks, Amazon.com ( AMZN) fell over 1%, as the stock once again neared its 50-day line. Shares rebounded nearly 2% Tuesday.
Earnings: IBD 50 Stock Copart Slammed
Among companies reporting earnings, IBD 50 stock Copart skidded 12% after its fiscal-Q4 earnings results. The salvaged-vehicle auction provider reported weaker-than-expected EPS. The stock was breaking down through its 50-day line and triggered the 7%-8% loss-cutting sell signal from a recent flat base's 60.53 buy point.
After the stock market close, Red Hat ( RHT) will report its Q2 earning results. The Linux software provider is expected to earn 81 cents per share on revenue of $828 million. Shares were trading below their 50- and 200-day moving average lines. Last earnings release, the stock cratered 14%, triggering a sell signal from a flat base's 167.46 buy point.
Stocks opened higher, then turned mixed in Wednesday's Yom Kippur holiday session, as Europe's markets edged higher after China made a trade war promise regarding its currency. Netflix ( NFLX), Praxair ( PX), Caterpillar ( CAT) and Tilray ( TLRY) were among the session's early movers.
The Dow Jones industrial average swung 0.4% higher, as Caterpillar, Walgreens Boots Alliance ( WBA) and Boeing ( BA) all jumped more than 1%. The S&P 500 opened with a 0.2% gain. The Nasdaq Composite edged 0.1% higher. China's JD.com ( JD) led the Nasdaq 100, while Regeneron Pharmaceuticals ( REGN) and Intuitive Surgical ( ISRG) dropped more than 1% apiece. (For updates on this story and other market coverage, visit the Stock Market Today.)
Early action was fairly mild following Tuesday's positive session for U.S. stocks. Global markets gained ground Wednesday, and trade war fears appeared paused after Chinese Premier Li Keqiang assured the World Economic Forum in Tianjin that China was not manipulating its currency and "will by no means stimulate exports by devaluing the yuan."
Netflix Gets Target Hike, Tesla Slips, Tilray Soars (Again)
Netflix jumped more than 1% at the open. Guggenheim raised the stock's price target to 420, from 360, citing upgrades to user experience and company support for its consumer products development. Netflix is climbing the right side of a possible late-stage base.
Nike inched ahead 0.1%. A survey conducted by Canaccord Genuity found the company's "Just Do It" ad campaign featuring former NFL player Colin Kaepernick "had the intended effect of positively skewing (Nike's) brand perception and likely providing a bump in sales." Nike shares ended Tuesday up 2% for the week, and extended after clearing a flat base in August.
Marijuana production and distribution new issue Tilray launched 25% higher, triggering another premarket rally among cannabis stocks. Tilray has booked a 138% gain for September, receiving a boost Tuesday from federal regulators. The stock ended Tuesday more than 800% above its July IPO price. Peers Canopy Growth ( CGC) jumped more than 3.9%. Cronos Group ( CRON) spiked 7.9% at the open.
IBD 50 stock Copart ( CPRT) skidded 13% lower, after a 20% rise in fiscal fourth-quarter earnings missed expectations for a 37% gain. Revenue rose 19%, in line with estimates. The stock ended Tuesday extended after clearing a flat base in August. Wednesday's premarket action suggests the stock will open back below that base's 60.53 buy point, and below its 10-week line of support.
Industrial gases leader Praxair popped 4% higher. News reports said the company and Germany's Linde were preparing to divest assets worth as much as $200 million to clear the way for their proposed $45 billion merger. Much of those assets involved Linde's North American industrial gases business, according to Bloomberg.
Netherlands-based chemicals heavyweight LyondellBasell ( LYB) fell 2.4%, taking the worst hit among S&P 500 stocks. J.P.Morgan cut the stock's rating to underweight, from neutral, and lowered its price target to 95, from 110, citing rising feedstock costs.
Housing Starts Jump/Trade War Update
Housing starts jumped in August, the Commerce Department reported, to an annualized pace of 1.282 million starts. That was a big step up from 1.168 starts in July, easily clearing analyst targets for 1.24 million starts. Building permits, a gauge of upcoming activity, went the other direction — hitting a pace of 1.229 million in August. That was down nearly 6% from July, and below expectations for a rate of 1.315 million permits issued.
The U.S. launched fresh salvos of trade war tariffs late Monday against China. China met the duties on goods valued at $200 billion annually with its own escalation, announcing on Tuesday tariffs levied on $60 billion worth of U.S. imports. President Trump said later Tuesday that if China tariffs targeted "our farmers and our industrial workers and our ranchers," the U.S. would impose tariffs on an additional $267 billion in China-made goods.
Markets In China/Europe Rise; Oil Prices Await Data
China's markets added a second session to their rebound, with the Shanghai Composite and Hong Kong's Hang Seng index each jumping more than 1%. In Japan, Tokyo's Nikkei 225 also popped 1.1%, lifting the benchmark to within 3% of its January high.
Europe's markets held modest gains in afternoon trade, with the FTSE 100 in London, the DAX in Frankfurt and the CAC-40 in Paris all trading up 0.2%.
The dollar slipped vs. the yen. Bonds traded effectively flat. Oil prices were mixed after data released by the American Petroleum Institute late Tuesday showing an increase in weekly oil inventories of 1.25 million barrels, vs. expectations for a 2.74 million-barrel decline. U.S. benchmark West Texas Intermediate traded 0.4% higher and just above $70 per barrel. Brent crude futures were down 0.2% at $78.84. The Energy Information Administration releases official weekly oil inventories data at 10:30 a.m. ET.
Dow Jones futures were little changed early Wednesday, along with S&P 500 futures and Nasdaq 100 futures. Dow Jones giant Boeing ( BA) is flirting with a buy point while marijuana stocks were sharply higher, led by skyrocketing pot stock IPO Tilray ( TLRY). Meanwhile, Tesla ( TSLA) stock edged lower after tumbling Tuesday on news that a DOJ Tesla criminal probe is underway over the Elon Musk tweets about going private with "funding secured."
In Tuesday's stock market trading, the Dow Jones rose 0.7%, the S&P 500 index 0.5% and the Nasdaq composite 0.8% as investors took in stride new Trump tariffs vs. China. But
Dow Jones Futures Today
Dow Jones futures rose a fraction vs. fair value. S&P 500 futures were just below break-even. So were Nasdaq 100 futures. Remember that overnight action in Dow Jones futures and individual stocks may not translate into actual trading.
Boeing stock rose 0.3% to 364.83 in the premarket, which would just edge past a 364.64 flat-base buy point. The aerospace giant tested that entry level on Tuesday, just closing below that key level.
Tilray stock surged 41% in the premarket after sprinting 29% on Tuesday. Cronos Group ( CRON) and Canopy Growth ( CGC) were up 11% and 7%, respectively. The marijuana industry market is surging with more countries and U.S. states legalizing marijuana products for medical or recreational use. Canada marijuana legalization for recreational use starts Oct. 17. Beer and beverage companies are making or mulling alliances with the marijuana industry.
On the other hand, the market cap of Tilray stock and other pot plays is enormous.
DOJ Tesla Criminal Probe, SEC News Hit Tesla Stock
On Tuesday, Tesla confirmed that it has cooperated with a Justice Department investigation, after Bloomberg reported a DOJ Tesla criminal probe is underway. Tesla stock fell 3.35% to 284.96. That's off its Sept. 7 intraday low of 252.25 but well off its Aug. 7 near-intraday peak of 387.46.
Tesla stock edged lower early Wednesday. The New York Times reported after Tuesday's close that the SEC has issued subpoenas to Goldman Sachs and Silver Lake Partners, which Tesla hastily hired in mid-August to advise on its short-lived go-private effort.
The relative strength line, which tracks a stock's performance vs. the S&P 500 index, is close to that Sept. 7 low, which was the worst since late 2016. On a weekly chart, the RS line is back to where it was in early 2014.
Obviously, it's not good news when the Justice Department is conducting a criminal probe. In addition to the DOJ Tesla criminal probe, the electric-car maker also faces related SEC civil probes of the go-private fiasco. But what's really striking is that it's the latest example of CEO Elon Musk's questionable judgment putting the company and Tesla stock at great risk for no real upside.
As some Tesla supporters noted, a slew of big companies are facing DOJ criminal probes, from AstraZeneca ( AZN) to Microsoft ( MSFT) to Volkswagen ( VWAGY) and Wells Fargo ( WFC). But to take the example of Volkswagen, the company cheated on diesel engine emissions tests to avoid costly improvements. Morally and legally wrong, but at least you can understand the motivation behind it.
If VW was robbing a bank, Tesla and Elon Musk were keying cop cars outside a police station.
Elon Musk Judgment
Elon Musk tweeting out that he had "funding secured" for a go-private bid? He didn't have funding secured, at least in any normal sense of the word. So why do it? Was he totally mistaken? Did he impulsively want to go after Tesla shorts? Was he under the influence of drugs? No matter the answer, it's not sound judgment.
When other companies face DOJ, SEC and shareholder lawsuits, they often settle for big cash awards. But they are generally highly profitable with strong cash flow and holdings. Tesla has been burning cash, and doesn't have much left. Perhaps Model 3 production is finally high enough to make Tesla profitable and cash-flow positive. But the company can ill-afford costly settlements secured.
Meanwhile, Elon Musk also smoked pot on a video podcast, with that furor. He also continued to call a British man, one of the Thai cave rescuers, a pedophile, finally drawing a lawsuit. Again, that's not sound judgment.
The stock market rebounded Tuesday, shrugging off the latest moves in the U.S.-China trade war.
The Dow Jones industrial average climbed 0.7%, at one point reaching the highest level since Jan. 31. Dow component Microsoft ( MSFT) rallied 1% after Oppenheimer raised the price target to 127 from 120. Microsoft is holding a major conference next week. The stock is extended from its latest base.
The Nasdaq rose 0.8%. The composite fell nearly to its 50-day moving average Monday and snapped right back Tuesday. The rebound looked similar to one last week, although that one faded once the Nasdaq got to the 8,000 level. The Nasdaq remains below 8,000.
The S&P 500 added 0.5% and is about 12 points from a record high. The Russell 2000 rose 0.5% at the closing bell and it is also trying to rise from its 50-day line.
There was steady improvement in the indexes into midday, then the market started going sideways. Volume rose from Monday's totals, according to preliminary data.
While the market weakened Monday on news that U.S. officials set new tariffs on $200 billion worth of Chinese imports, the market took it all in stride Tuesday. Even after China fought back by announcing tariffs on $60 billion of U.S. goods, the stock market brushed aside trade-war worries.
Rebounding technology stocks helped the Nasdaq on Tuesday. But solar stocks also helped, with the group up more than 4%. Biotechs also contributed, with that group climbing about 1.5%.
Amazon.com ( AMZN) rose after dropping near the 50-day moving average. While the bounce was encouraging, it represented a risky entry because the stock is well above a late-stage breakout.
The Nasdaq led Wall Street higher as top-rated entertainment companies Roku, Netflix, and Apple all painted bullish strokes on a healthy rebound in stocks today. Transport and energy firms also led the upside.
Meanwhile, the yield on the benchmark U.S. Treasury 10-year bond jumped 5 basis points to 3.04%, the highest in nearly three months.
The Nasdaq composite led the way, rising nearly 1% following Monday's 1.4% drubbing. Apple ( AAPL) gave back some of its early 1.8% advance to rise around 0.5%.
Yet as a clear emblem of the stock's leadership, the iPhone, Macbook, Apple Watch and digital services giant is riding a solid 18.3% gain quarter to date.
Please read this Monday column in IBD Stock Market Today to get a flavor of both a key offense-type sell rule as well as the bullish fundamentals for Apple going forward. The stock, sporting a $1.06 trillion market cap, continues to also show a decent air pocket above its fast-rising 50-day moving average.
The S&P 500 gained nearly 0.7%. The Dow Jones industrial average rose 0.9% as volume continued to climb vs. the same time on Monday. The Russell 2000 lagged a bit, up less than 0.7%. The Nasdaq 100 rallied 1% as The Innovator IBD 50 ( FFTY) rose 1.3%.
These Stocks Continue To Lead
Other entertainment-oriented stocks helping to sustain the current bull market include the following:
Netflix ( NFLX) gained more than 3% and, following glowing results at Monday's Emmy Awards, is aiming to halt a three-day slide. The stock and longtime market leader is working on a new cup-style base.
Spotify ( SPOT) also rallied, rising more than 1.2% to 177.32 in quiet trade. Notice on a daily chart how on Sept. 5 the stock cleaved right through its 50-day moving average, a clear sign of heavy institutional selling.
A prolonged period spent below this key support-and-resistance line would spark a defensive sell signal. The online music giant, which finished its stock market debut in April at 149, has rallied as much as 33% to a high of 198.99. A new base may be forming.
Among the eight Leaderboard stocks, Etsy ( ETSY) scooped back some of Monday's sharp losses with a 3% lift to 51.83. Volume was running nearly 20% above average levels with an hour left to go in the regular session.
The consensus forecast for 2018 earnings in the online marketplace for artists and small batch crafts makers, the category that e-commerce site Etsy serves, has gone down a touch. Yet analysts polled by Thomson Reuters still see earnings rising 65% to 43 cents a share this year, then increasing to 68 cents in 2019.
Railroad stocks got a boost on an analyst upgrade of Union Pacific ( UNP). The Omaha, Neb., megacap railroad gapped up 4.4% to 163.65, extending gains from a 148.43 correct buy point in a bullish base on base.
Union Pacific is also up 22% year to date, head and shoulders above an 8% advance for the S&P 500.
Another Transport Stock Leader
In the auto sector, Ferrari ( RACE) sped ahead 3% to 137.15 in volume juiced up 88% above normal levels. Ferrari's average turnover is 926,000 shares per day.
IBD's automaker group is down more than 9% year to date and ranks a lowly 185th, but the price-weighted performance has been hampered by short-term volatility in Tesla ( TSLA) and poor price action by the likes of General Motors ( GM) (RS Rating of 16 on a scale of 1 to 99) and Ford Motor ( F) (RS 12).
The Dow Jones industrial average and S&P 500 added about 0.6% each. Volumes on the NYSE and Nasdaq were tracking slightly higher than Monday's levels.
Intel ( INTC) and Nike ( NKE) were top gainers in the Dow, up around 2% each.
The Nasdaq composite suffered a harsh distribution day Monday, falling 1.4% in higher volume. It was the index's fourth decline in higher volume vs. the prior session since Sept. 4. Also notable was the weak action in leading growth stocks, particularly in the software sector. More than half of Monday's worst-10 performing industry groups were software related.
But the selling in software stocks Monday did little to damage the charts of leading stocks. Sector LeadersServiceNow ( NOW), Salesforce.com ( CRM) and Adobe Systems ( ADBE) continue to hold near highs.
Nasdaq Shrugs Off New China Tariffs
President Trump late Monday announced 10% tariffs on $200 billion of Chinese imports. If no deal is reached with China, the tariffs will rise to 25% on Jan. 1. China responded with tariffs on $60 billion of U.S. goods.
In the stock market today, heavy volume gainers included railroad operator Union Pacific ( UNP). Shares jumped more than 4% to a new high, helped by an upgrade from Loop Capital to buy from hold. Group peer Norfolk Southern ( NSC) rallied nearly 4%.
Meanwhile, leading marijuana stock Tilray ( TLRY) surged another 25% to a new high after it received approval from the Drug Enforcement Administration to import marijuana to the U.S. for medical research.
Inside the IBD 50, Ligand Pharmaceuticals ( LGND), Match Group ( MTCH) and Grubhub ( GRUB) outperformed with gains ranging from 2.5% to 5%. The Innovator IBD 50 ETF ( FFTY) outpaced the broad market, rising 1%.
U.S. stock indexes rumbled higher near midday Tuesday as the Nasdaq bounced off its 50-day moving average. Noise on tariffs appeared to have little effect on stocks.
The Nasdaq rose 1% while the S&P 500 and the Dow Jones industrial average advanced 0.6% and 0.5%, respectively. Small caps added 0.4%, as gauged by the Russell 2000.
Volume increased on both major exchanges vs. the same time Monday.
In the IBD 50, a list of the best stocks in fundamentals and technicals, winners led losers by a 7-1 ratio. Netflix ( NFLX) climbed 3%, retaking its 50-day line.
Other IBD 50 stocks rising included health savings account provider HealthEquity ( HQY), up 2.5%; Mastercard ( MA), up 1.5%; and Apple ( AAPL), up 1%.
Early Monday evening, the U.S. imposed new tariffs on $200 billion in Chinese goods. China responded with tariffs on $60 billion in U.S. goods. The New York Times noted that the $60 billion covers nearly everything China buys from the United States. The Times says China is running out of options.
This could explain, at least partly, why the stock market isn't panicking.
Blue Chips Mostly Up
Blue chips were mostly up Tuesday, including some stocks with China exposure. Dow components with heavy China exposure include Apple, Caterpillar ( CAT), Nike ( NKE) and Boeing ( BA).
In the Nasdaq 100, Micron Technology ( MU) popped 4% in twice its usual volume. The stock is 29% off its high. Micron is based in Boise, Idaho, but about 51% of its revenue is tied to China.
Breakouts were scarce, but a stock that has never posted an annual profit gapped up 95% in huge volume.
San Diego-based biomed Vikings Therapeutics ( VKTX) had formed a cup-with-handle base with a 13.47 buy point.
The stock roared to 24 and then pulled back to just under 20. The small-cap company reported positive results from a trial of a drug for nonalcoholic fatty liver disease.
Among IBD's 197 industry groups, oil-tied groups had the most gainers in the day's 12 top performers.
Meat, dairy and packaged foods took the hardest hits.
The stock market rose modestly early Tuesday after the Trump Administration imposed tariffs on $200 billion in Chinese imports. China responded with new tariffs on U.S. goods worth $60 billion, according to a Reuters report. FANG stock Facebook ( FB) turned higher after a price-target cut. Meanwhile, IBD 50 stock Ligand Pharmaceuticals ( LGND) hit a new high. (For updates on this story and other market coverage, visit the Stock Market Today.)
The tech-heavy Nasdaq led the stock market action with a 0.8% rise. The Dow Jones industrial average and S&P 500 followed up with gains of about 0.3% apiece.
Among the Dow stocks, Apple ( AAPL) was a top performer with an over-1% gain, on pace to snap a two-day losing streak. Shares were about 4% off their record highs.
On the downside, Walt Disney ( DIS) dropped 0.5%, as it fell further below its 50-day line. The stock is building a flat base with a 118 buy point.
Earnings: FedEx, Oracle, AutoZone Tumble
Among companies reporting earnings, delivery giant FedEx ( FDX) reported weaker-than-expected fiscal-Q1 earnings after the stock market close Monday. FedEx stock was approaching a 266.77 double-bottom entry in a consolidation that stretches back to mid-January. But the stock fell 2.5% Tuesday to its 200-day line.
Oracle ( ORCL) dropped 4% after its quarterly earnings results missed revenue estimates. Shares are trading below two separate handle entries: buy points of 49.10 and a 49.80. The stock also broke below its 50- and 200-day lines Tuesday.
AutoZone ( AZO) skidded 4% after missing fiscal-Q4 revenue estimates early Tuesday. Shares were testing the 50-day line and a recent 724.64 cup-with-handle entry.
Among the FANG stocks, Facebook reversed higher after its price target was cut from 205 to 195 at JPMorgan. Shares are about 8% above their 52-week low of 149.02 set back on March 26.
IBD 50 Stocks: Ligand Pharmaceuticals Hits New High
Among the top growth stocks, Ligand Pharmaceuticals hit a new high with an over-6% advance Tuesday. Shares are well extended from a cup-shaped base's 184.89 buy point after a breakout on May 15.
On the downside, Planet Fitness ( PLNT) declined 1%, as it tested its 50-day line. Shares were in the midst of forming a flat base with a 53.51 buy point.
Among stocks, Oracle ( ORCL), AutoZone ( AZO), General Mills ( GIS) and Apogee ( APOG) dived after reporting quarterly results. Netflix ( NFLX) jumped after earning a total of 30 Emmy wins. Railroad Union Pacific ( UNP) spiked on an analyst upgrade. Pot stock Tilray ( TLRY) headed a premarket rally among the top cannabis names. Oil prices climbed as data showed sharp declines in exports from Iran. Meanwhile, news reports said Saudi Arabia was comfortable with oil priced above $80.
The Nasdaq Composite led, up 0.6% in early action with Netflix leading the Nasdaq 100. The Dow Jones industrial average and S&P 500 each rose 0.4%. Caterpillar ( CAT), Apple ( AAPL) and Chevron ( CVX) notched the strongest opening gains on the Dow.
On the S&P 500, General Mills and AutoZone fell hardest. Union Pacific led the index. (For updates on this story and other market coverage, visit the Stock Market Today.)
Global Markets Gain, Despite Tariffs: China Retaliates
China responded Tuesday morning to the new round of tariffs by announcing retaliatory tariffs on U.S. imports to China totaling $60 billion per year. The duties are set to go into effect Sept. 24, ranging from 5% to 10%.
China's markets opened lower Tuesday as the yuan dived on news of President Trump's new 10% tariffs. Those are set to increase to 25% by the end of the year. But buyers stepped in to prop the yuan, and stocks shook off the trade war jitters and reversed higher. The Shanghai Composite climbed 1.8%. Hong Kong's Hang Seng Index notched a 0.6% gain. Tokyo reopened from its holiday break with a 1.4% advance.
Europe's markets opened flat, climbed through morning trade, then turned mixed. Frankfurt's DAX and Paris' CAC-40 defended gains of 0.2% gains each in afternoon trade. London's FTSE 100 slipped out of its early gain and into fractional losses.
Netflix Tops HBO, Tilray Gets DEA Nod, Union Pacific Strategizes
Netflix swung up 1.7%, fueled by a strong showing at Monday's Emmy Awards in Los Angeles. Netflix for the first time topped AT&T's ( T) HBO with wins in 30 Emmy categories, vs. 29 for HBO. The FANG stock is wrestling to regain support at its 10-week moving average. Its consolidation is now 27% deep and shaping up into a possible fourth-stage cup base.
Tilray powered up 11.7%. The Drug Enforcement Administration approved the company's plan to import marijuana-based pills from Canada for clinical trials. The pills will be tested for effectiveness in treating a neurological movement disorder called essential tremor.
A steep five-week advance has left Tilray 250% above a 34.20 buy point after clearing an IPO base in August. Marijuana peers Cronos Group ( CRON) surged 7.2%. Canopy Growth ( CGC) rose more than 2%.
Union Pacific jumped 4.8% after an upgrade to buy, from hold, by Loop Capital. The railroad late Monday released a strategic plan aimed at improving scheduling and financial performance, set to take effect Oct. 1. Union Pacific shares ended Monday at 156.71, just beyond a buy range and above a flat-base buy point at 148.43.
Oracle, AutoZone Slide On Earnings; AthenaHealth Tanks
AutoZone caved nearly 3%, despite fiscal fourth-quarter earnings that soared past analyst expectations. A 1% revenue gain stopped short of views, and operating expenses jumped. The stock has been unable to exit a buy range after clearing a cup-with-handle buy point in August. Auto parts peer Advance Auto Parts ( AAP) gained 1.5% in early trade.
Medical software leader AthenaHealth ( ATHN) tumbled 5.9%. News reports said private investor Elliott Management backed away from its $160-per-share bid for the company. In May, Elliott Management reportedly agreed to pay that price, or $6.9 billion in all, to acquire the company. AthenaHealth extended its deadline for bids by 10 days, to next Thursday.
Oil Prices Top $70 On Iran, Saudi News
Oil prices rose after data showed Iran's oil exports were down as much as 35% since Trump backed the U.S. out of the anti-nuclear deal with Iran. Buyers are exiting deals with Iran ahead of U.S. sanctions due to take effect in November. Prices were also boosted by news reports that Saudi Arabia was comfortable with Brent crude trading above $80 per barrel. Oil prices rose 1.6% early Tuesday, sending West Texas Intermediate above the $70 per barrel mark.
The National Association of Home Builders releases its September builders confidence survey at 10 a.m. ET.
Dow Jones futures reversed slightly higher Tuesday morning, along with S&P 500 futures and Nasdaq futures. President Donald Trump imposed tariffs on $200 billion worth of Chinese goods, in a big escalation of the China trade war. In Monday's session, the Nasdaq composite sold off sharply, while the S&P 500 index and Dow Jones fell more modestly. The FANG stocks of Facebook ( FB), Amazon.com ( AMZN), Netflix ( NFLX) and Google parent Alphabet ( GOOGL) were all notable losers Monday, but were slightly higher Tuesday morning, aside from Facebook. Chinese-listed stocks and the Shanghai composite also gained Tuesday.
Dow Jones Futures Today
Dow Jones futures initially retreated on the Trump tariffs announcement, but were up 0.2% vs. fair value. S&P 500 futures advanced nearly 0.2%. Nasdaq 100 futures climbed a fraction. Remember that extended trading in Dow Jones futures, Apple stock and more often doesn't always translate into regular-session trading.
During Monday's stock market trading, the Nasdaq composite fell 1.4%, approaching its 50-day moving average. The S&P 500 index lost 0.6% and the Dow Jones 0.4%. Keep in mind that stocks had rallied last week on hopes for China trade talks, not new Trump tariffs.
Investors may have already already priced in the impact of new Trump tariffs, even with the prospect of higher and additional duties.
Trump Tariffs Escalate China Trade War
Trump tariffs hit an additional $200 billion in Chinese imports, as expected. They'll start on Sept. 24 with a 10% rate but rise to 25% by year-end. The U.S. set a 25% tariff on an initial $50 billion of Chinese goods.
Beijing has vowed to retaliate with tariffs on $60 billion in U.S. goods, after matching dollar-for-dollar on the first $50 billion. China also reportedly is mulling nontariff moves to hurt U.S. businesses with China exposure.
Trump said he'll impose tariffs on a further $267 billion worth of Chinese goods if Beijing retaliates. That would mean Trump tariffs on essentially all Chinese imports.
Apple, FANG Stocks Tumble Monday
Apple stock slid 2.7% on Monday, even with reports that the new Trump tariffs would spare the Apple Watch and some other products. A member of the Dow Jones, S&P 500 index and Nasdaq composite, Apple stock also fell on indications that Apple iPhone XS preorders were below initial iPhone X preorders last year.
Facebook stock fell just 1.1%, but hit its worst level since April 25. The relative strength line, which tracks a stock's performance vs. the S&P 500 index, has fallen to its worst level since the start of 2017.
Amazon stock skidded 3.2%, but found some support at its 50-day line intraday.
Netflix stock retreated 3.9%, undercutting its 50-day moving average.
Google stock retreated 1.5% to its lowest level in more than two months. Google's RS line is the lowest since the end of May.
Apple, Amazon, Netflix and Google stock all edged higher Tuesday morning. Those were just a small portion of Monday's losses.
Facebook stock fell 1% early Tuesday as JPMorgan Chase cut its price target to 195 from 205.
China Stocks Rebound
Alibaba ( BABA) fell 3.55% on Monday, near 52-week lows. Recent e-commerce IPO Pinduouo ( PDD), which broke out Thursday then fell back Friday, retreated 7.5% on Monday.
Alibaba and Pinduouo stock were up Tuesday.
The Shanghai composite on Monday finished at its worst close since November 2014. But it rebounded 1.8% Tuesday after trading little changed in morning trading.
Tech stocks ended with stiff losses Monday as worries about the potential for more tariffs on Chinese imports weighed. FAANG stocks weren't immune to the selling as Amazon.com ( AMZN) and Netflix ( NFLX) ended with losses of more than 3%.
Amazon came close to a test of the 50-day moving average but didn't quite touch the line.
The Nasdaq composite lost more than 1.4% and the S&P 500 gave back nearly 0.6%. The Dow Jones industrial average eased nearly 0.4%. Preliminary data showed volume on the Nasdaq coming in higher than Friday's level, resulting in another distribution day, as tech stocks were weak across the board.
Apple ( AAPL) was one of the worst decliners in the Dow Jones, down nearly 2.7%.
Top-performing software stocks, the best-performing sector in the market currently, were weak across the board. IBD's enterprise software group, the group with the broadest leadership in the market currently, was the worst performer, down just over 3%.
Ceridian ( CDAY) was another nice gainer, up nearly 6%. The stock showed good follow through after a bullish breakout Friday over the 39.45 cup-with-handle buy point. Ceridian was a day ahead of Friday's breakout in IBD's Stock of the Day feature.
Tech Stocks Hit In Nasdaq 100
Besides the FAANG stocks, other big decliners in the Nasdaq 100 included JD.com ( JD), Workday ( WDAY) and Autodesk ( ADSK).
Inside the IBD 50, Viper Energy Partners ( VNOM) outperformed, rising 3%. It's trading tightly near highs and could try to clear a short consolidation soon.
Benchmark crude oil futures for October delivery edged nearly 0.4% lower to $68.75 a barrel after an early rally of more than 1%.
Apple stock and fellow tech leader Amazon.com remained a drag on stocks today, especially on the Nasdaq, amid growing anxiety over import tariffs between the U.S. and fellow economic superpower China.
The Nasdaq composite fell 1% and remained near session lows.
The S&P 500 and Dow Jones industrial average fared better, down roughly 0.3% and 0.2%, respectively. Defensive and cyclical shares bucked the decline. Dairy, gold mining, transportation equipment, fertilizer, steel and airline industry groups all rose 1.4% or more.
The Innovator IBD 50 ( FFTY) ETF dropped 1.6% to 37.49 in below-average trade. The growth-stock-focused exchange traded fund is up 13% year to date after a 34% rally in 2017.
Volume was running sharply higher vs. the same time Friday on the Nasdaq but shrinking on the NYSE.
No Defensive Sell Rule Yet
Apple ( AAPL) sank nearly 1.7% while Amazon ( AMZN) fell more than 2%. Both market leaders remain in healthy price uptrends. Neither has issued a defense-type sell signal, such as a big undercut of the 10-week moving average.
In contrast, Google owner Alphabet ( GOOGL) lost just 0.6% and Intel ( INTC) edged higher. Yet the two fellow megacap techs have been in basing mode for at least a few months.
Apple Stock Today
Apple, at 220.10, still trades well above its rising 50-day moving average and is just 4% below an all-time high.
The company has seen a new upward revision to earnings forecasts.
The Street now expects earnings to grow 28% to $11.77 a share in the current fiscal year ending in September, then another 16% to $13.67 in FY 2019. The company is making strong strides in digital services (including payment processing and online music), wearables and smartphones.
Analysts on consensus also expect total revenue to rise 17% in the current fiscal fourth quarter to $61.32 billion and up 5% to a record $92.28 billion for the December-ending fiscal first quarter.
This Industry Group Leads Sell-Off
Business software stocks cooled off after a solid run-up the past few weeks.
ServiceNow ( NOW) dropped more than 3% to 195.39 in roughly flat volume. Shares in the workflow automation expert are now back below a 194.91 prime buy point in a narrow flat base.
Adobe Systems ( ADBE) dropped nearly 2% to 270.21 in light turnover. The digital marketing and imaging software titan last week reported robust fiscal Q3 results as profits jumped 57% on a 24% rise in revenue to $2.29 billion.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on growth stocks, correct buy points, chart analysis, sell signals, and financial markets.
The Nasdaq led stocks lower Monday afternoon as many of the leading sectors were the poorest performers of the day, while tech leaders such as Apple ( AAPL) and Amazon.com ( AMZN) weighed.
Stocks started the session lower on news that the U.S. is moving forward with tariffs on some $200 billion in Chinese imports. Later, National Economic Council head Larry Kudlow said new tariffs could be announced "soon," and the White House is not satisfied with trade talks with China.
Now back below the 8,000 mark, the Nasdaq lost 0.9% and is dropping back near its 50-day moving average. The Invesco QQQ Trust ETF ( QQQ), which tracks the Nasdaq 100, was down 0.8% as some of the largest Nasdaq components came under fire.
The S&P 500 lost 0.3% as it got some help from some cyclical stocks, such as steelmakers. The Dow Jones industrial average held up better, off just 0.1%. Industrial companies Caterpillar ( CAT), 3M ( MMM) and DowDuPont ( DWDP) had some of the largest gains.
Small caps, where technology companies also have a big representation, were lower too, with the Russell 2000 off 0.8%.
Volume was tracking lower on the NYSE and higher on the Nasdaq compared with the same time Friday. Declining stocks led by a nearly 12-7 ratio on the Nasdaq and by about 9-to-7 on the NYSE.
Transportation stocks, which had been leading the market, fared poorly. Logistics, trucking and shipping groups were down more than 1%. But airlines and transportation-equipment groups surged more than 1.5%.
Internet, software, health care and retail — which also are leading sectors — were out of favor Monday. Industry groups in those sectors crowded the bottom 30 of 197 groups in Monday's industry performance table.
Some defensive industry groups climbed. Agricultural stocks such as dairy products and fertilizers rallied. Real estate investment trusts and drug wholesalers also gained ground.
Mining stocks also performed well, with the SPDR S&P Metals & Mining ETF ( XME) up 1.6%.
The stock market stumbled in late-morning trade Monday as techs pulled the U.S. stock indexes down. Meanwhile, trade disputes saddled the bulls with recurring worries.
The tech-heavy Nasdaq declined 0.9%, while the large-cap S&P 500 fell 0.3%. Blue-chip stocks were about evenly split between winners and losers in the Dow, which was 0.1% under the break-even line. Small caps retreated 0.6%.
Volume fell on the NYSE but rose on the Nasdaq compared with the same time Friday.
Canada is poised to restart trade talks with the U.S. later this week, according to Bloomberg News.
In the meantime, neither China nor the U.S. seemed ready to make concessions on trade. China's Shanghai Composite notched a new low Monday. The index is 26% off its late-January high.
President Trump has vowed to slap China with $200 billion in tariffs as early as today.
Breakouts on Monday included fertilizer maker Mosaic ( MOS). The stock jumped 5% in strong volume. Mosaic cleared a 32.42 buy point but then struggled to hold above the entry. The Street expects Mosaic to grow earnings 54% this year and 24% next year.
Elite stocks were struggling. Facebook ( FB) dropped 1% in above-average volume. Amazon.com ( AMZN) slid 2% in fast trade but found support at its 50-day line. Netflix ( NFLX) faded 2% in slow trade as it poked under its 50-day line. Alphabet ( GOOGL) sank 1% in moderate volume. Apple ( AAPL) skidded 2% in heavy volume.
In the Dow, Caterpillar ( CAT) advanced about 2%. The construction-equipment maker is trying to regain its 200-day moving average. The two oil stocks in the Dow rose. Chevron ( CVX) and Exxon Mobil ( XOM) added 0.4% and 0.7%, respectively. Light sweet crude oil gained 1% on supply concerns but then reversed to a 0.2% gain.
Among IBD's 197 industry groups, steelmakers, gold miners and defensive issues such as dairy and tobacco rose. The market-leading software sector lost ground.
The stock market turned mixed early Monday as tech stocks sold off. President Trump is preparing to unleash another round of tariffs on China ahead of scheduled talks with Beijing. The tariffs are expected to impact $200 billion of goods, driving top Chinese stocks Momo ( MOMO) and Alibaba ( BABA) lower. Meanwhile, Leaderboard stock and top retail idea Lululemon ( LULU) advanced to a new high. (For updates on this story and other market coverage, visit the Stock Market Today.)
The tech-heavy Nasdaq stumbled 0.9% to lead the major stock market indexes lower. The S&P 500 slipped 0.2%, while the Dow Jones industrial average traded with a fractional gain. Caterpillar ( CAT) propped up the Dow, rising 1.3% after reporting its sales numbers for August.
Among other Dow stocks, McDonald's ( MCD) broke down below its 50-day line, falling almost 2%. The fast-food chain saw its price target cut from 182 to 175 at JPMorgan. Apple fell over 1% early Monday. Shares traded about 4% off its 52-week high, about 14% from a flat base's 194.30 entry.
FedEx Earnings On Tap
Among companies reporting earnings, delivery giant FedEx ( FDX) will report its fiscal-Q1 earnings after the stock market close. Analysts expect the company to earn $3.78 per share on revenue of $16.88 billion. FedEx stock is approaching a 266.77 double-bottom entry in a consolidation that stretches back to mid-January. Shares rose almost 1% Monday.
Among the FANG stocks, Amazon.com ( AMZN) declined more than 4%, extending a losing streak to three trading sessions. But shares bounced off the morning lows, finding support at their 50-day moving average line — a key support level.
IBD 50 Stocks — Lululemon Leads
Among the top growth stocks, Lululemon advanced 3% after Wells Fargo upgraded the stock from market perform to outperform. The price target was raised from 144 to 200 — a 30% premium to Friday's closing price. Shares are well extended from their 50-day line.
On the downside, Momo fell over 2%, as Friday's cup-with-handle breakout faltered. The stock moved above a 47.85 buy point Friday but closed below that level, according to MarketSmith chart analysis. A key flaw is the stock's lagging relative strength line. It is well off its previous highs. Ideally, the RS line should reach a new high on the breakout day.
Former IBD 50 stock Alibaba slid almost 3%. The stock is about 25% off its 52-week high after peaking on June 5. Shares are below their 50- and 200-day moving averages.
Stocks opened to narrow losses Monday as rising trade war tensions and additional news from Turkey, China and Britain weighed on global trade.
JD.com ( JD) led the early declines among large-cap China-based names, and new issue Qutoutiao ( QTT)dropped hard at the starting bell. McDonald's ( AAPL) veered lower as an analyst cut its price target. Chip stocks were mixed, with Broadcom ( AVGO) rising after an analyst upgrade. Israel's Teva ( TEVA) leapt on a new drug approval.
Monday's leading stocks near buy points included Adobe Systems ( ADBE), Fleetcor Technologies ( FLT) and Qualys ( QLYS).
The Nasdaq Composite dropped 0.2%, while the Dow Jones industrial average and the S&P 500 dipped a fraction each. McDonald's fell hardest among Dow stocks. Broadcom led the Nasdaq 100 list, JD.com was the laggard. Fertilizer producer Mosaic ( MOS) jumped to lead S&P 500 stocks, McDonald's and Advanced Micro Devices ( AMD) fell to the bottom of that index.
The New York Federal Reserve reported that manufacturing growth slowed sharply in September, sending its Empire State Manufacturing Survey to a reading of 19 for the month, down from 25.6 in August and below views for a tally of 23. New orders, shipments, inventories and employment numbers were all positive across the survey, but below August's pace of growth, the report said.
Turkey's Lira, China Typhoon, New U.S. Tariffs On China
A number of negative factors rattled global markets Monday. Turkey's lira continued its dive following a move by Turkish President Erdogan to seize opposition party banking assets. In China, a typhoon tore into the south China coast late Sunday after wreaking havoc in the Philippines. The Hong Kong Stock Exchange operated a normal session, but casinos in Macau were for the first time closed due to a storm.
Oil prices jumped as fears increased regarding supply issues in Venezuela and Iran. The International Monetary Fund joined the voices cautioning Britain that crashing out of the European Union without a trade agreement would inflict substantial damage on the U.K. economy.
The biggest shake came from the White House, which announced a previously threatened round of tariffs on an additional $200 billion in China made goods could go into effect as soon as Monday. The pressure followed last week's news that Treasury Secretary Steven Mnuchin would lead a fresh round of trade negotiations with Chinese delegates invited to Washington before the end of the month.
Global markets reacted predictably. In China, Hong Kong's Hang Seng Index tumbled 1.3%. The Shanghai Composite dived 1.1%. In Japan, the Tokyo Stock Exchange was closed due to a holiday.
Europe's markets trimmed their morning losses in afternoon trade. Frankfurt's DAX was down 0.3%. The FTSE 100 in London and CAC-40 in Paris each dipped less than 0.1%.
Broadcom Upgraded, Qualys Eyes Buy Point; China IPOs Tumbles
On the Dow, McDonald's tumbled 2.5% after J.P. Morgan trimmed the stock's price target to 175 from 182. The loss sent shares back below the stock's 10-week moving average, to retest recent lows in a nine-month consolidation.
China-based JD.com toppled 3.4% in premarket trade. The online retail giant fell nearly 14% last week, even as China's market rebounded on trade war optimism. Shares are down 40% from a mid-June high.
Online news site Qutoutiao collapsed 21% in opening trade. The China-based IPO went public Friday at 7 and rose 128% in its first day of trade. China IPO peer Nio ( NIO), a maker of luxury electric automobiles, dived 8.5% in early trade.
Chipmaker Broadcom gained 1% after Nomura raised its rating on the stock to buy, from neutral. Broadcom has been testing resistance at its 10-week moving average, attempting to climb the right side of a possible 3-month base pattern.
A check on leading stocks near buy points showed Adobe, Fleetcor and Qualys trading lower just after the starting bell.
Adobe ended Friday's session still in buy range above a flat base buy point at 263.93. Fleetcor closed Friday 2% below a 226.02 buy point in a flat base. Qualys was within 4% of a 98.40 buy point in an eight-week cup base.
Teva surged 4% as BTIG Research upgraded the stock to neutral, from well, following approval of the company's Ajovy injection to prevent anti-migraine by the Food and Drug Administration. Teva shares are recovering from a test of 200-week support after a failed breakout attempt in August.
Oracle ( ORCL) and FedEx ( FDX) are scheduled to report after the market closes.
Dow Jones futures fell slightly Monday morning, along with S&P 500 futures and Nasdaq futures as the China trade war seems set to escalate this week. President Donald Trump extolled the benefits of tariffs for the U.S. economy on Twitter Monday morning. He's expected to impose tariffs on $200 billion in Chinese goods, with China vowing retaliation. Those actions could hurt U.S.-listed Chinese stocks, chip stocks such as Micron Technology ( MU), as well Dow Jones giants Apple ( AAPL) and Boeing ( BA).
That also comes after the Dow Jones, Nasdaq composite and S&P 500 index all rallied last week in large part on hopes for new U.S.-China trade talks. Chinese stocks and chip stocks were big winners from weekly lows. Micron stock, which reports earnings later this week, closed lower for the week but well off weekly lows. Apple stock rose modestly and Boeing stock closed in on a buy point.
Meanwhile, Oracle ( ORCL) and FedEx ( FDX) will report earnings on Monday. Oracle stock is flirting with a buy point, but has tumbled after the last four earnings reports as cloud growth has disappointed. FedEx stock is working on its own double-bottom consolidation. FedEx could provide some insight into the health of the U.S. and global economy and hints about holiday spending.
Dow Jones Futures Today
Dow Jones futures dipped 0.1% vs. fair value. S&P 500 futures sank about 0.1%. Nasdaq 100 futures retreated nearly 0.3%, as techs lag. The 10-year Treasury yield just topped 3%.
Apple fell 0.7% before the open on the stock market today. Micron stock slid 1.5%. Boeing was off 0.6%. As for U.S.-listed Chinese stocks, Alibaba ( BABA) retreated 1.9% and recent e-commerce IPO Pinduoduo ( PDD), which broke out on Thursday but fell back on Friday, sank 3%.
Remember that extended trading in Dow Jones futures, Apple stock and more often doesn't translate into regular-session trading. That's especially true in situations like the China trade war, where shifting headlines can have a dramatic effect on stock market trading.
Over in Asia, the Shanghai composite fell 1.1% to its lowest close since November 2014. Hong Kong's Hang Seng retreated 1.3%. Japan's Nikkei was closed for a holiday.
In European trading, U.K., French and German indexes were modestly lower.
China Trade War
The U.S. reportedly will slap tariffs on $200 billion worth of Chinese goods, perhaps as soon as Monday. That's on top of the 25% Trump tariffs on $50 billion in Chinese imports. But the U.S. is likely to set a 10% tariff rate on the $200 billion, not 25% as he has also mulled. That could mute negative stock market reaction.
China will not be able to match Trump tariffs dollar for dollar going forward. Beijing has vowed to impose tariffs on some $60 billion worth of U.S. goods if the U.S. goes ahead with duties on $200 billion more of Chinese wares. China could restrict sales of components, equipment and materials key to U.S. manufacturers' supply chains, the Wall Street Journal reported Sunday. That would affect big U.S. multinationals such as Micron Technology and Apple, even without direct tariffs.
China also likely would back out of new U.S.-China trade talks if the latest Trump tariffs kick in.
Trump has not said anything official regarding possible new China tariffs, but he did say that tariffs have put the U.S. in a "very strong bargaining position," with many gains and few downsides.
Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be "Tariffed!"
A follow-up tweet said "Our Steel Industry is the talk of the World."
A China trade war escalation could have a big impact on the stock market and economy.
UBS economists have predicted GDP growth could fall to 1.6% in the fourth quarter with 10% tariffs on $200 billion of Chinese goods, but rebound to 3% in Q1. A 25% Trump tariff could slow growth to less than 1% in Q4 and lead to a more persistent slowdown.
Canada Nafta Talks
Time is running short on U.S.-Canada trade talks to revise Nafta. If Washington and Ottowa can't agree on basic terms this week, there may not be final to finalize and approve the trilateral agreement including Mexico before Andres Manuel Lopez Obrador takes over as Mexico's president on Dec. 1.
Small caps were the strongest performers Friday as the Russell 2000 ended with a gain of 0.5%. The Nasdaq composite, S&P 500 and Dow Jones closed out the week mostly flat. United Technologies ( UTX) and Boeing ( BA) outperformed in the Dow, while Adobe Systems ( ADBE), Align Technology ( ALGN) and Micron Technology ( MU) were stout gainers in the Nasdaq 100.
The Nasdaq fell as much as 0.4% Friday, weighed down by reports that President Trump is ready to move forward with $200 billion in tariffs on Chinese imports. For the week, the Nasdaq rose 1.4%; the S&P 500 added 1.2%; and the Dow rose 0.9%.
Preliminary data showed volume on the NYSE and Nasdaq coming in lower than Thursday's levels, more so on the Nasdaq.
Restaurant chain Dave & Buster's ( PLAY) was another earnings winner. Shares surged to a 52-week high, rising nearly 8% to 62.05. Friday's strong move qualified as a breakout from a three-weeks-tight pattern. The buy point was 58.96.
Elsewhere, Regenxbio ( RGNX) cleared a cup-with-handle base, soaring 10% to 81.20. The bullish move resulted in the stock being added to IBD's Swing Trader premium product.
Software Stocks Rise Again
The stock market yielded another cup-with-handle breakout Friday. Software stock Ceridian ( CDAY) jumped 11.5% to 41.45. It closed well within the 5% buy zone from the 39.45 entry. Ceridian was featured in Thursday's IBD Stock Of The Day column.
RealPage ( RP), an industry group peer of Ceridian, was another top gainer in the IBD 50, up nearly 2%. It's still within the 5% buy zone after a breakout from a flat base with a 62.05 entry.
Align Technology also outperformed with a gain of nearly 3%. It's still in buy range from the 385.10 buy point after a low-volume breakout. It was featured in today's Sector Leaders column.
Shortly before 3 p.m. ET, the Nasdaq composite and S&P 500 were down 0.1% and on track to notch gains for the week.
The Dow Jones industrial average also was down 0.1%. The Dow edged past the Aug. 29 high of 26,167 and touched the highest level since Feb. 1. But the index still may be facing resistance at that level. The Nasdaq and S&P 500 are a bit farther away from their late-August highs.
Volume was lower in the stock market compared with the same time Thursday. Advancers led decliners by 7-to-5 on the Nasdaq and were nearly even on the NYSE.
Small caps displayed relative strength, with the Russell 2000 adding 0.5%. Smaller stocks have tended to react favorably when international trade issues flare up.
Strength in semiconductors helped the Nasdaq and the technology sector. The Philadelphia semiconductor index climbed 1.1% and is gaining some room above its 50-day moving average.
Dow component United Technologies ( UTX) broke out of a cup-with-handle base with a 136.76 buy point. Volume was unimpressive, but megacap stocks sometimes have difficulty making big volume spikes on breakouts.
The transportation sector also outperformed. The Dow transports climbed 1%, while shipping and logistics industry groups were in the top 15 of 197 industry groups Friday.
Kirby ( KEX), which transports commodities over waterways, surged 7% in heavy trading after a Stifel Nicolaus analyst offered bullish comments, MarketWatch reported. Kirby shares remain in a correction but climbed back above the 200-day moving average.
Leading stocks were keeping their heads above water. The Innovator IBD 50 ETF ( FFTY) was flat. The index took a hit from PGT Innovations ( PGTI), which gapped down below the 50-day moving average in heavy trading. The stock sold off Wednesday after it announced a share offering, then added to its woes when it priced the offering at 23 a share, or 1 point below Thursday's closing price of 24.
PGT Innovations makes doors and windows, including models that are resistant to hurricane winds. The stock hit a new high Monday as Hurricane Florence moved toward the Eastern U.S. It was discussed in IBD 50 Stocks To Watch this week, when it tested its 50-day line.
Key U.S. equity market indexes retreated on news that President Trump has instructed aides to begin drafting a plan for an additional $200 billion in tariffs on Chinese imported goods. Yet the decline in stocks today remained light. A new China growth stock held above the proper buy point after breaking out this week.
News on a 0.1% August month-on-month rise in U.S. retail sales hardly made a dent on Wall Street.
Meanwhile, Chinese e-commerce app Pinduoduo ( PDD) continued its big-swinging ways, but continued to show strength. Shares, which bolted out of a new IPO base with a 27.64 correct buy point, dropped nearly 4%. But at 28.93, the large-cap growth stock held above the proper entry.
Shares of Pinduoduo also bounced bullishly off the morning low of 26.28. The 5% buy zone goes up to 29.02.
Indexes pared losses. The Nasdaq composite dropped 0.1% after rising as much as 0.3% in the early going. The S&P 500 and the Dow Jones industrial average sank around 0.1%. Volume is running lower vs. the same time Thursday on both main exchanges.
Some top growth stocks in terms of both fundamentals and technicals look poised to end the week with flair.
Netflix ( NFLX) is on pace to rally 4.7% for the week, nearly recouping all of the prior week's 5.2% slide. The online streaming giant has been forming a cup-style base since peaking 11 weeks ago at 423.20.
Advanced Micro Devices ( AMD) has risen for a sixth straight week, but the near-vertical rate of its recent rise suggests that a pullback would be reasonable to expect.
At 32.19, the chipmaker stands a lofty 124% above its key 200-day moving average, currently at 14.34. IBD research has found that most of the biggest stock market winners tend to go into a correction after rising that far above the key long-term support-and-resistance line.
But the chip designer is too extended to buy, and the stock has another problem. The chip sector is a market laggard. Going into Friday's session the chip sector was No. 30 among 33 sectors.
Stocks moving to new highs included Adobe Systems ( ADBE), up 3% in heavy volume after a view-beating quarter; asset-tracking technology provider Zebra Technologies ( ZBRA), up 1% in fast trade; smart home technology provider Control4 ( CTRL), up 0.5% in moderate volume; and rental housing software company RealPage ( RP), up almost 2.5% in heavy volume.
Who Feels The Pressure?
World trade issues continue to hang over the U.S. stock market, but Trump's determination appears unshakable. On Thursday, Trump tweeted that "The Wall Street Journal has it wrong, we are under no pressure to make a deal with China, they are under pressure to make a deal with us. Our markets are surging, theirs are collapsing."
Trump is right about China's stock market. The Shanghai composite meets the technical definition of a bear market. Some market watchers, though, say that an authoritarian regime like China isn't as susceptible to popular pressure as a democracy is.
Who's right? The U.S. stock market's choppy action this year suggests the question hasn't been answered definitively.
Another factor hanging over the market is Hurricane Florence. The storm hit the North Carolina coast Friday morning. Florence first formed off the west coast of Africa on Aug. 30. Stocks tied to recovery began to rise in reaction.
From the Aug. 30 close, Home Depot ( HD) advanced as much as 8% but has since pulled back to a 5% gain. Generac ( GNRC), a maker of standby power generators, spurted 10.5% and then eased to a less than 4% gain.
The true short-term traders have likely cashed in their profits already.
(For updates on this story and other market coverage, check IBD's stock market news today.)
The stock market turned mixed through morning trade Friday. The stock market's reaction was muted after U.S. retail sales recorded a 0.1% increase in August. SwingTrader idea Apple ( AAPL) dropped after negative analyst commentary, while IBD 50 stockAdobe Systems ( ADBE) is at the top of its buy range — according to MarketSmith chart analysis — after its earnings beat Thursday. (For updates on this story and other market coverage, visit the Stock Market Today.)
The tech-heavy Nasdaq reversed from an early gain to trade up 0.1%. Meanwhile, the Dow Jones industrial average defended a thin gain and the S&P 500 edged lower.
Among the Dow stocks, Goldman Sachs ( GS) was one of the top-performing stocks early Friday. Shares rose 0.5%. The Wall Street investment bank ended an 11-day losing streak Thursday. The stock is about 16% off its 52-week high.
On the downside, Apple declined 0.5% after analyst firm Rosenblatt Securities said iPhone XS China preorders were weaker than previous iPhone launches. Apple stock was about 15% from a flat base's 194.30 entry.
Adobe Beats Earnings, Shares Advance
Among companies reporting earnings, software leader Adobe Systems beat the Street's fiscal-Q3 estimates and guided higher for the current quarter. Shares gained steam through morning trade, advancing more than 3%. The stock is trading within buy range of a 263.93 flat-base entry after finding support at the 50-day line last week. The 5% buy range runs up to 277.13.
PayPal ( PYPL) moved up 0.1% after Raymond James reinstated an outperform rating with a 108 price target on the stock. Shares are trying to regain a 92.45 flat-base entry after a breakout on Aug. 29 faded.
Domino's Pizza ( DPZ) tested its 50-day line Friday amid a string of recent declines. Shares fell 1.5% and are about 5% below a cup with handle's 295.34 buy point. Losses should be cut short at the 7%-8% level.
IBD 50 Stocks
Among the top growth stocks, Grubhub ( GRUB) hit a new high with a near-2% gain. The food delivery service's price target was raised from 150 to 170 at Argus. Shares are well extended from its previous buy point and the 50-day moving average line.
Meanwhile, World Wrestling Entertainment ( WWE) was clinging to a 86.03 flat-base buy point. Shares regained the level Thursday and rose 0.5% Friday.
Stocks opened to thin early Friday, as global markets rose and investors monitored the impact of Hurricane Florence as it plowed into the North Carolina coast.
Advanced Micro Devices ( AMD) led an early rally among chip stocks, while Tilray ( TLRY) spearheaded a sell 0ff in the budding marijuana trade. China IPO Nio ( NIO) neared triple-digit gains above its initial offering price. Shire ( SHPG) jumped after China regulators cleared its acquisiton by Japan's Takeda. Utility NiSource ( NI) dived following Thursday gas explosions in Massachusetts.
The Dow Jones industrial average, S&P 500 and Nasdaq Composite all opened to gains of 0.1%.
Boeing ( BA) led the Dow, up 0.9%. Drugmaker Shire topped the Nasdaq 100, while AMD headed the S&P 500, and NiSource tumbled to that index's deepest decline.
The Dow opens Friday toting a 0.9% gain for the week, while the S&P 500 is up 1.1%. Both vie for their ninth gain in the past 11 weeks. The Nasdaq Composite rose 1.4% through Thursday, as it continues to ride support at its 10-week moving average.
Hurricane Florence Update
In North Carolina, the threat of wind damage slipped down the list of concerns as Hurricane Florence weakened to a Category 1 storm before making landfall Friday. But the storm still packed 90 mph winds, reportedly knocking out power to more than 400,000 residents, and storm surge and rains remained critical threats. The huge storm was expected to dump up to 40 inches of rain on portions of North Carolina on Friday. More than one million residents evacuated while others sheltered in place to ride out the storm.
Among storm-affected stocks, Home Depot ( HD) rose 0.1%, United Rentals ( URI) jumped 0.9% and Allstate ( ALL) slipped 1.2% in premarket trade.
August Import Prices Drop, Consumer Sentiment Surges
Import prices posted their largest decline in 18 months in August, the Labor Department reported, as a strong dollar held back inflation pressures. Import prices fell 0.6% for the month, but climbed 3.7% year-over-year. Analyst forecasts called for a 0.1% monthly slip. Export prices were down 0.1%, below expectations for a 0.2% increase for the month, although still up 3.6% on the year.
Retail sales inched up 0.1% in August, according to the Commerce Department, below forecasts for a 0.4% gain. Minus auto and gasoline, sales were up 0.2%, below projections for a 0.4% advance.
Industrial production rose 0.4% in August, the Federal Reserve said, in line with estimates. Utilization of manufacturing capacity held steady at 78.1%, below views for an uptick to 78.3%.
Consumer sentiment jumped to a six-month high in September, according to preliminary estimates from the University of Michigan. The university's Consumer Sentiment Index rose to 100.8, up from 96.2 in August and well above forecasts for a reading of 98. 56% of households surveyed reported financial gains, just below the 57% record set in March.
Crude oil prices rose 0.3% as West Texas Intermediate continued to trade just below the $69 per barrel mark. That is almost precisely at the midway point between the highs set in 2013 and the price-crash low of February 2016. The weekly U.S. rig count is slated for release from Baker Hughes ( BHGE) at 1 p.m. ET.
China IPO Nio spiked 10%, opening almost 100% above Wednesday's IPO price. The maker of luxury electric vehicles, touted as China's Tesla ( TSLA), soared 72% on Thursday. The stock has not yet formed an IPO base or offered a valid buy point. Tesla shares slipped 0.2% in early action.
Ireland-based drugmaker Shire climbed more than 2% after Chinese regulators cleared the company's takeover by Japan-based pharmaceutical heavyweight Takeda. The $62 billion deal, reportedly the largest undertaken by a Japanese company, is expected to close in the first half of 2019.
Diversified utility NiSource skidded almost 10% lower following a series of reportedly gas-related explosions in dozens of homes in Merrimack Valley, Mass. Customers of the company's Columbia Gas of Massachusetts were evacuated as crews worked to shut off individual gas valves for each of 8,600 customers in the area. NiSource shares had climbed 22% since June and were taking out new highs.
Stocks rallied in Hong Kong and Tokyo Friday, while China's mainland markets slipped after a round of weak economic data for August. Hong Kong's Hang Seng Index jumped 1% as casino and technology issues continued to rebound, hauling the index out of bear market terrain and to a 1.2% advance for the week. Mainland markets were less fortunate, with the Shanghai Composite slipping 0.2% Friday to chalk up a 0.7% loss in its third straight weekly decline. Shanghai has been in bear market territory since late June.
In Japan, Tokyo's Nikkei 225 popped 1.2% as stocks rallied for the fourth day this week. That left the benchmark up 3.5% for the week, its best week since mid-July, but still 4% below January's high.
European markets were also tracking toward their best week since July as trade talk optimism again lifted automakers and mining stocks. Frankfurt's DAX and the CAC-40 in Paris each gained 0.5%, London's FTSE 100 was ahead 0.3% in afternoon trade.
Dow Jones futures rose modestly Friday morning, along with S&P 500 futures and Nasdaq 100 futures, as Hurricane Florence made landfall on the North Carolina coast. On Thursday, the Dow Jones climbed 0.6%, the S&P 500 index 0.5% and the Nasdaq composite 0.75%. Chip stocks rebounded after leading the Nasdaq lower Wednesday. Chinese companies also were hot, led by massive gains by new IPOs Nio ( NIO) and Pinduoduo ( PDD). Tilray ( TLRY) skyrocketed Thursday, even as other marijuana stocks slipped, but tumbled overnight. Facebook ( FB) continues to look worse. And as for Apple ( AAPL): Apple stock is doing just fine; it's on track to shake off the iPhone unveiling curse for the week.
Dow Jones Futures Today
Dow Jones futures climbed 0.2% vs. fair value. S&P 500 futures were up 0.2%. Nasdaq 100 futures gained 0.35% as techs led again. Top stock Adobe Systems ( ADBE), a big-cap S&P 500 and Nasdaq composite member, was little changed despite topping earnings views. But Nio, Pinduoduo and Tilray stock were notable movers.
Keep in mind that Dow Jones futures, Adobe's stock action and other overnight moves may not translate into actual trading in the next regular session.
The Philadelphia Semiconductor Index rose 1.2% Thursday, continuing a rebound from Wednesday after undercutting its 200-day moving average. The Philly Sox index did close off highs and just below its 50-day moving average.
Chip stocks typically lead or at least take part in stock market rallies. AMD ( AMD), despite a nasty reversal from record highs Thursday, has been red hot, while Nvidia ( NVDA) reclaimed a buy point in the session. But overall, chip stocks have struggled. The Philly Sox's relative strength line is just above a 2018 low as it lags the S&P 500 index and especially the Nasdaq composite.
If chip stocks could lead or even just keep pace with the broader indexes, it would be a boon to the market rally.
The iShares PHLX Semiconductor ( SOXX) ETF, which mimics the Philly Sox index, was up 0.6% early Friday. Nvidia and AMD shares were both up nearly 2%.
China Stocks Have Big Day; Two IPOs Fly
With China trade-war fears waning for the moment, U.S.-listed Chinese stocks had a big day after months of struggle. Alibaba ( BABA) rose 2.5%, Tencent ( TCEHY) 5.3% and Momo ( MOMO) 6.7%.
Momo stock is working on what looks like a cup-with-handle base with a 47.85 buy point. But there's a big flaw. The midpoint of the handle is 1.5 cents below the midpoint of the base. Why does that matter? If the handle is low in the base, there is still a lot of overhead resistance, with weak holders still waiting to exit as the stock closes on all-time highs.
Meanwhile, Nio stock exploded for a 76% gain on the Chinese luxury electric-auto maker's second day of trading. On Wednesday, shares rose 5.4% after the IPO priced near the low end of an expected range. Another recent IPO, Pinduoduo, vaulted 30% to 29.96, clearing a 27.64 cup-base entry in its first-ever breakout. Pinduoduo describes itself as an e-commerce mashup of Costco and Disney.
Early Friday, Nio jumped 20%. Pinduoduo retreated 2.7%, but was still in buy range.
Tilray Stock: Finally Due For A Down Day?
Tilray stock surged 14% to 119.76 after hitting a record 127.27 intraday. That's up from a July IPO price of 17. Meanwhile, fellow Canadian marijuana stocks listed on U.S. exchanges, Cronos Group ( CRON) and Canopy Growth ( CGC), slid 10% and nearly 14%, respectively.
Tilray stock, Cronos stock and Canopy stock all retreated overnight, with Tilray sinking 10%. The after-hours catalyst seemed to be a top U.S. Customs official telling Politico that Canadian marijuana industry workers and investors could face a lifetime ban on travel to the U.S.
Facebook Stock Is A Social Outcast
Facebook stock fell 0.4% to 161.36, its worst close since late April, defying the broader rally in tech stocks. The RS line skidded to its worst level since January 2017. As an analyst recently stated, the combination of slowing growth and heightened regulatory risk is a "toxic brew" for the stock. Twitter ( TWTR), Snapchat operator Snap ( SNAP) and, to a lesser extent, Google parent Alphabet ( GOOGL) also are struggling.
If you look back to Facebook's late April to late July rally, note that the stock hardly ever rallied in above-average volume. That suggested a lack of institutional buying and conviction after the Cambridge Analytica scandal.
Apple Stock Is Just Fine
Apple stock is not quite back to its Sept. 5 peak of 229.67. But shares rose 2.4% to 226.41 on Thursday. After a long period of moving with the market, Apple stock has powered higher since its July 31 earnings report. While shares dipped on Wednesday's iPhone unveiling, they seem on track for a solid weekly gain, despite concerns of Apple iPhone sticker shock.
Tech stocks outperformed Thursday, helped by a tame reading on consumer inflation before the open and a strong showing for Chinese indexes overnight. The Nasdaq composite ended with a gain of 0.7%, helped by a rebound in semiconductor stocks.
Several Nasdaq-listed chip stocks outperformed, including ASML ( ASML), Qualcomm ( QCOM), Micron ( MU) and Skyworks Solutions ( SWKS). The Philadelphia semiconductor index rebounded 1.2% after falling 1.2% Wednesday.
The Dow Jones industrial average picked up 0.6% and the S&P 500 added 0.5%. Small caps lagged badly, with the Russell 2000 down 0.2%. Preliminary data showed volume on the NYSE and Nasdaq coming in slightly lower than Wednesday's levels.
China's Hang Seng Index surged 2.5% overnight, fueling big gains for several China-based stocks Wednesday. Shares of Momo ( MOMO) jumped nearly 7% to 46.87. It's working on an erratic cup-with-handle base with a 47.85 buy point. Other nice gainers in the China space included NetEase ( NTES), JD.com ( JD) and Ctrip.com ( CTRP).
After the close, Sector LeaderAdobe Systems ( ADBE) reported better-than-expected earnings and sales. Shares added 0.7% to 270.30 in after-hours trading. It's still in buy range from a 263.93 entry after a breakout from a later-stage base.
Tech Stocks Lead Dow
In stock market results today, Dow component Apple ( AAPL) rallied more than 2% after selling the news yesterday. The company on Wednesday released a new line of iPhones and improvements to the Apple Watch. Other tech stocks in the Dow outperformed. Intel ( INTC) and IBM ( IBM) ended with gains of more than 1%.
Match Group is also a member of the IBD 50. Shares soared 6% to 59.58. The stock hasn't looked back after reporting earnings and gapping out of a consolidation in August. Strength in Match helped lift Innovator IBD 50 ( FFTY) to a gain of around 0.7%.
At the New York Mercantile Exchange, benchmark crude oil for October delivery slumped 2.5% to $68.59 a barrel, backing off four-month highs.
The 10-year Treasury yield was unchanged at 2.96%. Wholesale inflation data released Wednesday and consumer inflation data released Thursday were softer than expected.
Stocks held gains in the late part of the session Thursday, but small caps lagged noticeably.
Indexes gapped up at the open and traded near session highs with about an hour left in the session. Volume was lower compared with the same time on Wednesday.
The Nasdaq led with a 0.7% increase. The composite is getting traction as it finds support near the 50-day moving average. It is also back above the 8,000 level, where the index spent several days before its latest pullback.
Invesco QQQ Trust ( QQQ), an ETF that tracks the Nasdaq 100, touched its 50-day moving average two days ago, and its rebound from that line looks stronger today. (For updates on this story and other market coverage, check the Stock Market Today page.)
The S&P 500 climbed 0.5% and it is less than 1% from a new high. The Dow Jones industrial average climbed 0.5% also and is on track to make a new closing high.
But the small-cap Russell 2000 was down a fraction. Energy stocks weighed the most on small caps, as the price of crude dropped sharply. Oil futures slid 2.4% to $68.66 a barrel. Concerns about the global economy took down crude prices, which had been rallying ahead of Hurricane Florence. The storm is approaching the Carolinas, although its intensity has diminished.
Semiconductors, which were mauled Wednesday, came back to be among the market leaders. The iShares PHLX Semiconductor ETF ( SOXX), which tracks the Philadelphia semiconductor index, jumped 1.4% and is back to its 50-day moving average.
But Monolithic Power Systems ( MPWR) was not participating in the chip bounce. The maker of technologies used in industrial manufacturing, telecommunications , cloud computing and other industries sank as much as 8.6% before paring its loss to 4%.
Volume was heavy in Monolithic shares, and the stock pierced below the 50-day moving average. The stock dinged the performance of the IBD 50, which was up 0.5%. Internet companies Match Group ( MTCH) and Momo ( MOMO) led the upside on the IBD 50, rising more than 5% each.
Despite the market's gains, a few breakout attempts fizzled.
ForeScout Technologies ( FSCT) reversed lower after clearing the 38.55 buy point of an undefined base.
Cardlytics ( CDLX), which helps marketers analyze online shoppers, stalled at its 25.81 buy point, though volume was high.
Callaway Golf ( ELY) made a feeble move above a 23.70 entry; it appears that its breakout will have to wait.
Meanwhile, semiconductor and Chinese e-commerce companies recovered some of their sharp losses. Mobile-based online shopping app operator Pinduoduo ( PDD) cleared its first base at 27.64 before settling back. Momo ( MOMO), 58.com ( WUBA), Weibo ( WB) and Autohome ( ATHM) also rose sharply, but only Momo and 58.com are currently trading on the north side of the 50-day moving average.
Momo has been fashioning a new cup with handle that offers a 47.85 entry. But the handle is relatively deep within the base. Conducting the midpoint test, the handle's midpoint price of 44.51 is just a hair below the base's midpoint of 44.52.
Also, the Chinese social network focused on live videos and music is still trading nearly 15% below the base's left-side peak of 54.24. Translation: The stock still could spend more time shaping the base's right side.
At 2:30 p.m. ET, the Nasdaq composite gained 0.8% in flat volume vs. the same time Wednesday. At one point the leading index rallied more than 1%. The S&P 500 trailed with a nearly 0.5% advance. Sharp declines in wood products, coal, tobacco, homebuilder, truck transport and select retailing shares blunted the large-cap index's rally.
On the Nasdaq, gainers edged losers by a thin margin of less than 100 issues. On the NYSE, winners led losers by a roughly 3-2 margin.
The Dow Jones industrial average also gained around 0.5%. A tweet from President Trump denying that the U.S. is asking China to return to the negotiating table to work out a trade deal briefly sent the indexes backtracking, yet both the S&P 500 and the Dow look poised for a fourth straight advance.
The S&P SmallCap 600 and the Russell 2000 edged a touch lower.
NYSE volume was running a touch higher vs. the same time Wednesday.
Apple Stock Gains Expand
Apple ( AAPL) rallied more than 2.6% to 227.01 in hefty turnover as at least nine components within the 30-stock Dow industrials lifted 1 point or more.
The iPhone, Apple Watch and digital services firm unveiled new iPhones and a fourth-generation wearable device on Wednesday. The company is on track to continue growing earnings and sales at a double-digit pace. The Street sees earnings rising 28% in fiscal 2018 (ending in September) to $11.76 a share and up 15% in fiscal 2019 on full-year revenue gains of 15% (to $263.5 billion) and 5% (to $277.18 billion).
In the current fiscal fourth quarter, analysts expect Apple's profit to rise 33% to $2.76 a share on a 16% increase in the top line to $61.19 billion. That would mark the fifth quarter in a row of mild double-digit revenue gains.
Apple has now rallied 26% following a May 4 breakout past 179.04 in a good double bottom base. The seven-week base started to form after Apple hit a peak of 183.50 on March 13.
Shares are currently extended past any correct buy zone. Apple also is extended from its breakout past a 194.30 buy point. The market cap is close to $1.096 trillion. Apple holds a top-notch 99 Composite Rating on a scale of 1 to 99, according to IBD Stock Checkup. That places Apple 1st in terms of that rating within the relatively small Telecom-Consumer Products industry group.
Chip Stocks Rebound
Advanced Micro Devices ( AMD) ripped as much as 6% higher and marked a new all-time high of 34.14 before giving back most of those gains.
At 32.53, the stock and outright leader within IBD's fabless semiconductor industry group is extended sharply above its 50-day moving average, and so a pullback soon is not out of the question.
Still, the fundamentals for the giant in computer processors and server chips have been superb lately. AMD posted huge increases in earnings the past two quarters as sales pumped 40% and 53% higher vs. year-ago levels.
Stitch Fix ( SFIX) continued to soar. The AI-enhanced apparel shopping site rushed 8% higher to 48.37, increasing its gain following a rocky breakout past a 30.17 buy point in a six-month cup base to more than 60%.
Analysts surveyed by Thomson Reuters see Stitch Fix's earnings falling 34% to 21 cents a share in the fiscal year that ended in July. But in the April-ended third quarter, the San Francisco-based company pulverized the Street's view with a 200% jump in earnings to 9 cents a share. The consensus view was 3 cents a share.
Q3 revenue jumped 29% to $316.7 million.
This Aerospace Small Cap Stock Offers New Buy Point
Among small caps, Albany International ( AIN) rallied more than 1% to 80.45 in volume running nearly triple usual levels. The maker of textile machines and components for aerospace firms cleared a 79.55 follow-on buy point in a four-weeks-tight pattern. This is a variation of the three-weeks-tight chart pattern.
Albany, which has a market value of $2.6 billion, has posted four quarters in a row of robust earnings gains (up 39%, 19%, 33% and 413%) as revenue grew 16%, 6%, 15% and 19%.
According to Stock Checkup, Albany receives an 89 Earnings Per Share Rating, tops within the paper products industry group. The Composite Rating is excellent at 98.
In other markets, WTI crude oil futures sank 2.7% to $68.49 a barrel, clearly showing continued upside resistance near the $70 level. Crude cooled off despite the U.S. dollar's decline against the euro. Core U.S. consumer prices edged up 0.1% month on month in August, below the Econoday forecast for a 0.2% increase. Consumer prices rose 2.7% vs. a year ago, missing the Econoday view of up 2.8%.
The yield on the benchmark U.S. Treasury 10-year bond held at 2.97%.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on growth stocks, chart analysis, breakouts, sell signals, and financial markets.
Stocks gripped sizable gains late Thursday morning, as Canadian trade talks turned silent but China and the U.S. were poised for a new round of negotiations. Meanwhile, Hurricane Florence started to hit the North Carolina coast.
The Nasdaq swaggered 0.9% higher, while the Dow Jones industrial average and the large cap S&P 500 added 0.5% each. Small caps trailed as the Russell 2000 lost 0.1%.
Volume was running lower on both major exchanges vs. the same time in the previous session.
The Nasdaq retook and was fighting to hold above the 8000 level.
Chip stocks contributed unevenly to the Nasdaq's rebound as chipmakers, chip equipment makers and chip designers rose 1.7%, 1% and 0.3%, respectively. Semiconductors haven't held a sector leadership role in the stock market since mid-November. Going into Thursday's session, chips were No. 27 among 33 sectors. On Wednesday, chips accounted for seven new lows, the most among all sectors.
In the IBD 50, a proxy for top stocks, telecom stock Ubiquiti Networks ( UBNT) popped about 2% and hit a new high as the midcap headed toward its third daily gain in a row. BMO Capital Markets lifted its price target for Ubiquiti to 80. The stock is trading around 97.
On the downside, chip designer Monolithic Power Systems ( MPWR) stumbled 5% — on track for its fifth loss in a row. Monolithic's relative strength line has been sliding lower, a bearish sign.
The relative strength line measures a stock's performance vs. the S&P 500. A rising line points to outperformance, a falling line to underperformance.
New highs Thursday included medical device provider Boston Scientific ( BSX), up 2.5% in heavy volume. Breakouts included specialty glass maker Corning ( GLW), up 2.5% in volume 99% above average.
Corning had been consolidating since January. The stock formed a cup-with-handle base that was 26% deep and offered a 34.25 buy point.
Blue Chip Stocks Up
Blue chips were up by a 9-5 ratio in the Dow. Apple ( AAPL) led the pack with a 3% gain. Dow stocks rising about 1% included Travelers Companies ( TRV), Microsoft ( MSFT), IBM ( IBM) and American Express ( AXP).
Hurricane Florence was downgraded to a Category 2 hurricane as it hit North Carolina. Category 2 is associated with winds from 96 to 110 mph. Not too long ago, Florence was rated Category 4, which has winds from 131 to 155 mph. However the size of the Florence expanded, increasing the chances of flooding.
The stock market's early advance faded through morning trade Thursday as it followed through on Wednesday's positive reversal. The market appeared to fall from its highs after President Trump said "we are under no pressure to make a deal with China..." SwingTrader stock Apple ( AAPL) was on the mend in early trade after Wednesday's product launch event sent shares lower. IBD 50 stockAdobe Systems ( ADBE) is in buy range — according to MarketSmith chart analysis — and will report its Q3 earnings results after the stock market close. (For updates on this story and other market coverage, visit the Stock Market Today.)
The tech-heavy Nasdaq moved up 0.6% to lead the stock market's early action after rising as much as 1%. Meanwhile, the Dow Jones industrial average and S&P 500 climbed 0.3% apiece.
Among the Dow stocks, Apple rebounded about 2%, recovering the entirety of Wednesday's 1.2% loss. On Wednesday, Apple unveiled its latest-generation smartphone, the iPhone XS, and its fourth-generation smartwatch, the Apple Watch Series 4. Early Thursday, Needham raised its price target from 220 to 260 — a 17% premium to Wednesday's closing price at 221.07. Apple stock is about 16% from a flat base's 194.30 buy point.
On the downside, Home Depot ( AAPL) fell for a second straight day, dropping about 1%. Shares are in the 5% buy range from a cup with handle's 204.35 buy point.
Kroger's Sales Light, Stock Falls
Among companies reporting earnings, Kroger ( KR) declined about 10% after its mixed Q2 results early Thursday. Despite beating earnings estimates, the grocery-store operator missed its same-store sales estimates. Shares ended Wednesday slightly extended beyond a cup with handle's 30.10 buy point. The stock is well below that level and is breaking down through its 50-day line.
After the stock market close, software leader Adobe Systems will announce its fiscal-Q3 earnings results. The Street expects the company to earn $1.69 per share on revenue of $2.247 billion. Adobe stock is trading in the 5% buy range of a flat base's 263.93 entry amid a recent breakout attempt.
IBD 50 Stocks
Among the top growth stocks, Chinese stock leader Momo ( MOMO) moved up 3.6%. Shares regained their 50-day line Wednesday, as they add a handle to deep cup-shaped base formation. The potential buy point is 47.85. Look for the relative strength line to improve to confirm the stock's strength.
On the downside, chip stock Monolithic Power Systems ( MPWR) plunged for a second straight day. The stock dropped over 7% to break down below its 50-day line. The stock closed right at that level Wednesday amid the sell-off in chip stocks.
Stocks were off to a solid open on Thursday, as chip stocks and Asia's markets rallied following Wednesday's news of revived U.S.-China trade talks.
Chip stocks and China-based names led the early action, with Qualcomm ( QCOM), Intel ( INTC) and ASML Holdings ( ASML) staking out early gains. Apple ( AAPL) jumped, boosted by trade news and as its new iPhone release spurred two analysts to increase their price targets. Chip stock Impinj ( PI) blasted to the top of the market on its second-quarter report. Kroger ( KR) and Pivotal Software ( PVTL) fell hard following their quarterly results.
The Nasdaq Composite led, surging 0.7% out of the starting gate. Qualcomm, NetEaseNTES and JD.ComJD led the Nasdaq 100.
The Dow Jones industrial average jumped 0.5%, with Apple and BoeingBA each up more than 1%. The S&P 500 opened to a 0.4% gain, led by Davita Healthcare ( DVA) and Advanced Micro Devices ( AMD).
The market is so far tracking toward a positive week. The Dow rose 0.3% through Wednesday, the S&P 500 is up 0.6% and the Nasdaq Composite has a 0.7% gain. September remains a mixed month, with the Dow up a meager 0.1%, while the S&P has declined 0.4% and the Nasdaq is nursing a 1.9% loss. Both the Nasdaq and S&P 500 are tracking toward their first monthly declines since March.
Chip Stocks Qualcomm, AMD Jump; Apple Price Target Increased
Chip stocks rose largely on reaction to the trade situation, with Qualcomm up 3.1%, Netherlands-based ASML Holding surging 4.3% and Advanced Micro Devices spiking more than 5% at the start of trade.
Qualcomm also announced a $16 billion accelerated share-buyback initiative. The accelerated buyback agreement, entered into with Bank of America, Citibank and Morgan Stanley, was part of a $30 billion initiative announced in July. On Monday, Qualcomm shares moved to their highest level since October 2016.
Chip stock Impinj soared 42% on second-quarter results that included an all-clear after an internal audit found no adjustments to prior financial filings were necessary. The Seattle-based chipmaker has posted three straight quarters of revenue declines, four quarterly losses.
Apple advanced 1.6%, as Needham lifted the stock's target price to 260, from 220, citing a change in the company's pricing/release strategy following Wednesday's new iPhone introductions. Morgan Stanley maintained its overweight rating on the stock, hoisting the price target to 247, from 245. The IBD Swing Trader stock is in a buy zone through $226.30.
Grocery chain Kroger dived 9.4% after reporting above-forecast second-quarter earnings, but revenue growth that stopped short of some estimates. Kroger shares had climbed just beyond buy range above a 30.10 buy point in a flat base.
Pivotal Software crumbled 21.2% lower, despite better-than-expected revenue growth and a narrower loss than projected in its second quarter. However, Pivotal added just 15 subscription customers vs. 20 in the first quarter. Subscription revenue rose 51% vs. a year earlier, but decelerating from the first quarter's 69% pace.
Among China-based stocks, Tencent Holdings ( TCEHY) surged 6.2%, while Tencent Holding vaulted 6.2% and JD.com marked a 3.4% gain. Alibaba Group Holdings ( BABA) and Baidu ( BIDU) gained 2% apiece. Electric auto maker NioNIO, which raised $1 billion in its Wednesday IPO, gaped up 6.7% in early trade.
China Surges On Trade Talks: Europe Mixed As Turkey Hikes Rates
The U.S. and China currently have tariffs stacked against imports to each country valued at $50 billion per year. The Trump Administration has threatened tariffs on another $200 billion in Chinese exports if China does not meet demands to restructure its trade practices with the U.S. The new round of talks will be led by Treasury Secretary Steven Mnuchin.
In China, Hong Kong's Hang Seng Index vaulted 2.5% higher, snapping a six-day decline. The Shanghai Composite jumped 1.2%. Both indexes remains in bear market territory. In Japan, Tokyo's Nikkei 225 leapt 1%.
Central Bank Actions In Europe
Europe's markets were tuned to central bank actions in England, Europe and in Turkey. The central bank of Turkey hiked its benchmark interest rate a full 24% — its first significant move to deal with the country's run-away inflation rates. The move followed a ban issued by Turkish President Recep Tayyip Erdogan, preventing domestic sales and rental transactions in foreign currencies. Both moves intend to prop up the collapsing lira.
The Bank of England held rates steady at 0.75%. But it warned that uncertainties regarding the country's Brexit strategy had increase since its last meeting. The European Central Bank also left rates unchanged. It also underscored its plans to wind down its bond-buying stimulus efforts before the end of the year.
Further, the ECB slashed its economic growth projections. At the press conference following the decision, ECB President Mario Draghi said that "uncertainties relating to rising protectionism, vulnerabilities in emerging markets, and financial market volatility have gained more prominence."
European markets were mixed following the announcements. Frankfurt's DAX showed a 0.5% gain and the CAC-40 was up 0.3% in afternoon trade. London's FTSE 100 slipped 0.3%.
Dow Jones futures rose modestly Thursday morning, along with S&P 500 futures and Nasdaq futures. Recent tech IPO Pivotal Software ( PVTL) crashed overnight despite reporting better-than-expected second-quarter results late Wednesday. Meanwhile, AMD ( AMD), Tilray ( TLRY) continued to rally while brand-new IPO Nio ( NIO) pullback back after Wednesday's debut. Meanwhile, Tesla ( TSLA) stock fell as another top finance official left and CEO Elon Musk tweeted that customers may see later deliveries due to higher shipment volumes.
Dow Jones Futures Today
Dow Jones futures rose 0.3% vs. fair value. S&P 500 futures advanced 0.2%. Nasdaq 100 futures were up 0.35%. Turkey's central bank hiked its one-week repo rate from 17.75% to 24%, sending the Turkish lira higher vs. the dollar. Hurricane Florence weakened to a Category 2 storm, but is still expected to cause heavy damage when it hits the Carolinas late Thursday or earnings Friday.
Keep in mind that Dow Jones futures and other overnight action may not translate into actual results in the next regular session.
In Wednesday's stock market trading, the Dow Jones and S&P 500 index rose slightly while the Nasdaq composite dipped 0.2%. All closed well off lows on a report that the U.S. has called for new trade talks with China before any new Trump tariffs kick in. Chip stocks were notable losers Wednesday, with the big exception of AMD stock.
Pivotal Software reported an adjusted loss of 6 cents a share, with revenue rising 30% to $163 million, beating views. The company gave Q3 guidance that was slightly above analyst targets. However, Pivotal added just 15 subscription customers vs. 20 in Q1. Subscription revenue rose 51% vs. a year earlier, decelerating from Q1's 69% pace.
Pivotal stock crashed 26% in the premarket. Shares had closed up 2.9% to 28.78. Pivotal stock had been closing in on a 29.25 cup-with-handle base.
That underscores a key point: It's highly risk to buy a stock just before quarterly results unless via an earnings options strategy. That's especially true of recent IPO stocks, which can be especially volatile after earnings.
Pivotal came public at 15 a share in late April.
Shrugging off broader semiconductor concerns, AMD stock surged Wednesday, rising 7% to 32.21, a fresh 12-year high. Early Thursday, AMD stock kept climbing, up 1.7%.
AMD is grabbing market share in PCs and servers from Intel ( INTC), which has delayed its next-generation chips.
The hottest marijuana stock is still smoking, puffing 8.5% higher in extended trading. That's after Tilray stock rallied 9.6% to 104.95 on Wednesday. That's despite short-seller Citron saying marijuana stocks are "more ridiculous than Bitcoin," with Tilray stock the worst of all. Tilray's market cap was $9.8 billion at Wednesday's close. Not bad for a money-losing firm with $9.7 million in Q2 sales.
Tilray debuted at 17 a share in July.
Nio IPO Stock
Nio, a Chinese rival to Tesla, priced its IPO near the low end of its range late Tuesdasy. Nio IPO stock opened lower Wednesday, but closed up 5.4% to 6.60. Shares rose overnight but turned down 2.4% closer to the open. Nio launched a seven-seat luxury electric SUV in the past year, with a five-seat model on the way.
Justin McAnear, Tesla's vice president of worldwide finance, is stepping down to become CFO of another company. He's the latest top executive to leave in recent weeks and months, including Tesla's chief accountant, who exited last week after less than a month on the job.
Tesla CEO Elon Musk tweeted that customers face "longer response times" due to a big bump in the number of vehicles needed to be shipped.
Due to a large increase in vehicle delivery volume in North America, Tesla customers may experience longer response times. Resolving this is our top priority.
That suggests that Tesla production is so strong that the company can't keep up. It also could be a justification if Tesla reports weak Q3 delivery figures. In any case, it could mean that quarterly delivery figures will be less clear-cut.
Stepping back, given that Tesla Model 3 production is ramping up nearly a year behind schedule, shouldn't Elon Musk be ready for the increased delivery pace?
Tesla stock sank nearly 1% early Thursday. Tesla stock rose 4% Wednesday, trying to rebound after a monthlong crash from Aug. 7 to Sept. 7.
The major indexes closed mixed Wednesday as Apple ( AAPL) joined semiconductor stocks and other techs experiencing weakness.
The tech-tilted Nasdaq composite fell 0.2% but closed well off session lows. Of the major indexes, the Nasdaq felt a sell-off in semiconductor stocks the most. The S&P 500 edged up a fraction as it also eliminated most losses.
The Dow Jones industrial average closed 0.1% higher after erasing a 0.7% gain. The Dow was left in a sideways trend underway for well over a week.
Volume rose from Tuesday's levels, according to early numbers. Decliners led advancers by a 15-to-13 ratio on the Nasdaq, but winners led on the NYSE by 6-5.
Apple shares fell 1.2% after the company introduced upgrades to the iPhone and Apple Watch at a company event. The cheapest new iPhone, the XR model, starts at $749. Updates on the iPhone X — the XS and XS Max models — were priced starting at $999 and $1,099. The smartphones feature faster chips and improved graphics, while the Watch adds advanced heart-monitoring capabilities.
Apple's stock was already pulling back from record highs after a phenomenal run from its breakout past a 194.30 buy point.
Semiconductor Stocks Roiled
Apple certainly wasn't the only tech stock to suffer. Chip companies fell broadly after Goldman Sachs downgraded Micron Technology ( MU) to neutral from buy and cut the price target to 50 from 68. A Goldman analyst warned of weak fundamentals in memory chips. Micron shares slid 4.3%.
The Philadelphia semiconductor index gapped below its 200-day moving average, down 1.2%. IBD's chip equipment, chipmaking and chip design industry groups were in the bottom five of 197 industry groups Wednesday, down more than 1.3%.
Mining stocks were some of the strongest after the price of gold jumped nearly 1%. Energy was another sector higher on the day.
Tobacco was a strong group, up 1.8%, after the Food & Drug Administration asked makers of e-cigarettes to come up with plans to reduce use by youths. Altria Group ( MO), Vector Group ( VGR), British American Tobacco ( BTI) and Phillip Morris ( PM) rose sharply. The traditional tobacco companies are not competing effectively against e-cigarette makers and stand to gain from new restrictions.
The Innovator IBD 50 ETF ( FFTY) closed 0.5% lower after being down as much as 2.5%. Only three components in the IBD 50 are in the chip sector. The IBD 50's large contingent of software leaders helped brake the losses.
Tech stocks remained under pressure in afternoon trading Wednesday, although the Nasdaq composite moved off session lows. Semiconductor stocks were hit hard after Goldman Sachs downgraded shares of Micron Technology ( MU) ahead of next week's earnings report. Other chip stocks in the Nasdaq 100 took heat, including Analog Devices ( ADI), KLA-Tencor ( KLAC) and Lam Research ( LRCX). The Philadelphia semiconductor index gapped below its 200-day moving average, falling 1.6%.
The Nasdaq composite was down 0.5% in late trading, while the Dow Jones industrial average and S&P 500 edged lower by around 0.1%. Volume on the NYSE and Nasdaq was tracking higher than Tuesday's levels, more so on the NYSE.
Innovator IBD 50 ( FFTY), an exchange-traded fund that generally mirrors the performance of the IBD 50, was down 1.2%.
Inside the Dow Jones, Apple ( AAPL) turned higher after falling 1.8% intraday, but sellers were back in the stock in late trading. The company unveiled new iPhones and a redesigned Apple Watch. Other tech stocks in the Dow Jones lagged with shares of Intel ( INTC) down 0.8% and Cisco Systems ( CSCO) down 0.6%.
In IPO news, China-based electric car maker Nio ( NIO) priced last night at 6.26, near the bottom of a proposed range of 6.25 to 8.25. Shares opened at 6 and were recently trading around 6.70.
In stock market results today, heavy-volume gainers included Ubiquiti Networks ( UBNT). The stock showed hesitant action when it tried to clear a 90.09 buy point, but the breakout gained traction Wednesday as shares jumped nearly 4% to 95.93. Ubiquiti was featured in Tuesday's IBD 50 Stocks To Watch feature.
Tech Stocks Hold Up In IBD 50
Inside the IBD 50, a couple of tech stocks outperformed. Momo ( MOMO) outperformed, rising 3%. The China-based name reclaimed its 50-day moving average, but it's still below a 47.85 entry. Momo operates a popular mobile-based social networking platform in China.
IBD 50 name Netflix ( NFLX) also climbed above its 50-day moving average, but it needs to get closer to highs before a new entry emerges. The stock is still about 13% off its high.
At the New York Mercantile Exchange, benchmark crude oil futures added 1.6% to settle at $70.37 a barrel on news that U.S. crude supplies dropped sharply in the latest week. Hurricane Florence also fueled supply concerns as it closes in on the Carolinas.
The major indexes stuck to a script of relatively mild swings, with the S&P 500 edging back into positive ground while the Nasdaq composite still lagged. Yet Apple, despite losing ground on Wednesday, and at least four other leaders among stocks today also showed overall strength.
At around 2:30 p.m. ET, the Dow Jones industrial average lost its gain of 0.4% to trade slightly lower. The Dow still saw strength in its energy and industrial components. Caterpillar ( CAT) gained 2.17 to 144.20 and hit a six-week high. Shares are still deep in a base-building effort.
Crude oil futures rallied 2.2% and returned back above the $70-per-barrel level. Long-dated U.S. government bonds rallied. The yield on the benchmark U.S. Treasury 10-year note fell 2 basis points to 2.96%.
Meanwhile, Apple ( AAPL) gave back some of Tuesday's hearty rebound. Shares fell 1.2% to 220.87 in rapid trading on the day that the iPhone giant delivered a set of new phones and a next-generation Apple Watch with more health-tracking features.
Micron delivered a key sell signal on June 25 when it forced breakout buyers to cut losses at 7% to 8%. That day, the stock also caved below the 50-day moving average following a breakout attempt on May 29.
The stock gapped down for a second day in a row Wednesday, sinking nearly 5% to 41.64 in fast turnover.
Meanwhile, Netflix ( NFLX), Salesforce.com ( CRM), Adobe Systems ( ADBE) and Tinder app owner Match Group ( MTCH) resisted the Nasdaq decline and continued to act like true market leaders.
The stock market showed mixed moves near midday Wednesday, with the indexes unable to get on the same page.
Blue chips were divided almost evenly while tech struggled. Meanwhile, Chevron ( CVX) surged 2% as West Texas intermediate crude oil climbed above $70 a barrel. North Sea Brent crude was just under $80 a barrel.
Reuters reported that Canada was ready to ease barriers to its dairy market. The report was based on anonymous sources, though, and the market showed no reaction. Meanwhile, the Wall Street Journal reported that the U.S. is seeking a new round of trade talks with China.
The Dow Jones industrial average advanced 0.2%, while the Nasdaq retreated 0.7%. The large cap S&P 500 edged lower. Small caps sagged with the Russell 2000 off 0.4%.
Volume in the stock market was up on both major exchanges vs. the same time in the previous session, more so on the NYSE.
Oil stocks were rising on concerns about sanctions on Iran, which could trim global supplies. Hurricane Florence off the East Coast added to worries, though fears would be greater if the storm were in the Gulf of Mexico.
The Category 4 storm is expected to hit land Thursday. A Category 4 storm has winds from 131 to 155 mph. Damage can be extreme but not as catastrophic as a Category 5 storm.
The chip-designer stock group slid Wednesday for the sixth time in the past seven sessions. The chipmaker group headed toward its seventh loss in a row. Sentiment was negative in the sector after Goldman Sachs made bearish comments about Micron Technology ( MU) ahead of next week's earnings report.
Megacap chipmaker Intel ( INTC) fell in eight of its past nine sessions, assuming Wednesday's retreat will hold. The Street expects Intel to grow earnings 21% this year but only 3% in 2019. The 3% growth would be the narrowest in six years.
Colombian integrated oil company Ecopetrol ( EC) gapped up almost 7% in heavy volume. The large-cap stock cleared a 23.44 buy point.
Midcap wood products maker Louisiana-Pacific ( LPX) knifed above a 31.29 buy point in a rolling consolidation that dates to April. Volume was 215% above the normal pace.
Medical-device maker Penumbra ( PEN) rose about 3% in heavy volume. The midcap stock cleared a 151.05 buy point in a double-bottom base. A double bottom is shaped like a W with the middle peak serving as the buy point.
Nicholas Colas, co-founder of DataTrek Research, made this observation in his newsletter Wednesday. "The S&P 500 has more than doubled in the past decade, outpacing every other major equity market around the world."
Could the S&P 500 double again in the next 10 years?
Colas says yes, but adds: "History says it will not be Apple or Amazon that gets us there. It will be companies that are not yet public or even not yet created."
That's a good argument for tracking initial public offerings.
The stock market was mixed near midday Wednesday as the Nasdaq composite and S&P 500 pared losses on word of possible new trade talks with China. SwingTrader stock Apple ( AAPL) was volatile ahead of its product launch that is set to begin at 1 p.m. ET.
Crude oil prices were about 1.5% higher, and Hurricane Florence approached the East Coast. FANG stockNetflix ( NFLX) is attempting to regain a key resistance level with its near-three month consolidation. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Nasdaq led the stock market's early losses, falling about 0.7%. The composite had been down more than 1%. Meanwhile, the Dow Jones industrial average rose 0.5%, while the S&P 500 climbed 0.1%.
Among the Dow stocks, Apple fell over 1%, as it gave back a portion of Tuesday's 2.5% gain. The iPhone maker is expected to show off its latest iPhone models and its new Series 4 Apple Watch later today. Shares are trading about 14% above a flat base's 194.30 buy point despite a recent four-day losing streak.
Nike ( NKE) moved up 0.2%, as the retailer sits in the 5% buy range of a flat base's 81.10 entry. The stock regained its buy point Monday and added to those gains Tuesday.
Among FANG stocks, Netflix ( NFLX) was testing its 50-day moving average line — a key resistance level. Netflix stock was unable to recover that level in late August with its first attempt. Now, the stock will try for a second time, as it advanced about 1% Wednesday.
Among companies reporting earnings, recent IPO Pivotal Software ( PVTL) will report after the market close. The stock is shaping a cup-with-handle base with a 29.25 buy point. The software company is expected to lose 9 cents per share on revenue of $158.2 million. Shares dipped Wednesday.
Embattled social media stock Snap ( SNAP) hit another all-time low with a 9% decline. Analyst firm BTIG cut its rating to sell with a new price target of 5. The stock is down about 36% in 2018 alone.
IBD 50 Stocks
Among the top growth stocks, Viper Energy Partners ( VNOM) was one of the top performers in early trade, as higher oil prices boosted the oil and gas landholder. But the stock turned negative after initially gaining about 2%. Shares are extended from a cup with handle's 34.59 entry.
Meanwhile, cybersecurity leader Palo Alto Networks ( PANW) reversed from early gains to fall about 1% for a second straight trading session. Shares remain out of buy range from a flat base's 219.48 entry after last week's strong earnings results.
On the downside, PGT Innovations ( PGTI) declined 8% after announcing a stock offering late Tuesday. Shares are well-extended from a flat base's 19.70 buy point and are still above their 50-day line.
Stocks opened in tightly mixed trade Wednesday, as rising oil prices countered early losses among chip stocks. Meanwhile, the Apple ( AAPL) iPhone event and the approach of Hurricane Florence overshadowed early trade.
Amazon.com ( AMZN) advanced after announcing it would expand its grocery delivery services. Marijuana IPO Tilray ( TLRY) appeared set for a third straight gain. Gilead Sciences ( GILD) spiked on positive clinical trial results.
The Dow Jones industrial average added 0.1%, with Chevron ( CVX) and Exxon Mobil ( XOM) leading. The S&P 500 managed a fractional gain. Gilead Sciences and Discovery Communications ( DISCA) notched the S&P 500's widest early advances.
Chipmakers sat at the bottom of the morning's action. Intel ( INTC) was down 1% on the Dow and Micron Technologies ( MU) dropped 3.9%, among the weakest moves on both the S&P 500 and Nasdaq 100.
The Nasdaq Composite slipped 0.2%. Gilead was its top advancer. Chip stocks posted the 10 worst early hits among Nasdaq 100 listings.
IPO Stocks: Tilray Set For Gap Up Open; China's Nio Prices Offering
Home Depot ( HD) reversed early gains and dropped 0.4%, Lowe's ( LOW) fell 0.8% and generator manufacturer Generac ( GNRC) skidded 1.2% as speculation eased regarding the impact of Hurricane Florence. Forecasters see the storm hitting South Carolina late Thursday, then possibly stall over the East Coast. That suggests heavy impact from rain and potential flooding.
Home Depot shares remained a buy range above a 204.35 buy point. Generac was extended above a 53.88 buy point. Lowe's was extended above a 101.43 buy point.
China-based electric car maker and purported Tesla ( TSLA) rival Nio ( NIO) was set to launch its IPO. Shares priced at 6.26, the low end of the expected range of 6.25 to 8.25. The pricing values the company at $6.4 billion. Nio aims to raise $1 billion with the offering.
Gilead Surges, Amazon Expands Deliveries
Gilead Sciences popped 3.7% higher after announcing the rheumatoid drug filgotinib hit its targets in a phase 3 clinical study. The biotech giant co-developed the drug with Galapagos ( GLPG). Galapagos shares spiked 16% in premarket trade. Gilead is trading below a flat base buy point at 79.14.
Amazon gained 0.6% after announcing plans to expand delivery services from its Whole Foods grocery stores in 10 new cities. They include Las Vegas, Phoenix, Charlotte, Memphis, Nashville and New Orleans. The company also plans service expansion in Los Angeles, New York and Dallas/Ft.Worth. The service launched earlier this year now covers 38 cities, with grocery orders delivered in as little as an hour.
Amazon shares are extended after clearing a three-weeks tight pattern in July.
IBD 50 stockPGT Innovations ( PGTI) tumbled 6% in opening action. The company announced late Tuesday a follow on offering of 7 million shares of common stock. PGT shares are up 55% so far this year, at new highs and extended after clearing a flat base in July.
Oil Tops $70; Producer Prices Post First Slip In 18 Months
Prices paid to producers dipped 0.1% in August, just below expectations for a flat month, and reportedly the first decrease in 18 months. The Labor Department said core prices, minus energy and food, also slipped 0.1%, vs. consensus expectations for a 0.1% gain.
Oil prices rose 1.3%, sending West Texas Intermediate above $70 per barrel, after data from the American Petroleum Institute late Tuesday showed a weekly inventory decrease of 8.6 million barrels, vs. expectations for a 2.7 million barrel draw. The Energy Information Administration releases official supplies data at 10:30 a.m. ET.
Federal Reserve Gov. Lael Brainard speaks at 12.45 p.m. ET in Detroit. The Fed's August Beige Book report is due out at 2 p.m. ET.
Across global markets, China dug deeper into bear market territory on Wednesday, with the Shanghai Composite and Hong Kong's Hang Seng index each falling 0.3%. Japan's Nikkei 225 also dropped 0.3%.
Stocks in Europe recovered their early gains, as miners and energy companies lead the advance. London's FTSE 100 reversed and rose 0.2%. Frankfurt's DAX climbed 0.3%. And the CAC-40 in Paris held its 0.6% advance in afternoon trade.
Dow Jones futures were little changed Wednesday morning, along with S&P 500 futures and Nasdaq futures. Apple ( AAPL) will unveil new iPhones and other products at an even today. Apple stock and other S&P 500 index giants were solid winners Tuesday, lifting the major indexes. AMD ( AMD) set a fresh 12-year high Tuesday, but Intel ( INTC), Micron Technology ( MU) and Apple iPhone chipmakers helped push the Philadelphia Semiconductor Index below key support. Micron continued to tumble early Wednesday, weighing on other memory plays.
Dow Jones Futures Today
Dow Jones futures were a fraction above fair value. S&P 500 futures were flat. Nasdaq 100 futures were slightly higher. U.S. crude oil futures rose to just below $70 a barrel. Keep in mind that Dow Jones futures and other overnight action may not translate into actual results in the next regular session.
Apple Is Top Dow Stock In 2018
In Tuesday's stock market trading, the Dow Jones and S&P 500 index each rallied 0.4%. The Nasdaq composite advanced 0.6%. Apple stock and Amazon.com ( AMZN) rose 2.5% Tuesday. Microsoft ( MSFT) and Google parent Alphabet ( GOOGL), the next two biggest S&P 500 index members, popped 1.7% and 1.3%, respectively. Apple is the top Dow Jones stock so far in 2018, up 32.3%, just ahead of Nike ( NKE) at 32.1%. Microsoft stock is the No. 3 Dow performer, up 30%.
But chip stocks were notable losers, even with AMD continuing its big run.
Apple iPhone Event
The Apple product event starts at 10 a.m. PT. CEO Tim Cook is expected to unveil three Apple iPhone models. Analysts predict an update to its 5.8-inch OLED-screen iPhone X. The other new Apple iPhones include a 6.5-inch OLED model and a 6.1-inch LCD-screen handset. Also expect a look at the next-generation Apple Watch and other products.
Apple stock tends to fall on the company's iPhone event day and week. Shares rose 2.5% on Tuesday, but that snapped a four-day losing streak. Apple stock is up 18% since its July 31 earnings report. Shares rose 0.4% in premarket trade.
Chip Stocks Slump
Even as the Nasdaq composite led stock market averages higher Tuesday, the Philadelphia Semiconductor Index sank 1% to close just below its 50-day moving average for the first time since Aug. 23. The Philly Sox index has struggled for several months, testing its 200-day line several times. Its relative strength line, which tracks a stock's performance vs. the S&P 500 index, is holding near 2018 lows.
Chip stocks usually lead or take part in market rallies, especially tech-led uptrends. Chip stocks account for a big chunk of the market, especially the Nasdaq. And they're in virtually every tech product, as well as everything from cars to home appliances. If chip stocks aren't faring well, it's a bad sign for many other sectors.
AMD Stock Gain Is Intel's Pain
AMD stock edged higher Tuesday, up 87% since its July 25 earnings report. But a lot of that gain reflects Intel's pain. Intel has delayed its next-generation chips, giving AMD a technological edge for an extended stretch. Intel stock has fallen 14% since the chipmaker's July 26 Q2 report. Shares sank 3% to a seven-month low on Tuesday, and edged lower Wednesday.
Micron Stock Memory Loss
Meanwhile, Micron Technology slid 2.9% Tuesday to a seven-month low. Micron stock is down 3.7% in Wednesday's premarket, as Goldman Sachs became the latest to downgrade the memory-chip giant on concerns about NAND pricing and DRAM demand. That's also bad news for other memory-chip plays, including some big semiconductor equipment makers. Applied Materials ( AMAT) fell 1.25% in the premarket. Lam Research ( LRCX), which also got a Goldman downgrade, lost about 2.2%.
Meanwhile, Apple iPhone chipmakers Broadcom ( AVGO), Qorvo ( QRVO) and Skyworks ( SWKS) are all well off highs. All three retreated Tuesday, with Skyworks hitting its worst level since January 2017 on Tuesday.
Why the disconnect? Apple is focusing on higher iPhone prices vs. higher quantities, which is good for its profit margins but not for its suppliers' sales. Also, Apple is relying more on high-margin services revenue, which doesn't do much for component makers.
Major indexes enjoyed moderate gains but a majority of issues on the Nasdaq did not join the rally in stocks today. Volume rose. Meanwhile, FANG stock Netflix rebounded nicely, but still faces a key test at the 50-day moving average.
Netflix ( NFLX) shares rose 2% to mark its third advance in four sessions. The video streaming pioneer helped the Nasdaq composite rally 0.6%, its biggest gain since a 1% lift on Aug. 26. Yet losers topped winners by nearly 200 issues on the Nasdaq.
Netflix is building a brand-new base, which sets up the possibility of a future breakout. When the Los Gatos, Calif., firm broke out on May 23, it cleared a narrow flat base with a 338.92 proper buy point. That move engineered a trip to all-time new highs and 24.9% profit at the peak of 423.20 nearly five weeks later.
FANG Stock Action
Such a gain following a breakout triggered an offense-type IBD sell rule, which is to take at least partial gains at 20% to 25% above a proper buy point. However, Netflix still shows good prospects for robust growth. Analysts surveyed by Thomson Reuters see third-quarter earnings leaping 134% to 68 cents a share on a 34% rise in revenue to $4 billion.
For the fourth quarter, the Street sees a 22% gain in earnings to 50 cents a share and a 29% jump in the top line to $4.24 billion.
The Nasdaq 100 rose more than 0.7%. Both the Nasdaq composite and the 100 are showing buying support near the 10-week moving average, as seen on an IBD weekly chart.
The 10-week moving average is drawn in red in all weekly stock charts at Investors.com and MarketSmith, a more powerful stock charting and screening service. It gives the general trend in price over the past 10 weeks on a weekly closing basis.
Crude Oil Jumps More
The S&P 500 bumped up nearly 0.4% amid a more than 2.7% spike in West Texas Intermediate crude oil prices to $69.39 a barrel. Futures traders have pointed to the U.S. sanctions placed against Iranian oil imports as a key driver of strength in black gold.
The Dow Jones industrial average also rallied 0.4%, but the Russell 2000 lagged, up fractionally. The cost of money climbed. Toy and game, fiber optic telecom gear, automaker, chip manufacturing and truck transport stocks fell hard, sinking 1% or more. Chip equipment, mortgage services and jewelry retail shares also slumped.
The yield on the benchmark 10-year bond jumped by 4 basis points to 2.98%, matching an Aug. 7 high.
Software Stocks Rock, Again
New Relic ( NEWR) shot nearly 4% higher to 109.54 and notched a six-week high to 109.54 as volume climbed 20% above its 50-day average. The database software firm joined IBD SwingTrader earlier on Tuesday.
New Relic peaked in July at 114.78 and corrected mildly, falling just 16%. That's a bit too much of a decline to qualify as a flat base. So, the current action appears to be forming a cup base. That would give a standard buy point of 114.88 for CAN SLIM-style investing.
Enterprise software stocks also jammed today. Please read today's New Highs column and Sector Leaders story for more detail on names including ServiceNow ( NOW).
This Big Cap Leader Breaks Out
Electronic parts giant Amphenol ( APH) gained nearly 0.4% to 96.71 in fast turnover. The Big Cap 20 stock is still in buy range after clearing a 96 buy point in a base on base.
The Street sees profit rising 14% this year to $3.61 a share and up 10% in 2019.
The IBD Electronic-Parts industry group ranks a healthy No. 28 out of 197 industry groups for six-month relative price performance as of Monday's close. Strong industry performance often begets strong individual stock performance.
Major Sell Signal Triggers
On the downside, Funko ( FNKO) ended its parabolic ascent, falling almost 18% to 25.58. Volume soared to 4.1 million shares, vs. its float of 6 million.
The 5.47-point drop was Funko's largest since its breakout from a big cup base with a 10 entry on May 30.
Funko specializes in pop culture-inspired figurines, accessories, apparel and other goods. Sales jumped 21% last year to $516 million. Funko has also posted positive earnings per share of 17 cents, 23 cents, 3 cents and 7 cents in the past four quarters.
The stock debuted on the Nasdaq at $12 a share in November 2017.
The Dow Jones industrial average led a solid up session for the stock market in afternoon trading Tuesday. Inside the Dow Jones, Apple ( AAPL) was a strong gainer, rising 2.6%, ahead of Wednesday's media event.
The Dow Jones was up 0.6%, while the Nasdaq composite and S&P 500 added 0.5%. The Russell 2000 small-cap index eked out a small gain. Volume on the NYSE and Nasdaq was tracking higher than Monday's levels, more so on the Nasdaq.
Dow Jones stock Nike ( NKE) jumped 1% to 82.98. It's still in buy range from an 81.10 buy point. Positive sentiment was fueled after Canaccord Genuity upgraded shares to buy from hold. Canaccord also raised Nike's price target to 95 from 78.
Meanwhile, a merger made headlines in the semiconductor sector. Shares of Integrated Device Technology ( IDTI) jumped nearly 11% to 46.60 on news that Tokyo-based Renasas is acquiring it for $6.7 billion, or 49 a share. Renasas is mostly known for its automotive chips, but the deal with expand the company's markets into data centers and communications devices.
In stock market results today, Tesla ( TSLA) slumped 3% after soaring 8.5% Monday. Sellers were in Tesla stock Tuesday after Nomura Instinet downgraded shares to neutral. Nomura also slashed Tesla's price target to 300 from 400, saying the stock is "no longer investable."
While Tesla lagged in the Nasdaq 100, PayPal ( PYPL) outperformed. Shares rose nearly 2% to 91.50 as the stock tries to reclaim a 92.45 flat-base entry.
In earnings news, restaurant chain Sonic ( SONC) jumped out of a flat base with a 37.54 buy point. Shares soared 10% to 398.24. Sales declined for the eighth straight quarter, but Wall Street was encouraged by an upbeat profit and sales outlook.
Leaderboard name Roku ( ROKU) benefited from positive analyst chatter for the third straight session. Shares rose 2.5%. KeyBanc maintained an overweight rating but raised its price target to 81 from 67. Shares of Roku surged 5% Monday in strong volume after William Blair made positive comments. That followed bullish comments from Needham on Friday.
Inside the IBD 50, Grubhub ( GRUB) jumped to a new high, rising 4%. But it's extended after a bullish bounce off the 10-week moving average during the week ended July 27.
Stocks reversed higher and held gains in afternoon trading Tuesday, as Hurricane Florence sparked sharp gains in energy stocks and gasoline prices.
The Nasdaq climbed nearly 0.5% though it was off session highs. The composite pulled last week back near its 50-day moving average and appears to be rebounding. The Nasdaq 100 rose 0.7%, with the Invesco QQQ Trust ETF ( QQQ) also making a bounce from around its 50-day average.
The S&P 500 added 0.4% after rising Monday nearly 0.2% to end a four-day losing streak. The S&P 500 also was giving back some gains around 1:30 p.m. ET.
The Dow Jones industrial average climbed 0.6%. The Dow has been sideways this month, trading around 25,950 during this time. Dow Jones industrial stock Nike ( NKE) rose 1% after an analyst upgrade. The stock has erased all losses that started with the launch of the controversial Colin Kaepernick ad campaign.
Market volume was running higher compared with the same time on Monday. Advancers led decliners by 7-to-5 on the NYSE and the two sides were even on the Nasdaq.
Chip Stocks Weaker
The Nasdaq climbed despite that semiconductor stocks were mainly weaker. IBD's chip equipment and chipmaker industry groups were down around 0.9%. Strength in internet stocks helped offset the decline in chips.
Energy stocks also led as the price of crude oil jumped nearly 3% to $69.50 a barrel. Oil followed a spike in gasoline futures as Hurricane Florence remained on track to hit the Carolinas on Thursday with Category 4 winds. Millions are evacuating the area, and the hurricane is expected to cause flooding, power outages and other damage.
The region is a major tobacco-growing area, and tobacco was one of Tuesday's top industry groups, up 2%.
The Innovator IBD 50 Fund ( FFTY) was up 1%. It outperformed thanks largely to Integrated Device Technology ( IDTI), which gapped up 11% on confirmation of a buyout. Japanese chipmaker Renesas Electronics will acquire IDT acquire in a deal worth $6.7 billion, or $49 a share in cash.
Wix.com ( WIX) broke out of an undefined pattern, clearing a 112.50 correct buy point in a cup-type base. But volume was mediocre. The provider of website publishing tools is overshadowed in an industry group that has ServiceNow ( NOW), Paycom ( PAYC), Workday ( WDAY), Salesforce.com ( CRM) and other leading software companies.
Wix.com is expected to have its first profitable year in 2018.
U.S. stock indexes were mixed late Tuesday morning, as the Nasdaq and the Dow Jones gripped moderate gains. There was no reported progress on the trade front with either Canada or China, but the stock market appeared unworried.
Meanwhile, pockets of strength were developing in stocks likely to benefit from the arrival and repairs related to Hurricane Florence.
The Nasdaq rose 0.5%, while the S&P 500 and the Dow Jones industrial average eased 0.4% and 0.5% respectively. Small caps were virtually flat.
Volume was higher on both major exchanges vs. the same time Monday.
Hurricane Florence, a category 4 storm, is expected to hit South Carolina on Thursday. The stock of Duke Energy ( DUK), which includes service to the Carolinas, has stayed calm. Duke is holding above its 50-day moving average.
In a post on its website, Duke Energy said Hurricane Florence could become more damaging than 2016's Hurricane Matthew.
Several stocks likely to benefit from post-storm recovery efforts rose. Home Depot ( HD) hit a new high in strong volume and was on track midday Tuesday for its sixth gain in seven sessions. The stock has gained about 7% over the seven sessions.
Lowe's has shown similar strength and struck a new high in fast trade. Power generator manufacturer Generac ( GNRC) posted a new high in heavy volume.
Midcap stock Beacon Roofing Supply ( BECN) is nowhere near a high, but the stock was set to peg its fifth gain in six sessions. The stock added 0.8% late Thursday morning in fast trade. Beacon retook its 50-day line Monday as it jumped about 8%.
Earnings are expected to grow 20% in fiscal 2018 ending in September. In fiscal 2019, earnings growth of 27% is in the forecast.
Among IBD's 197 industry groups, grocery stores and oil explorers advanced. Toys and farm operations fell.
The stock market turned mixed in morning trade Tuesday — the 17th anniversary of the 9/11 terrorist attacks. Late Monday, news reports said that China is ready to ask the World Trade Organization for authorization to impose sanctions on the United States. Dow stocks Nike ( NKE) and Home Depot ( HD) moved further above their recent buy points, but are still in buy range. (For updates on this story and other market coverage, visit the Stock Market Today.)
The tech-heavy Nasdaq composite reversed from early losses to rise almost 0.2%. The S&P 500 and Dow Jones industrial average each were about unchanged.
Among the Dow stocks, Nike was the top performer with an over-1% advance after Canaccord Genuity upgraded the retail stock from hold to buy. The analyst moved its price target from 78 to 95. On Monday, Nike reclaimed its flat base's 81.10 buy point, according to MarketSmith chart analysis. The 5% buy range runs up to 85.16.
Meanwhile, Home Depot moved up almost 1% and is on the verge of being extended from a 204.35 cup-with-handle entry. The buy range tops out at 214.57.
Apple ( AAPL) looked to snap its losing streak with a 0.4% gain early Tuesday. Shares are about 5% off their all-time high set on Sept 5. The iPhone maker is still about 12% above a flat base's 194.30 buy point.
Electric automaker Tesla ( TSLA) fell over 2% after Nomura Instinet downgraded the stock from buy to neutral, citing concerns about CEO Elon Musk's actions. Despite improving fundamentals, the analyst commented that Musk's behavior could hurt Tesla's brand.
IBD 50 Stocks
Among the top growth stocks, ServiceNow ( NOW) rose about 0.6%, as it added to its three-day win streak. Shares are in the 5% buy range of a flat base's 194.91 buy point.
Meanwhile, Momo ( MOMO) snapped back from a heavy initial decline, turning 2% higher. The Chinese stock is battling for support at its 50-day moving average line amid a deep cup with handle. The choppy base shows a 47.85 buy point.
Trade worries weighed on Tuesday's open, sending stocks to narrow losses as investors awaited the next phase of the U.S.-China trade war.
The Dow Jones industrial average and S&P 500 each slipped 0.3%. Intel ( INTC) dived to the Dow's widest early loss, with China trade war-sensitive Boeing ( BA) and 3M ( MMM) close behind. The Nasdaq Composite dropped 0.4%, with Micron Technologies ( MU) and Western Digital ( WDC) leading the downside.
Nike ( NKE) and Home Depot ( HD) topped the Dow in premarket trade. Activision Blizzard ( ATVI) led the S&P 500.
Today's anniversary of the Sept. 11, 2001, terrorist attacks in New York, Washington and Pennsylvania overlaps with the second day of the Rosh Hashanah holiday. Both tend to mute market activity. In addition, residents along the East Coast are preoccupied as millions evacuate ahead of Hurricane Florence. The strengthening Category 4 storm is expected to slam into South Carolina on Thursday.
Overseas, Asia's markets continued their recent rout on Tuesday. Hong Kong's Hang Seng Index ended the day down 0.7%. That placed the benchmark more than 20% below its late January high, meaning that both Shanghai and Hong Kong are now in bear markets. India's Sensex dived 1.3% to end 4% below its Aug. 29 high.
Again, Japan halted the selling. Tokyo's Nikkei 225 surged 1.3% as the yen dropped and tech stocks tracked Monday's positive performance in the U.S. In Europe, miners and automakers led stocks lower with the FTSE 100 down 0.6%. Frankfurt's DAX slipped 0.7% and the CAC-40 in Paris lost 0.5% in afternoon trade.
Hurricane Lifts Home Depot; Nike Upgraded
Home Depot and Nike led the Dow's early advancers, up 0.7% and 1.3%, respectively, in opening trade. Home Depot continued to receive a boost from hurricane expectations. The stock is in a buy range through 214.56, above a flat base buy point at 204.35.
Nike received an analyst upgrade to buy, from hold, from Canaccord Genuity. The brokerage said "Nike's new 'Just Do It' ad campaign with Colin Kaepernick was a stroke of genius." The note lifted the stock's price target to 95, from 78.
Wedbush had raised its price target on Nike stock to 90, from 85, on Monday, also based on marketing moves and product advances. Nike shares ended Monday in a buy range through 85.15. It retook an 81.10 flat base buy point on Monday.
Chip stocks were moving, led by IBD 50 stockIntegrated Devices ( IDTI). Integrated spiked 11%, after Japanese chipmaker Renesas said it would buy the San Jose, Calif.-based outfit. Renesas seeks to boost its exposure to self-driving auto technologies.
Advanced Micro Devices climbed 1.5%. Intel ( INTC) dropped 0.9%, to trade near the bottom of the Dow. Intel announced late Monday it had acquired system-on-a-chip maker NetSpeed for an undisclosed amount.
Earnings news produced some of Tuesday's widest premarket losses. Apparel retailer Francesca's Holdings ( FRAN) careened 31% lower after reporting weak second-quarter results. August IPO Sonos ( SONO) dived 20%, after reporting its first quarter as a publicly traded company late Monday.
Dow Jones futures extended losses Tuesday morning, along with S&P 500 futures and Nasdaq futures. A longtime Tesla ( TSLA) bull said that the electric-vehicle maker needs a board shake-up to rein in Elon Musk, while another analyst said Tesla is "no longer investable." Apple stock fell for a fourth straight session in above-average volume, paring gains from a big run. It's a situation that underscores how investing is an art as well as a science. That's something that late co-founder Steve Jobs would appreciate, given the Apple co-founder's lifelong pursuit of designing products for form as well as function.
Dow Jones Futures Today
Dow Jones futures fell 0.4% vs. fair value after being up most of Monday night S&P 500 futures slid 0.3%. Nasdaq 100 futures lost 0.3% after being up as much as 0.5%. Trump trade war fears will be front-and-center as U.S.-Canada talks on revising Nafta resume today.
Keep in mind that Dow Jones futures and other overnight action often don't translate into actual trading in the next regular session.
In Monday's stock market trading, the Dow Jones fell 0.2%. But the S&P 500 index climbed 0.2% and the Nasdaq composite 0.4%, as both snapped four-day losing streaks.
Apple Stock Chart
Apple stock fell 1.3% to 218.33 on Monday, sliding yet again in above-average trade. Shares are now 5% off their Sept. 5 peak of 229.67. But that follows an 18% move from an 184.30 flat-base buy point after the Apple earnings report late on July 31.
This is where investing becomes as much of an art as a science, which is something Steve Jobs excelled at. Sometimes there are clear rules. Buy leading stocks breaking out in high volume past this entry point. Sell if a stock falls 7%-8% from your purchase price. But sometimes investors must make judgments. Do you hold Apple stock during the current pullback or take at least partial profits? If you hold firm you could reap big long-term gains. But you could also see your short-term gains wither further. Ultimately, such decisions depend on your general risk tolerance and your conviction in a particular stock. You might believe in the Apple stock story, making you more willing to hang tough in a pullback than you would with a volatile IPO with less of a track record.
Keep in mind that Apple will unveil new iPhones and other products on Wednesday. That adds an element of risk and reward to the stock's near-term outlook.
Apple stock was slightly lower early Tuesday.
Tesla Stock Bull Urges Board Shake-Up
Tesla CEO Elon Musk is often compared to Steve Jobs, who might have loved Tesla's car design and technology. But not the Tesla stock chart. It's not working: Shares have been struggling for nearly a year, even though Tesla stock rebounded 8.5% to 285.50 on Monday. And the chart is aesthetically unappealing, with wide-and-loose trading.
"If Tesla doesn't make some changes, starting with the board, it could spell the end for the company," he said.
Munster stressed that Elon Musk is vital to Tesla's success, but that his recent behavior is spurring top executives to leave, making it harder to attract talent and generally turning people against Tesla. He said the main problem is that Elon Musk is "surrounded by people unwilling or unable to stand up to him," with the board a prime example.
Munster urged Elon Musk to step down as chairman, along with another non-independent board member. He suggested former Boeing ( BA) CEO Jim McNerney or even ex-Vice President Al Gore, currently on Apple's board, as a possible chairman. Munster also suggested that board members with close ties to Musk to voluntarily step down.
Elon Musk 'Tainting' Tesla Brand
Nomura/Instinet analyst Romit Shah downgraded Tesla stock to neutral from buy, cutting the price target to 300 from 400. He blamed Musk's recent actions.
"We are worried that this behavior is tainting the Tesla brand, which in terms of value is most important," Shah wrote in a note titled "No Longer Investable."
Shah had been among the more bullish Tesla analysts.
Meanwhile, Tesla is ditching two of its seven paint options for its vehicles, Musk tweeted. Obsidian Black and Metallic Silver will only be available by special request, and cost more.
Tesla stock fell 2% in early Tuesday trading, following Monday's big gain. On Friday, shares plunged to a five-month low. The relative strength line, which tracks a stock's performance vs. the S&P 500 index, tumbled to an 18-month low.
Stocks today showed more profit-taking in Apple, receding confidence in social media firm Snap, and continued money flowing into the transportation sector.
The Nasdaq composite led the way among the major market indexes, rising nearly 0.3% despite a fourth down day in a row for Apple ( AAPL). The iPhone, MacBook and digital services titan still remains a market leader. In fact, at 218, Apple commands the largest gain quarter to date, up almost 18% since July 1.
Those who bought Apple stock at that proper entry could decide to harvest at least some profits. Apple initially cleared a first-stage cup with handle at 118.12 all the way back in Jan. 6, 2017.
Apple Still A Leader
Apple is a tech component of the Dow Jones industrial average, which edged 0.2% lower. Weakness in UnitedHealth ( UNH) and Boeing ( BA) hurt the Dow's cause. UnitedHealth dropped more than 3% on an analyst downgrade. Yet even at the day's low of 258.75, shares held up above the crucial 50-day moving average.
The S&P 500 rose 0.2% following last week's 1% weekly drop and snapped a four-day losing streak.
Meanwhile, the Dow Jones transportation average flew 1.8% higher. At 11,554, it's expanded a year-to-date gain to almost 9%.
Trucking And Logistics Stocks Strengthen
Logistics and trucking firms excelled, including XPO Logistics ( XPO) and J.B. Hunt ( JBHT). Both stocks are forming bases.
Going back to the Dow Jones industrials, Pfizer ( PFE), Merck ( MRK) and Johnson & Johnson ( JNJ) are all having a strong third quarter with solid double-digit gains since July 1.
Pfizer, highlighted in IBD's The Income Investor column, gave back early gains to fall less than 0.1% to 42.07. Yet shares are in a nice budding uptrend after the seller of a wide range of medicines cleared a 39.53 buy point in a long saucer base. That saucer featured a handle, offering a lower buy point at 37.87.
Elsewhere, Snap ( SNAP) dropped 2% to 9.74 in heavy turnover following news that its COO Imran Khan is leaving the social network.
Snap shares have struggled since popping sharply in February. One major hurdle: the issue of profitability. The Venice, Calif., firm has seen the top line grow at slower rates and still does not have a positive earnings outlook.
The Street sees Snap losing 55 cents a share this year and 42 cents in 2019.
Snap went public at $17 a share on March 2, 2017.
In other markets, WTI crude oil futures eased 0.3% to $67.52 a barrel. The yield on the benchmark U.S. Treasury 10-year bond closed unchanged at 2.94%. The 3-month T-bill yields 2.14%, also unchanged from Friday.
Please follow Saito-Chung on Twitter at @IBD_DChung for more on growth stocks, chart analysis, breakouts, and financial markets.
The Nasdaq composite and S&P 500 held modest gains in afternoon trading Monday as trade tension with China stayed on the front burner. Home Depot ( HD) and Nike ( NKE) outperformed in the Dow, while Tesla stock led the Nasdaq 100.
Shares of Tesla ( TSLA) jumped 6% to 279.50, helped by positive comments from Baird. The analyst maintained an overweight rating with a 411 price target.
The Nasdaq composite and S&P 500 were up about 0.3%, and the Dow Jones industrial average was mostly flat. Volume on the NYSE and Nasdaq was tracking about 10% lower than Friday's levels. Light volume was mostly due to the Rosh Hashanah holiday.
The Nasdaq slumped 2.5% last week, but it wasn't clear that institutions were the driving force behind the selling as weekly volume fell from the prior week's level. Still, the Nasdaq currently shows five distribution days, or higher-volume declines, in recent weeks. Days like these are a sign of at least some institutional selling.
In stock market results today, Apple ( AAPL) weighed on the Dow Jones, falling 1.3%. Analysts debated how $200 billion of China tariffs would affect the tech bellwether. What seems certain is that Apple will be forced to raise prices on some of its products if the U.S. and China can't come to an agreement.
Goldman Sachs ( GS) and JPMorgan ( JPM) also lagged in the Dow with losses of 0.6% and 0.4%, respectively.
Tesla Stock Recovers
Tesla stock was in recovery mode Monday, but it's still damaged goods from a technical perspective after a flurry of negative headlines around the company. Shares plunged nearly 13% last week. Tesla was recently 28% off its recent high.
Among the day's gainers, Leaderboard name Roku ( ROKU) soared 6% in strong turnover. There was not news to account for the move.
Meanwhile, three executive departures from three different companies made headlines.
After jumping nearly 6% last week, shares of CBS ( CBS) gave back 1.4% on news CEO Les Moonves is resigning due to sexual harassment charges. Joseph Ainniello was named interim CEO until a successor is found. The stock's price action Monday seemed to be a case of "sell the news" after shares of CBS soared nearly 6% last week.
Shares of Alibaba ( BABA) dropped 4% on news Executive Chairman Jack Ma is leaving the company next year. Despite robust fundamentals, Alibaba remains on a downtrend. Its now about 28% off its high.
Snap ( SNAP) stock slipped nearly 3% on news Imran Khan, the company's chief strategy officer, is leaving.
Hurricane Florence Winners
As Hurricane Florence gathered steam in the Atlantic, a couple of hurricane-related stocks rose. Generac ( GNRC) cleared a flat base with a 56.74 entry. Shares jumped nearly 7% to 59.42. Generac makes power generators. Meanwhile, PGT Innovations ( PGTI), a maker of impact resistance doors and windows, hit a new high, rising 4% to 26.38. It was featured earlier this month in the IBD 50 Stocks To Watch column.
PGT was a top gainer in the IBD 50, along with Medpace ( MEDP), Palo Alto Networks ( PANW), Abiomed ( ABMD), Control4 ( CTRL) and Alarm.com ( ALRM).
The Innovator IBD 50 ETF ( FFTY) gained just over 1%.
U.S. stocks and indexes in Europe were mostly positive Monday, but markets in Hong Kong and China were struggling.
The S&P 500 popped 0.3% midday Monday, while the Nasdaq added 0.2%. The Dow Jones industrial average was just below flat. Small caps rose 0.2% on the S&P 600 gauge.
Volume fell on both major exchanges vs. the same time Friday.
U.S. trade disputes with Canada and China remained unresolved, but stock indexes suggested the tariff war is hurting China the most.
China's Shanghai Composite is about 25% off its high, which is bear market territory, while indexes in the U.S. and Canada are trading 1% to 2% off their highs.
An index that drops 20% or more off its high is confirming a bear market. Hong Kong's Hang Seng hit the 20% mark Friday and reached the 21% mark Monday.
So, if there's ever a winner in a trade war, the markets appear to be saying China has more to lose than the U.S.
China-based stocks trading on U.S. exchanges are in a painful state. Baidu ( BIDU) is 24% off its high; NetEase ( NTES), 49%; Autohome ( ATHM), 40%; Weibo ( WB), 50%; Baozun ( BZUN), 29%; and Momo ( MOMO), 19%.
Going into Monday's session, Momo was the only China-based stock in the IBD 50. The IBD 50 is comprised of the best stocks in fundamentals and technicals.
Among U.S. stocks, connected home software provider Control4 ( CTRL) rose about 3% in heavy volume. Inside CI magazine reported that Control4 improved its music integration with an operating system update.
Last year, Control4's stock rose 192%. The stock then corrected 43% as it consolidated in the first four months of 2018. Control4 has been rising since early May and broke out Aug. 21. The stock is 6% above its 33.57 buy point.
Security software provider Palo Alto Networks ( PANW) advanced 3% in heavy volume. The stock is trading just above the 5% buy zone from a 219.48 buy point.
The stock market rallied higher early Monday, as it looked to rebound from last week's losses. Apple ( AAPL) was on pace to extend a losing streak ahead of this week's product launch. Chinese e-commerce giant Alibaba ( BABA) fell after founder Jack Ma announced his stepping down. Leaderboard stock and IPO LeaderRoku ( ROKU) hit a fresh high in morning trade, but pared its gains. (For updates on this story and other market coverage, visit the Stock Market Today.)
The S&P 500 led the stock market action with a 0.3% gain, while the Dow Jones industrial average traded 0.2% higher. The tech-heavy Nasdaq composite shed an early advance and slipped into narrow losses.
Among the Dow stocks, Apple fell 1.6% ahead of Wednesday's annual fall product launch event for its new iPhone models. Shares are on pace to extend a three-day losing streak, as they fell about 5% from their all-time high set on Sept. 5.
Meanwhile, Nike ( NKE) advanced about 2%, as the retail stock looked to regain its flat base's 81.10 buy point, according to MarketSmith chart analysis. Wedbush raised its price target from 85 to 90, maintaining its outperform rating.
FANG stock Amazon.com ( AMZN) turned lower after initial gains. Wells Fargo upped its price target from 2,110 to 2,300. Shares fell 4.3% over their thee-day losing streak, but remain squarely above their 50-day moving average line.
Video streaming hardware provider Roku hit a new high before trimming gains. Shares were barely up after being up as much as 2.3%.
Former Chinese stock leader Alibaba fell nearly 2% after executive chairman and founder Jack Ma announced plans to step down. CEO Daniel Zhang will succeed Ma. The stock is trading about 25% off its high amid the stock's over-three month correction.
On the downside, Chinese stock Momo ( MOMO) was the biggest loser with a 3% decline. Shares are tracing an abnormally deep cup with handle with a 47.85 buy point. The stock's relative strength line is significantly lagging, indicating substantial market outperformance.
Stock futures lurched higher at Monday's open, as the Dow headed an early rebound and the Nasdaq and S&P 500 looked to snap their four-day losing streaks.
Nike ( NKE) was an early mover, after a price target hike and a strong reading on early September online sales. CBS ( CBS) lost ground after sexual harassment allegations led to the resignation of its chief executive. Tesla ( TSLA) rebounded aggressively in early trade.
Among chip stocks, Advanced Micro Devices ( AMD) and Netherlands-based ASML Holdings ( ASML) both bolted higher in early trade. Meanwhile, China's Alibaba Group Holdings ( BABA) backed off on news of founder Jack Ma's retirement.
The Dow Jones industrial average and S&P 500 each popped 0.4% at the start of trade. The Nasdaq Composite advanced 0.3%. Home Depot ( HD) and Nike topped the Dow. Tesla easily led the Nasdaq 100, while Tesla and Wynn Resorts ( WYNN) and ASML Holdings also posted strong early moves. (For updates on this story and other market coverage, visit the Stock Market Today.)
Last week's action showed the Dow holding relatively steady, while the Nasdaq and S&P 500 each posted four-day declines. Tech stocks led the losses, with the Nasdaq ending the week with a 2.6% loss — its worst slip since late March.
Markets in China and India sold off hard on Monday, partly due to Friday's threats from President Trump to broaden sanctions against China. The Shanghai Composite, already in a bear market, dumped 1.2%. Hong Kong's Hang Seng Index fell 1.3%, moving it to very near to bear market territory. In India, the Bombay Stock Exchange's Sensex dropped 1.2%.
Japan provided a bulwark against the selling, with Tokyo's Nikkei 225 rising 0.3% to end its six-day slide. Stocks in Europe showed healthy gains ahead of central bank decisions due from the Bank of England and the European Central Bank later in the week. The CAC-40 in Paris surged 0.7%. London's FTSE 100 added 0.3% and Frankfurt's DAX advanced 0.5% in afternoon trade.
Alibaba Group Holding fell 2.5%, after Founder and Chairman Jack Ma announced he would retire in a year. CEO Daniel Zhang would take Ma's post at the head of China's largest technology company, while Ma remains on the company's board until the 2020 annual shareholders meeting. Alibaba shares dropped more than 7% last week, to trade down 23% from a June high.
Nike shares jumped 2%, following a price target hike from Wedbush. Independent research showing a strong start to September sales. Wedbush lifted the stock's price target to 90, from 85. It cited strong sales momentum — aided by a French win in the World Cup.
Separately, information from e-commerce researcher Edison Trends said Nike's online sales appeared to jump 31% in the first week of September. That's up from a 17% gain for the same week last year. That alleviated some concerns that the company's decision to place controversial sports figure Colin Kaepernick at the head of its most recent "Just Do It" ad blitz would hurt sales. Nike shares dipped more than 2% on concerns last week. It ended Friday up 28% for the year and down 4% from an Aug. 22 high.
Retailer Foot Locker ( FL) spiked 4% on an upgrade to outperform, from market perform, from Wells Fargo. The note, which also lifted Foot Locker's price target to 58, from 50, cited ad campaigns and product improvements at Nike. Monday's gain left Foot Lockier shares below their 10-week moving average, within a three-month consolidation.
Some chip stocks were in early motion, with Advanced Micro Devices up 2.9%. Wells Fargo maintained its outperform rating on the stock, and raised its price target to 34, from 20. AMD shares are up 74% since clearing a 15.75 buy point in June.
ASML Holdings gained 3% at the open. The chip-equipment maker is looking to bounce back after a 12% tumble last week.
Network solutions leader Akamai Technologies ( AKAM) climbed nearly 2% in early trade. DA Davidson hoisted the stock's rating to buy, from neutral. The stock is looking to retake support at its 10-week line, below an 81.34 buy point in a double-bottom base.
Dow Jones futures rose solidly Monday morning, along with S&P 500 futures and Nasdaq futures, signaling a market rebound at the open. Last week growth stocks sold off, with the Nasdaq composite falling 2.55%, the S&P 500 index 1% and the Dow Jones 0.2%. On Wednesday, new Apple iPhone handsets will be unveiled. Apple stock fell after warning Friday that President Donald Trump's escalating China trade war would affect many of its products. Trump says Apple ( AAPL) should manufacture in the U.S. Meanwhile, Tesla ( TSLA) is reeling after a wild month for Elon Musk. Finally, CBS ( CBS) CEO and Chairman Les Moonves resigned Sunday as six more women accused him of sexual harassment or worse.
Dow Jones Futures Today
Dow Jones futures rose 0.4% vs. fair value. S&P 500 futures advanced 0.4%. Nasdaq 100 futures climbed nearly 0.6%. Keep in mind that Dow Jones futures and other overnight action often doesn't translate into actual trading in the next regular session. Futures did not indicate that the Nasdaq composite would fall significantly over the last three sessions.
New Apple iPhone Handsets, Trump Trade War Impact
On Wednesday Apple will unveil several products. The headliners are new Apple iPhone models, refreshing the iPhone X that debuted last fall. They are expected to include expensive 5.8-inch and 6.5-inch iPhone Xs with OLED screens as well as a cheaper 6.1-inch Apple iPhone. Average Apple iPhone prices continue to rise, as the company tries to tap higher margins in a generally stagnant smartphone market. Apple also should showcase new Apple Watch models and iPad Pro.
Meanwhile, on Friday afternoon Apple said that the Trump trade war threat to impose tariffs on all Chinese imports would hit many of its products. Trump tariffs could fall at any time on a further $200 billion of Chinese goods, with Trump threatening another $267 billion worth in the near future.
"Our concern with these tariffs is that the U.S. will be hardest hit, and that will result in lower U.S. growth and competitiveness and higher prices for U.S. consumers," Apple said in its letter to the Office of the U.S. Trade Representative.
Apple stock, which had been slightly higher, closed down 0.8% on Friday. The stock market averages settled near session lows. Apple stock is a member of the Dow Jones industrial average, S&P 500 index and Nasdaq composite.
For the week, Apple stock fell 2.8%, outpacing the major averages. But the Apple stock chart looks healthy. Shares hit a record high Wednesday and surged nearly 20% in August.
Trump responded Saturday, reviving his longstanding call for Apple to make products in the U.S. But Apple, if it did decide to shift production from China, might go to other low-cost areas.
More broadly, by targeting all Chinese imports, the Trump trade war will have a direct impact on a wide range of consumer products, rather than just industrial goods and components. The U.S. imports a huge amount of cell phones, laptops, toys, video game consoles and many more. Americans may not see the connection between steel tariffs and their pocketbook, but hike the cost of handsets and laptops by 25% and they'll notice.
Elon Musk Takes Tesla Stock On Strange Trip
Tesla stock rose 2.6% in premarket trading, signaling a rebound. But put that premarket positive action in context.
From Aug. 7 to Sept. 7, Elon Musk took Tesla stock on a strange trip. On Aug. 7, Musk announced that he was mulling a go-private move for Tesla, with "funding secured." It quickly became clear that there was nothing close to secured funding. After a few weeks of going through the motions, Tesla called it off. But the episode triggered an SEC probe, shareholder lawsuits and a disturbing New York Times interview. Musk also has continued to accuse a Thai cave rescuer of being a pedophile. And to put an exclamation point on this span, Musk smoked pot on a podcast on as Tesla said two more top executives left, including the chief accountant after less than a month.
Tesla stock has plunged 32% from its near-record Aug. 7 peak of 387.46. It's about 26% below where it was just before Musk's go-private tweet intraday Aug. 7.
Elon Musk announced a Tesla staff shakeup late Friday, including promoting Jerome Guillen as its new president of automotive operations. Many observers have long urged Tesla to hire a chief operating officer or manufacturing chief to get production numbers and quality up. Even assuming Guillen is the right person to do so, will Musk step back from day-to-day micromanaging and haphazard decision-making?
Stepping back from Elon Musk and Tesla the company, Tesla stock is in terrible shape. At Friday's close of 263.24, it's actually below its February 2014 peak. Shares are close to their April low of 244.59. Worse, the relative strength line, which tracks a stock's performance vs. the S&P 500 index, is at a 20-month low and not far from hitting a four-year low.
CBS Les Moovnes Out
CBS CEO Les Moonves resigned Sunday, with COO Joseph Ianniello serving as acting CEO for now. Talks heated up Sunday as The New Yorker reported six more women accusing him of sexual misconduct. Les Moonves had been in line to get a severance package of $100 million or more. For now, CBS and Moonves "will donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace." Moonves will only get the rest of his severance if he's cleared in a probe of the sexual harassment and assault claims.
Les Moonves' ouster is part of a broader settlement with controlling CBS shareholder National Amusements. National Amusements, owned by Sumner Redstone and his daughter Shari, will not push a CBS merger with Viacom ( VIAB) for 18 months. National Amusements also is the controlling shareholder in Viacom stock. The CBS board also gets a major revamp, with six new independent directors replacing five independent directors and one tied to National Amusements.
CBS investors likely will be glad to have the Moonves saga over and a Viacom merger on hold, but that may already be priced in. CBS stock rose 5.7% last week on reports that the parties were working on a broad settlement. Viacom stock fell 1%.
CBS stock edged lower in Monday's premarket. Viacom stock rose 1.1%.
Stocks closed lower Friday on new tariff threats and a new inflation fear, but leading stocks generally outperformed.
The Dow Jones industrial average lost 0.3% and the S&P 500 dipped 0.2%. The Nasdaq composite gave up 0.3% as well.
Volume fell from Thursday's levels, according to unconfirmed figures. Decliners topped advancers by 2-to-1 on the NYSE and by 15-to-13 on the Nasdaq.
Wall Street initially was shaken by the August jobs report. Payrolls rose more than expected and wage growth at a 2.9% annual rate was the highest in nine years. That sparked fears of inflation, and raised expectations that the Federal Reserve will indeed raise interest rates a fourth time this year.
The yield on the 10-year Treasury jumped 6 basis points to 2.94% as investor bet on a rate hike in December. A quarter-point increase is regarded as almost a certainty for this month's Fed meeting.
Indexes bounced and were higher at midday, but then sold off anew on news that President Trump plans tariffs on $267 billion of Chinese imports, on top of $200 billion already in the works. Indexes closed near session lows.
But the IBD 50 shined, rising 0.9% late Friday in a solid show for the leading stocks. The Innovator IBD 50 ETF ( FFTY) rose 1%. Only about half the IBD 50 stocks climbed, but a few made outstanding gains that caused the index to smash the major indexes.
Five Below ( FIVE) soared 13% after the discount retailer beat quarterly profit and sales expectations, while management raised its full-year outlook. Palo Alto Networks ( PANW) rose 3% after the cybersecurity company also beat expectations. Health Insurance Innovations ( HIIQ) climbed nearly 6%. Internet firms Match Group ( MTCH), Grubhub ( GRUB) and Momo ( MOMO) also outperformed.
For the week, the Nasdaq slid 2.5%, its worst week since March. The composite erased nearly all gains from the previous two weeks. The S&P 500 fell 1% and the Dow was nearly flat.
In an optimistic sign, the Nasdaq held above its 50-day moving average. Invesco QQQ Trust ( QQQ), the ETF that tracks the Nasdaq 100, got closer to its 50-day line and also held above it.
Utilities and other interest rate-sensitive stocks were among Friday's weakest. The SPDR Utilities ETF ( XLU) slid 1.2%. SPDR Dow Jones REIT ETF ( RWR) fell 1.1%.
Retail was one of the day's the best sectors, as discount and specialty chains performed well.
Sprouts Farmers Market ( SFM) broke out of a cup-without-handle base with a 28.39 buy point. Fast food chain Sonic ( SONC) topped the 37.54 buy point of a flat base but closed below the entry. Neither stock's relative strength lines made new highs, a drawback for these breakouts.
Blue chip stocks were under mild selling pressure in afternoon trading Friday after President Trump threatened another $267 billion in China tariffs. Intel ( INTC), Procter & Gamble ( PG) and United Technologies ( UTX) lagged in the Dow Jones, while Tesla ( TSLA) and semiconductor stocks were a drag on the Nasdaq 100.
The Dow Jones industrial average, S&P 500 and Nasdaq composite were down around 0.1% to 0.2%. Volume on the NYSE and Nasdaq was tracking about 5% to 10% lower than Thursday's levels at the same time of day.
Shares of Tesla crashed 7% on a flurry of negative headlines. CEO Elon Musk appeared on the Joe Rogan podcast Thursday, drinking whiskey and smoking pot. Early Friday, two executives left the company.
More China Tariffs?
The $267 billion in additional tariffs would be in addition to $200 billion already proposed. Currently, only $50 billion in tariffs on Chinese imports are fully in effect.
In economic news, the August jobs report came in slightly better than expected, with nonfarm payrolls up 201,000. The unemployment held steady at 3.9%. Wages rose, fueling concerns about inflation. The 10-year Treasury yield jumped 7 basis points to 2.94%. According to CME Group FedWatch, there's a 79% chance of another quarter-point hike at the December meeting. A quarter-point hike at the Sept. 26 meeting is widely expected.
In stock market results today, new issue Zscaler ( ZS) bounced back with conviction after paying a visit to its 50-day moving average Thursday. Shares rose nearly 10% to 45.95. A breakout over a 44.08 entry didn't get very far, but the security software name is back above the buy point.
Meanwhile, two IBD Sector Leaders soared on earnings. Shares of Five Below ( FIVE) were up 13%, while Palo Alto Networks ( PANW) added 4%.
Security software leader Okta ( OKTA), an industry group peer of Palo Alto Networks, soared 20% to 72.25. It reclaimed a 61.10 entry.
Inside the MarketSmith Growth 250, small cap MCBC Holdings ( MCFT) broke out in heavy volume, rising 13% to 33.56. It's slightly extended past the 5% buy zone from a 31.36 entry.
Inside the IBD 50, top gainers included Health Insurance Innovations ( HIIQ), Ulta Beauty ( ULTA) and Match Group ( MTCH).
President Trump's reported threat to add an additional $267 billion in tariffs on Chinese imports hurt stocks today. An early rally seemed to be capped by renewed concern on U.S. inflation. Tesla, trading extremely choppy all year long, tanked more than 6% to hit its lowest level since April 4.
Among true market leaders, Apple ( AAPL) sought to stop a two-day losing skid. Shares edged up less than 0.2% to 223.49 in heavy turnover.
While the stock is poised to fall more than 1.5% for the week, the clear megacap leader holds a big cushion of gains since it cleared a base on base with a 182.40 correct buy point.
Apple has also lifted nicely above its rising 10-week moving average, a sign of strength. The RS (relative strength) line, painted in blue in all IBD charts and on MarketSmith, has hit new highs for the second week in a row. (Please read this Investor's Corner on how the relative strength line can help you determine the right time to sell a leading growth stock.)
The Nasdaq composite frittered away an early 0.5% advance to sink around 0.2%. At 7924, the leading index remains above its rising 50-day moving average and up nearly 15% since Jan. 1.
The S&P 500 slumped 0.3%. Automaker, staffing, book, specialty steel alloy, ship transport and heavy construction stocks paced the downside, all down 1.7% or more. Sellers also hit homebuilders, gaming, U.S. oil exploration and tool stocks hard.
The Dow Jones industrials, hurt by a more than 6-point sell-off in Boeing ( BA), dropped more than 0.5%. Another eight components of the 30-stock Dow industrials lost 1 to 2 points each as the specter of tariffs jumped back on the front burner of issues for equity investors.
Volume was running lower vs. the same time Thursday on the Nasdaq and edging higher on the NYSE.
U.S. payrolls grew by 201,000 in August, beating the Econoday consensus estimate of 195,000. The highest estimate called for a gain of 234,000 jobs. Unemployment held steady at 3.9%.
Inflation Expectations Go Up
"The market-moving data point this morning seems to be the 2.9% year-over-year reading on private sector average hourly earnings — evidence, perhaps, that the sub-4% unemployment rate and hot economy are filtering through into wage pressures," Jeffrey Cleveland, chief economist at the asset management giant Payden Rygel, said in a note to clients. "We expect this trend to persist into next year, with average hourly earnings topping 3% year over year by year end."
Eric Winograd, senior economist at the mutual fund firm AB, noted that the 0.4% month-on-month gain in wages adds credence to the view that an upward trend in wages has been "halting and occasionally bumpy" but is "also well-established."
"The strength of the US labor market in August should eliminate any doubt that the FOMC will raise rates at its meeting next month and increase expectations of further rate hikes in the coming quarters. I continue to expect rate hikes at quarterly intervals through the end of 2019," Winograd added.
Long-dated U.S. Treasury bonds sold off. The yield on the benchmark 10-year note lifted 6 basis points to 2.94%. That's still below the 3% level marked on Aug. 1.
The CME Fed Watch tool now sees a greater than 75% probability that the Federal Reserve's fed funds rate will hit a target level of 2.25%-2.5% in December. The U.S. central bank is widely expected to hike short-term interest rates by a quarter point at the end of its Sept. 25-26 meeting.
Stock Market Leaders Advance
On the upside, Palo Alto Networks ( PANW) powered to new highs and briefly rallied as much as 6% in big turnover.
The data security and firewall giant posted excellent results late Thursday. Earnings in the July-ended fiscal fourth quarter jumped 39% to a record $1.28 a share. Revenue climbed 29% to $658.1 million.
That was the largest quarter for total sales in the company's history, and followed year-over-year top-line gains of 27%, 27%, 28% and 31% in the prior four quarters.
Trucking leader Old Dominion Freight ( ODFL) reversed roughly 0.5% lower after hitting new highs. The IBD 50 stock cleared a 164.20 buy point in an 11-week cup base Thursday in heavy turnover.
Friday's reversal is not necessarily a sell signal, especially given that volume so far is running lower than Thursday. But a 7% to 8% drop below the buy point would trigger a key sell signal to cut losses short.
Staffing Stock Down On Earnings
On the down side, Korn Ferry ( KFY) plunged more than 19% to 51.29 and took out its 200-day moving average. On Wednesday, the stock sharply undercut its 50-day moving average in heavy volume, a key defense-type sell signal. That break of the 50-day line was Korn Ferry's first since the stock retook a 44.18 buy point in an eight-week flat base on March 7.
The executive search firm reported a 44% jump in fiscal first-quarter earnings to 79 cents a share, marking the biggest year-over-year jump in more than four years. Revenue rose 15% to $478.4 million, a touch smaller than gains of 17% and 16% in the prior two quarters.
Please follow Saito-Chung on Twitter at @IBD_DChung for more coverage of growth stocks, breakouts, sell signals, and financial markets.
The stock market rebounded from its morning lows Friday as the major indexes looked to end the week with mixed action. The U.S. economy added 201,000 jobs in August. Wage growth hit a nine-year high, prompting concerns about more Fed rate hikes. Cybersecurity leaders Palo Alto Networks ( PANW) and Okta ( OKTA) both soared after their earnings releases late Thursday. Meanwhile, top retail stock Five Below ( FIVE) surged to new highs amid another big earnings beat. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Nasdaq composite reversed into positive territory with a 0.2% gain after falling as much as 0.6%, while the S&P 500 moved down 0.1%. The Dow Jones industrial average fell 0.2%.
Fellow cybersecurity leader Okta also beat the Street's earnings and sales forecasts, sparking an 18% gain early Friday. Shares broke out above a 61.10 buy point last week. The stock fell below that level Thursday amid the stock's more than 5% drop. The stock is out of buy range.
IBD 50 stock Five Below advanced almost 15% after reporting a surprise Q2 same-store sales gain and better-than-expected earnings and sales results. Shares are up about 69% from a 78.38 flat-base buy point.
Electric automaker Tesla ( TSLA) skidded 7% after the company's Chief Accounting Officer Dave Morton resigned after just one month on the job. Since reaching 387.46 on Aug. 7 on privatization talk, the stock's decline topped 30%. Shares are nearing their multiyear lows set April 2 at 244.59.
IBD 50 Stocks
The IBD 50 was mostly positive in morning trade. Among the top growth stocks, Ulta Beauty ( ULTA) moved up for a sixth straight trading session. Shares rose more than 2% as a recent breakout above a 261.50 flat-base entry gains steam.
Meanwhile, Adobe Systems ( ADBE) moved up 0.5% as the stock battles for support near its 50-day line. Shares are under their 263.93 flat-base entry.
The Dow Jones, S&P 500 index and the Nasdaq composite opened lower but pared loses, turning mixed. The U.S. added more jobs than expected and wage growth hit a nine-year high. Tesla ( TSLA) plunged as its human resources head and new chief accountant left and Chief Executive Elon Musk appeared to smoke marijuana during an interview, adding to questions about Musk's judgment and drug use. Meanwhile, a trio of top stocks — Palo Alto Networks ( PANW), Okta ( OKTA) and Five Below ( FIVE) — signaled gap-ups to record highs after strong earnings.
Dow Jones Today
The Dow Jones fell 0.2% in morning trade. The S&P 500 index slid less than 0.1%. The Nasdaq composite erased losses to turn 0.2% higher. The Nasdaq has fallen for three straight days, including significant losses in the prior two sessions as tech and other growth stocks retreat.
The U.S. added 201,000 jobs in August, with the unemployment rate holding at 3.9%. Average hourly earnings rose 2.9% vs. a year earlier, up from 2.7%. The monthly wage gain was 0.4%.
Economists expected the August jobs report to show a gain of 195,000 jobs, with the jobless rate dipping to 3.8% and average hourly earnings ticking up to a 2.8% gain. The wage figure is key to whether the Federal Reserve will continue its gradual Fed rate hike path.
Elon Musk Smokes Pot; New Chief Accountant Leaves
Elon Musk drank whiskey and appeared to smoke marijuana during an interview on "The Joe Rogan Experience" podcast. As Rogan and Musk both noted, smoking marijuana is "totally legal" in California. But it comes amid growing doubts about Musk's judgment, from his go-private, "funding secured" saga to his continued claims that a Thai cave rescuer is a pedophile. Many of those concerns involve Musk's reported extensive drug use.
"Since I joined Tesla on Aug. 6, the level of public attention placed on the company, as well as the pace within the company, have exceeded my expectations," Morton said in the filing. "As a result, this caused me to reconsider my future."
Meanwhile, Tesla human resources chief Gabrielle Toledano told Bloomberg News that she will not return from a leave of absence. Morton and Toledano are the latest in a long string of high-profile executives to leave this year.
Those executive departures, appeared to worry Wall Street more than Musk smoking pot. Tesla stock fell 7.4% to 260.13 in morning trade in Friday's stock market trading. Shares hit a 5-month low.
Shares have plunged some 15% so far this week. That followed a 6.55% skid last week. Tesla stock is well off the near-record 387.46 set on Aug. 7 following the brief excitement over Musk's tweet in which he claimed to have funding to take the car-maker private.
Tesla stock is fast approaching its April 2018 low of 244.59. Itsrelative strength line, which tracks a stock's performance vs. the S&P 500 index, has fallen to an 18-month low.
Palo Alto stock rose 6% and Okta stock spiked 17%. Palo Alto had closed Thursday in a buy range. Okta stock was just below a buy point after undercutting that key level earlier in the week. Both hit record highs.
Five Below Stock Spikes
The teen- and tween-focused discount retailer sprinted higher. Five Below earnings leapt 50% amid hefty sales growth. Five Below stock shot up 14.5% to a record high.
China Trade War Escalation: Deadline Passes
President Donald Trump can slap tariffs on a further $200 billion in Chinese imports now that a public comment period ended Thursday. But midnight passed with no action so far. The $200 billion would be on top of 25% Trump tariffs on $50 billion worth of Chinese goods. Meanwhile, U.S.-Canada trade talks continue.
Dow Jones futures fell modestly early Friday along with S&P 500 futures and Nasdaq futures, after the Nasdaq composite suffered its third straight loss. Palo Alto Networks ( PANW) and fellow cybersecurity stock Okta ( OKTA) jumped overnight on earnings, with their stocks indicating new highs at the open. So did Five Below ( FIVE). Struggling Apple ( AAPL) iPhone chipmaker Broadcom ( AVGO) also rallied on earnings, good news for a reeling chip sector.
Palo Alto Networks and Five Below are both members of the IBD 50 stock screen. Palo Alto stock and Five Below stock both boast best-possible 99 Composite Ratings. Okta stock, a 2017 IPO that's still not profitable, has a 77 Composite Rating. Broadcom stock has a lowly 37.
During Thursday's session, the Nasdaq composite fell 0.9% after a 1.3% tumble Wednesday. Gloomy comments by KLA-Tencor ( KLAC) and Micron Technology ( MU) slammed chip stocks. Apple and Amazon.com ( AMZN), the world's most valuable companies, fell 1.7% and 1.8%, respectively, but both charts look healthy.
Dow Jones Futures Today
Dow Jones futures slid 0.1% vs. fair value. S&P 500 futures sank 0.15%. Nasdaq 100 futures retreated 0.2%. Keep in mind that Dow Jones futures and other overnight action may not translate into actual trading in the next regular session. Nasdaq futures didn't suggest heavy selling in tech futures the past two sessions.
President Donald Trump could significantly escalate the China trade war. With the public comment period over, the U.S. can impose Trump tariffs on a further $200 billion in Chinese imports, though midnight passed with no action so far. That's on top of 25% Trump tariffs on $50 billion worth of Chinese goods. Beijing has vowed to retaliate. It can't continue to match Trump tariffs dollar for dollar, but also has a number of other non-tariff options to hurt U.S. goods and companies.
On Thursday, Trump hinted that Japan could be his next trade-war target.
This is all coming as the U.S. and Canada continue trade talks. Canada signaled late Thursday that a revised Nafta deal was unlikely this week.
Meanwhile, the Labor Department will release the August employment report at 8:30 a.m. ET. Economists expect a payrolls gain of 195,000, with the jobless rate dipping to 3.8% and the average hourly wage gain ticking up to 2.8%.
Palo Alto Earnings
Palo Alto earnings rose 39% to $1.28 a share, crushing fiscal fourth-quarter views for 92 cents. Revenue ran up 29% to $658.1 million, also topping.
Palo Alto stock shot up 6.55% to 234.80 in the premarket. That would be a new high. Palo Alto stock closed down 0.8% to 220.37 in Thursday's stock market trading, but held above a 219.48 flat-base buy point.
Fellow cybersecurity stock Okta reported a loss of 15 cents a share, flat vs. a year earlier but better than views for a 19-cent loss. Revenue shot up 57% to $94.6 million, also easily beating. Okta stock soared nearly 16% to 69.60 before the open.
In the regular session, Okta rose 0.5% to 60.20, nearly reclaiming a 61.10 buy point after tumbling 5.1% Wednesday in heavy volume.
Five Below Earnings
The teen-and-tween-focused discount retailer reported a 23% sales gain to $347.7 million. Same-store sales rose 2.7%. Five Below earnings leapt 50% to 45 cents a share. The company also raised full-year estimates.
Five Below stock vaulted 11% to 127.99 in the premarket. Shares rose 0.65% to 115.51 in Thursday's session.
Broadcom earnings jumped 24% to $4.98 a share, topping Q3 views by 16 cents. Revenue grew 13% to $5.06 billion, a hair below analyst estimates. The profit and sales gains were the smallest in more than two years. But Broadcom stock rose 5% before Friday's open.
Shares closed down 2.5% to 215.97, hitting resistance at the 50-day line. The communications chipmaker, an Apple iPhone supplier, has struggled since late November. An aborted Qualcomm ( QCOM) takeover bid and a panned CA ( CA) deal have been headwinds. Apple chipmakers have not benefited much from Apple's recent success. Semiconductors fell sharply on Thursday.
The Nasdaq composite was broadly weaker Thursday after a rout in semiconductor stocks added to the week's sell-off in the technology sector.
The Nasdaq lost 0.9% and has been down every day so far this week. The Philadelphia semiconductor index plunged 2.7% after executives from Micron Technology ( MU) and KLA-Tencor ( KLAC) gave cautious statements at an industry conference. Micron skidded to the lowest level since February, and KLA-Tencor fell to a nearly six-week low.
Adding to worries, a Baird analyst cut his price target on Micron to 75 from 100, and a Morgan Stanley analyst warned that memory chip markets have deteriorated.
The S&P 500 fell 0.4% as the index pared losses. Volume rose on the NYSE and fell on the Nasdaq, based on early data. Losers led winners by 12-to-7 on the Nasdaq and by about 7-to-5 on the NYSE.
Dow Again Bucks The Selling
For a second straight day, the Dow Jones industrial average bucked market weakness and posted a modest gain. The Dow climbed 0.1%. Boeing ( BA), whose shares have the largest influence on the index, rose 1.3%.
Dow component Nike ( NKE), embroiled in a controversy over its Colin Kaepernick commercial, rose 0.6%. Nike Shares are testing support at the 10-week moving average, attempting a rebound. But the stock remains below the 81.10 buy point of an Aug. 9 breakout to new highs.
IBD's chip equipment industry group was near the bottom of 197 groups, down 6%. Chipmakers fell 1.7% and chip designers 1.2%. Contract electronics manufacturers, an industry with ties to the chip sector, fell 1.5%.
The energy sector also tumbled as crude oil prices slid 78 cents to $67.94 a barrel. Oil inventories fell more than expected last week, but gasoline inventories rose. Drilling, exploration & production, oil machinery, and oilfield services were groups down more than 2% Thursday.
Investors will be watching a key economic report Friday morning, when the Labor Dept. announces the jobs report for August. Economists expect nonfarm payrolls to rise by 195,000 while the jobless rate is forecast to fall from 3.9% to 3.8%.
It was like deja vu Thursday afternoon in the stock market as the Dow Jones industrial average held a small gain while the tech-heavy Nasdaq fell sharply.
The Nasdaq composite sank 0.8%, the S&P 500 shed 0.2% and the small-cap Russell 2000 skidded 0.7%. But the Dow was 0.3% higher. Volume ran slightly higher on the NYSE and lower on the Nasdaq compared with the same time Wednesday.
Boeing ( BA) led blue chips in the stock market today with a 1.6% gain as it continues to consolidate. The stock has been building a flat base with a potential 374.58 buy point. Among other Dow stocks, Home Depot ( HD) and Visa ( V) each advanced more than 1%.
But Chevron ( CVX) and Apple ( AAPL) weighed with respective declines of nearly 3% and 2%. Chevron stock tumbled close to a five-month low. West Texas intermediate crude oil prices slid 1.2% to $67.88 a barrel. Exxon Mobil ( XOM) gave up 0.9%.
Apple stock was poised to fall for a second straight session after snapping its win streak Wednesday. Shares are about 15% above a 194.30 flat-base buy point cleared Aug. 1. They had risen as much as 18% from the entry to the Wednesday high. Volume was about 35% higher than usual. Analysts remain bullish ahead of Apple's Sept. 12 presentation, when it's expected to unveil its new iPhones. Bank of America on Thursday reiterated its buy rating, saying that the new iPhones will likely carry a higher price tag than Street expectations.
Chip equipment makers, casino stocks and internet retailers led the downside among IBD's 197 industry groups. Truckers, aerospace/defense and restaurants were among the gainers.
The biggest loser among chip gear stocks was KLA-Tencor ( KLAC), which plunged 10% to breach its 50-day and 200-day moving average lines. The chip equipment maker's cautious statements at the Citi Global Technology Conference reportedly spooked investors.
Amazon Slips Again
In the internet retail space, Etsy ( ETSY) and Alibaba Group ( BABA) fell 3% each, while Amazon.com ( AMZN) gave up 2%. Amazon halted a seven-session win streak on Wednesday, shedding 2% as the tech-heavy Nasdaq sold off. Thursday looked like more of the same. Amazon is 4% off its high.
On the upside, Old Dominion Freight Line ( ODFL) drove 3% higher, clearing a 164.20 buy point of a three-month cup base. The Thomasville, N.C.-based company, which also carries a 94 Composite Rating, is featured in Thursday's IBD 50 Stocks To Watch column. The stock joined the IBD 50 on Wednesday.
Fellow trucker Landstar System ( LSTR), based in Jacksonville, Fla., rose nearly 3% to a record high. On Wednesday, shares cleared a 118.70 buy point of a long base. Also that day, its Relative Price Strength Rating jumped to 76 from 67, which indicates the stock's price performance is beating 76% of all other stocks. On Thursday, Landstar's RS Rating was at 79.
Texas Roadhouse ( TXRH) rose 3%, clearing a 70.96 flat-base buy point en route to a new high. Shares first crossed above the buy point Wednesday but closed below the entry. The stock tumbled below its 50-day moving average on Aug. 31, after the restaurant operator's Q2 results missed views. But it's come back since, and is on track to extend its advance for a seventh straight session.
Semiconductor equipment, gaming, data storage, biotech and fiber-optic shares helped push the Nasdaq composite down more than 1% as tech issues led the decline in stocks today. Other Nasdaq-listed market leaders, including Apple, also continued to catch their breath after an unusually strong month in August.
A good example of a Nasdaq top name stumbling so far in September: Etsy ( ETSY). The online arts-and-crafts marketplace slipped 2% to extend its weekly loss to nearly 5%. Yet the IBD Leaderboard stock remains above a proper buy point of 45.98.
Shares in Etsy, valued at $5.6 billion, are also trading well above the upward-sloping 50-day moving average. At 46.29, the stock is up 126% since Jan. 1.
At around 2:30 p.m. ET, the Nasdaq composite, up 5.7% last month, fell 1% on Thursday in volume that was running sharply lower vs. the same time on Wednesday. The S&P 500 eased 0.4% following a more than 3% lift in August. The Dow Jones industrial average, boosted by big gains in 2017 market leader Boeing ( BA), traded slightly higher.
NYSE turnover is also running lower vs. the same time Wednesday.
Boeing ( BA), the aerospace giant, continues to work on a new base.
Notice how the aerospace giant has been bobbing and weaving above and below its 50-day moving average, which itself has flatlined for months.
Yet on the positive side, Boeing ended a recent three-week pullback with buying support at the 200-day moving average (see it in black on a MarketSmith chart). At 352, shares traded less than 6% below an all-time peak of 374.48.
Earnings have been growing sharply the past three quarters as revenue is rising again. Analysts polled by Thomson Reuters see Boeing's profit rising a stout 35% to $3.66 a share in the third quarter on a 2% lift in revenue to $24.87 billion.
The market remains in a confirmed uptrend, despite a fifth distribution day notched by the Nasdaq on Wednesday. For more details on what distribution days mean for the general market, please read this IBD Big Picture column.
Apple Stock Today
Apple ( AAPL) contributed to the Nasdaq's underperformance, sinking nearly 1.5% and at one point reaching a session low of 221.30.
Yet even at the intraday low, the iPhone, wearables and digital services giant remains a true megacap leader, keeping gains of 23% since its May 4 breakout past a good double-bottom base at 179.04.
A new holder in Apple shares could consider selling at least some shares given that the profit from the 179.04 breakout has now hit the 20%-25% zone.
Those with bigger gains can obviously hold as well. Apple continues to ride on the north side of its 50- and 200-day moving averages.
Plus, the fundamentals continue to look bright for Apple. The Street expects fiscal fourth-quarter profit to rise 33% to $2.76 a share. That would stretch a streak of double-digit EPS growth to seven quarters.
Sellers Smother Chip Equipment Firms
Elsewhere, KLA-Tencor ( KLAC) led a sell-off in chip gear names following a dour outlook. KLA slid 9% to 107.63, poking below its 50- and 200-day moving averages in heavy trade.
Notice on a daily chart how a July 31 breakout past a 118.66 buy point did not go far. The base, a cup without handle, showed a relatively mild correction from head to toe. However, semiconductor equipment firms have generally lagged the market since November last year.
Strong industry group performance is a vital component of top-performing growth stocks.
Through Wednesday's close, IBD's Electronics-Semiconductor Equipment industry group ranked a poor 157th out of 197 industry groups for six-month relative performance.
Gaming Stocks Keep Losing
In IBD's Leisure-Gaming/Equipment group, Wynn Resorts ( WYNN) paced a 2.8% drop for the group. Wynn fell more than 8% in volume running more than double its usual level. At 128.54, the stock has now sunk 37% below the 52-week high.
Wynn broke out of a cup with handle at 194.76 on May 9, but volume that day increased only 15% above average. The next day, volume declined and was virtually flat vs. the 50-day average. That price-and-volume action reflected limp institutional demand for shares.
The former big stock market winner soon slammed beneath its 50-day moving average in heavy volume, a key sell signal.
On June 5, Wynn also dropped 8% below the proper buy point of 194.76, forcing recent buyers to cut losses. That's known as the golden rule of investing.
Other Top Stocks To Watch
IBD 50 play Old Dominion Freight ( ODFL) cleared a 164.20 proper buy point in a cup base. Shares coasted more than 3% to as high as 165.67, good for a new all-time high.
The Nasdaq-listed less-than-truckload carrier is highlighted in a new IBD 50 Stocks To Watch column published earlier Thursday.
After the close, watch for fiscal Q4 results from longtime market leader Palo Alto Networks ( PANW). The stock broke out of a huge saucer with handle at 156.95 in the final two weeks of January this year and has never looked back since.
Shares have fallen more than 5%, however, so far this week and are close to a fresh test of support at the 10-week moving average.
The data network security giant is expected to grow earnings in the July-ended fourth quarter 27% to $1.17 a share on a 24% pickup in sales to $633.1 million. Both numbers would mark new quarterly records.
In other financial markets, WTI crude oil futures dropped 1.2% to $67.91 a barrel. That marked a third straight sharp decline. Investors scooped up long-dated U.S. government bonds as the yield on the benchmark 10-year note sank to 2.87%. That's down from 3% on Aug. 1.
On Thursday, the Labor Department reported a drop in weekly U.S. initial jobless claims to 203,000 for the week ended Sept. 1, marking the lowest level since December 1969.
Please follow Saito-Chung on Twitter at @IBD_DChung for more commentary and analysis on growth stocks, breakouts, sell signals, and financial markets.
Blue chips held the smallest losses midday Thursday. Apart from the Dow's small dent, the indexes were well into the red.
The Dow Jones industrial average lost less than 0.1% at almost noontime in New York, but the Nasdaq and the S&P 500 lost 0.9% and 0.4%, respectively. Small caps in the S&P 600 fell 0.4%.
Volume fell on both major exchanges, easing part of the day's sting. A down day in rising volume points to institutional selling. Slow turnover is less alarming.
In the IBD 50, a proxy for leading stocks, restaurant chain Wingstop ( WING) popped about 2.5%. Volume was about 10% above average.
Other gainers among highly rated stocks included business software provider ServiceNow ( NOW), up 1.5% in volume 50% greater than usual; pop culture products distributor Funko ( FNKO), up 3% in fast trade; and upscale apparel designer Michael Kors ( KORS), up 1.5% in average volume.
Among the FANG stocks — Facebook ( FB), Amazon.com ( AMZN), Netflix ( NFLX) and Alphabet ( GOOGL) — only Netflix posted a gain. The stock advanced 4% in the first half hour of trade and then reversed to a 1% gain.
Apple ( AAPL), which sometimes is thrown in with the FANG stocks, dropped about 1.7% midday Thursday in twice its usual volume. The FANG stocks' three-year earnings growth rates are 106% for Facebook; 99% for Amazon; 93% for Netflix; and 26% for Alphabet. Apple's three year growth rate is 5%.
Day's Leaders And Losers
Among IBD's 197 industry groups, the day's top gainers included jewelry, department stores and gold miners. The leading losers were chip equipment makers, internet, data storage and home furnishings.
(For updates on this story and other market coverage, check IBD's stock market news today.)
The stock market was mixed early Thursday as the tech-heavy Nasdaq threatened to extend its losing streak to three trading sessions. The Nasdaq was again the laggard in early morning trade. Ollie's Bargain Outlet ( OLLI) dipped after Wednesday's earnings release, while cybersecurity leaders Palo Alto Networks ( PANW) and Okta ( OKTA) will report after the stock market close. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Nasdaq composite fell 0.4%, while the S&P 500 dropped about 0.1%. The Dow Jones industrial average moved up 0.2%.
Among the Dow stocks, Apple ( AAPL) fell for a second straight day, following up Wednesday's 0.7% fall with another 0.6% decline.
After the stock market close, IBD 50 stock Palo Alto Networks will report its fiscal Q4 results. Analysts expect the company to earn $1.17 per share on revenue of $632 million. Shares are back in buy range above a flat base's 219.48 buy point, according to MarketSmith chart analysis.
Meanwhile, Okta is trading below a 61.10 entry ahead of its earnings results after the close. Consensus estimates show the company losing 20 cents per share on revenue of $85 million.
IBD 50 Stocks
Among the top growth stocks, FANG stock Netflix ( NFLX) looked to recover a portion of Wednesday's more than 6% fall, rising about 2% in early trade. Shares found resistance at their 50-day moving average line.
On the downside, Alarm.com ( ALRM) plunged 10% after hitting a new high Wednesday. Meanwhile, Brooks Automation ( BRKS) declined 4% but remains above a double bottom's 35.68 entry.
Major stock indexes opened slightly higher in the stock market today. The bulls were hoping for a stronger open after the Nasdaq composite slumped 1.2% Wednesday in higher volume.
FANG stock Netflix ( NFLX) rebounded 2.5% early Thursday after slumping 6% Wednesday in fast turnover. RBC Capital raised its price target to 440 from 360, according to CNBC. Meanwhile, shares of Tesla ( TSLA) were up 1.5% after Chief Executive Elon Musk cited favorable August sales data from InsideEVs.
The Dow Jones industrial average was up 0.2%, while the S&P 500 and Nasdaq were mostly unchanged.
Early Thursday, earnings reports from Guidewire ( GWRE), DocuSign ( DOCU) and Zscaler ( ZS) were in focus. All three traded lower despite better-than-expected earnings.
In economic news, ADP private payrolls increased 163,000 in August, a little below the consensus estimate of 182,000. On Friday, forecasters expect nonfarm payrolls to increase 195,000, with the unemployment rate ticking lower to 3.8%.
Stock Market Today: Cisco, Merck Lead Dow
In stock market results today, Merck ( MRK) and Cisco Systems ( CSCO) were early leaders in the Dow, up around 1% each. Both are trading tightly near highs after recent breakouts.
Bitcoin Slumps Again
Bitcoin futures extended losses after Wednesday's drubbing. The sell-off came on news Goldman Sachs is abandoning plans for a cryptocurrency trading desk. Bitcoin futures were down another 4% early Thursday.
After the close, watch for earnings from Broadcom ( AVGO), Five Below ( FIVE) and Palo Alto Networks ( PANW).
Five Below exited the Leaders list Wednesday. It was a big winner on Leaderboard after being added as an earnings option play just ahead of its June 6 earnings report.
Dow Jones futures fell slightly Thursday morning, along with S&P 500 futures and Nasdaq futures. On Wednesday, growth stocks sold off sharply. Eleven IBD 50 stocks, from Adobe Systems ( ADBE) to World Wide Entertainment ( WWE), fell below buy points. Several other top stocks or former leaders suffered heavy losses. Workday ( WDAY) and RH ( RH) plunged after earnings reports. Netflix ( NFLX) tumbled from a key resistance level. And Facebook ( FB) and Tesla ( TSLA) are at their weakest point relative to the S&P 500 index in more than a year.
The selling continued late. Guidewire Software ( GWRE) and hot IPOs DocuSign ( DOCU) and Zscaler ( ZS) all fell in extended trading even though they toppedearnings views. Guidewire stock and DocuSign stock had closed Wednesday slightly above buy points. Zscaler stock had finished just 1 cent below its entry point.
Wednesday's action before and after the close teach five valuable lessons for investors:
1. Even Top Stocks Follow The Stock Market
Don't think your stock will be immune to a market slide. Most stocks follow the market. Growth stocks tend to outpace the market's gains, but also its losses. Sure, a few standouts like Apple ( AAPL) will barely budge in a broad sell-off, but the odds aren't in your favor.
Don't read too much into Wednesday's slide. The S&P 500 index and Nasdaq composite are just below record highs, with the Dow Jones not far behind. The stock market remains in a confirmed uptrend.
2. Be Afraid When Stock Market Fear Disappears
Several indicators in recent weeks have signaled that investors were becoming complacent, with bullishness reaching unusually high levels. That's often a sign of at least a short-term peak. If everyone is bullish, who's left to buy?
3. Buying Before Earnings Is Risky
Sure, if you'd bought Apple stock just ahead of its July 31 earnings, you'd be sitting on a tidy gain. But there's a high risk for that potential reward. RH stock plunged 13% following its late-Tuesday earnings. That's after a sharp reversal from a brief breakout attempt Tuesday morning.
If you do want to buy a stock heading into quarterly results, consider an earnings options strategy to take advantage of any gains while limiting your downside risk.
4. Relative Strength Absolutely Matters
As an investor, you don't want to buy a stock that just moves along with the broader market averages. You might as well buy a mutual fund or ETF for the S&P 500 or some other broad market gauge.
Therelative strength line, which tracks a stock's performance vs. the S&P 500 index, is a good way to identify true leaders and laggards. A rising RS line means a stock is outpacing the market. A falling RS line marks a laggard.
Apple stock's RS line, after a long stretch of sideways action, has boomed since the July 31 earnings report.
Meanwhile, Facebook stock fell 2.3% to a four-month closing low. Tesla stock sank 2.8% to its worst levels since late May. On a weekly chart, the Facebook and Tesla RS lines are at their lowest levels in more than a year.
5. Stock Market Futures, Overnight Action Doesn't Always Carry Over
It's not a good sign when a stock sells off in late trading. Workday and RH stock fell sharply late Tuesday and that carried over into Wednesday.
But HealthEquity ( HQY) rallied after signaling significant losses overnight. Dow Jones futures and Nasdaq futures indicated slim losses heading into Wednesday's session, giving no indication of big, broad losses in growth stocks.
Dow Jones Futures Today
Dow Jones futures were a fraction below fair value. S&P 500 futures fell 0.1%. Nasdaq 100 futures lost 0.1%.
U.S.-Canada trade talks continue, while President Donald Trump is poised to impose tariffs on an additional $200 billion worth of Chinese imports later this week.
A sell-off in the technology sector gashed the Nasdaq composite Wednesday, while the Dow Jones industrial average managed a small gain.
The Dow edged up 0.1% after industrials Caterpillar ( CAT) and 3M ( MMM) rose more than 1%. Consumer companies Walmart ( WMT), Verizon ( VZ), Coca-Cola ( KO), Johnson & Johnson ( JNJ) and Walgreens Boots Alliance ( WBA) also rose more than 1%. Verizon climbed from support at the 10-week moving average.
The Nasdaq stumbled 1.2% as sellers took aim at technology leaders. The Nasdaq closed below the 8000 level, a week and a half after the index topped that milestone.
Nasdaq flagship companies were no refuge. Amazon.com ( AMZN) and Facebook ( FB) fell more than 2%, Netflix ( NFLX) slid more than 6% and Microsoft ( MSFT) lost nearly 3%.
Software and semiconductor shares were among the weakest techs. Solar and biotechs — two other sectors with big weightings in the Nasdaq — also were broadly lower.
The S&P 500 fell 0.3%. Volume climbed on the Nasdaq and fell on the NYSE, according to early data. Decliners led advancers by 12-to-7 on the Nasdaq and by 5-4 on the NYSE.
The selling in technology spread to the IBD 50, where the largest losses were concentrated in internet and software companies.
PRA Health Sciences ( PRAH) edged past the 108.12 buy point of a flat base. But the medical research services provider closed below the entry in mediocre volume.
In one of the few bright spots Wednesday, Vera Bradley ( VRA) leapt 15% after earnings beat views and the company's outlook was optimistic. The handbags and accessories company climbed back above the 15.55 buy point of a cup with handle initially cleared Aug. 20.
The stock market was barely mixed Wednesday afternoon as the Dow Jones industrial average clung to a slim gain and the Nasdaq composite lost more than 1%.
The Dow was slightly positive as 1%-plus gains from blue chips including Caterpillar ( CAT), 3M ( MMM) and Johnson & Johnson ( JNJ) helped offset Visa ( V) and Microsoft's ( MSFT) 3% and 2% respective losses. Tech heavyweights Apple ( AAPL), Cisco ( CSCO) and Intel ( INTC) were also lower.
The Nasdaq skidded 1.2% amid broad weakness in tech stocks. Amazon ( AMZN) slipped 2%, one day after reaching $1 trillion in market cap. It became only the second U.S. company to reach that threshold, behind Apple. Apple was down 0.4% to trade in the middle of its intraday range, which started positive before falling into the red.
The S&P 500 gave up 0.3% and the small-cap Russell 2000 shed 0.4% in the stock market today. Volume was running slightly lower on the NYSE and higher on the Nasdaq vs. the same time Tuesday.
Home furnishings retailers, software and automakers led the downside among IBD's industry groups. RH ( RH) plunged 13% and sliced its 50-day moving average after its earnings beat views but sales missed. The home furnishings chain formerly known as Restoration Hardware also posted disappointing same-store sales. Shares fell to the bottom of a cup base it had been building since mid-June.
In the software industry, leading stock Workday ( WDAY) sank 7% despite beating Q2 forecasts late Tuesday. Shares remain slightly extended from a 137.53 buy point of a cup with handle base cleared early last month.
Among automakers, Tesla ( TSLA) weighed with a 3% slide. The stock was on track to extend its losing streak to seven days and was trading at a three-month low. A Utah driver sued Tesla Tuesday, alleging her Model S autopilot mode failed to work when her car crashed into a stopped firetruck. Also Tuesday, Mercedes-Benz unveiled its electric SUV.
Several defensive industry groups bucked the decline, including soap makers, utilities and food-related stocks.
Top growth stocks cooled off, crude oil fell more than 1% and the Nasdaq looked set to give back a decent chunk of last month's oversize gain. Leaders in the retail, health care and transport sectors — namely Apple ( AAPL), Union Pacific ( UNP), HealthEquity ( HQY), Alarm.com ( ALRM) and Ollie's Bargain Outlet ( OLLI) — bucked the drop in the stock market today.
Apple, meanwhile, recouped much of the day's losses. The iPhone, iMac and digital services titan surrendered just 0.2% following a five-week sprint run that started with a mild test of the 50-day moving average and sent shares up 20%.
The leading megacap tech, trading near 227.94, remains up 34% since Jan. 1. IBD's Stock Market Today column covered Apple frequently as it set up and eventually broke out of a first-stage bottoming base with a 118.12 correct buy point back on Jan. 6, 2017.
At around 2:45 p.m. ET, The Nasdaq composite slumped 1%, after falling as much as 1.6% in the early going. The leading index is trying to test a potential floor of support at the 8000 round number. At 8008, the tech-heavy index is up 16% since Jan. 1 and rose 5.7% in August.
The S&P 500 also cut losses, going from a 0.7% morning sell-off to a roughly 0.3% decline. Among IBD's 197 industry groups, nine of the 10 worst performers hailed from the computer and software sectors. (The daily changes are updated after the market close.) Education and media software firms dropped 3.5%; computer networking, desktop software, gaming software and database stocks slipped 2.8% to 3.3%.
The Dow Jones industrial average rose nearly 0.2%, boosted in part by gains of 1 to 2 points by the likes of Caterpillar ( CAT), 3M ( MMM), Johnson & Johnson ( JNJ) and McDonald's ( MCD), fought to scrape a small gain. 3M is deep in the middle of a new base. JNJ and McDonald's are also forming what so far look to be the saucer base pattern.
In August, the 30-stock Dow industrials trailed the other key indexes, rising nearly 2.2% that month.
Retail Stock Leader Reports After The Close
A few retailers showed terrific resilience.
Ollie's Bargain Outlet looked set to stage its 14th gain in a row, at one point rising more than 1% to as high as 88.90. Volume is running sharply above typical levels. It ranks No. 3 for its 97 Earnings Per Share Rating within the discount and variety retail industry group, according to IBD Stock Checkup. A 97 rank means the company has superior profit growth in both recent quarters and in the past three to five years than 97% of all companies in the Investor's Business Daily database.
The deep-discount outlet, specializing in high-quality closeout merchandise, reports fiscal second-quarter results after the close. Analysts see earnings popping up 33% to 36 cents a share on a 12% increase in sales to $284.7 million. The highest sales forecast among the 11 analysts surveyed by Thomson Reuters is $291.1 million, up 14%.
Ollie's grew earnings in the past four quarters by 29%, 29%, 31% and 64% vs. year-ago levels.
Other Growth Stocks Showing Strength
Other leading stocks faring well Wednesday include railroad Union Pacific, health savings account expert HealthEquity, and home security software and systems provider Alarm.com. All three stocks rose more than 1% in fast turnover.
HealthEquity reported strong Q2 results as earnings jumped 62% to 34 cents a share, in a 25% rise in revenue to $71.1 million — the biggest total sales for any quarter.
In IBD Leaderboard, Etsy ( ETSY) sank more than 5% but bounced off its session low of 46.43. Clearly, the online marketplace for artists and artisans has been feeling selling heat near 50. But the stock remains in a fierce uptrend and has moved up nicely since testing the 50-day moving average near 39 in late July.
Autodesk ( ADSK), a relatively new Leaderboard stock, slumped nearly 2% to 150.63 in flat trading. The industrial design software firm for manufacturing companies staged a strong breakaway gap on Aug. 24 following a robust quarterly report. Shares remain slightly more than 5% past a 143.04 conventional buy point in an eight-week flat base.
However, Autodesk presented an alternate entry point with the breakaway gap. Given the sharpness of the move and the ongoing turnaround in results, one could have bought shares at the Aug. 24 open of 152.39.
Growth Stocks Hit Hard
High-end indoor and outdoor furnishings chain RH ( RH) dropped sharply for a second straight session. The stock fell 12% to 133.06 and slid sharply below the key 50-day moving average for the first time since it cleared a long and deep double-bottom base with a 105.56 buy point on June 5. Volume is running more than six times usual levels. The big drop in heavy volume is sparking a key defensive sell rule.
Late on Tuesday, RH reported excellent earnings for the July-ended fiscal second quarter, up 283% to $2.49 a share. Sales rose 4% to $640.8 million as net margin more than tripled to 10.5%.
RH had formed an 11-week cup base that showed a mild correction of 22% from head to toe. The proper buy point was 164.59, but the stock hadn't yet surpassed that proper entry. On a daily chart, RH appeared to have formed a thin six-day handle that provided a 161.49 entry. However, buying a stock right before quarterly results carries higher risk.
Tuesday's reversal was negative as the stock briefly eclipsed the narrow handle buy point, but then quickly turned tail. RH finished the day down 4.9% and volume zoomed more than five times its 50-day average. On Wednesday, the stock fell more than 8% below the aggressive buy point of 161.49, triggering the golden rule of investing.
The Innovator IBD 50 ( FFTY) ETF fell 2.7%, giving back nearly two weeks' worth of gains. At 37.32, the exchange-traded fund remains up 12.3% year to date after rallying 34% in 2017.
Please follow Saito-Chung on Twitter at @IBD_DChung for more analysis of growth stocks, breakouts, sell signals, and financial markets.
U.S. stock indexes staggered toward the Nasdaq's biggest loss in three weeks in the stock market today, as investors waited for signs of movement in U.S. trade talks with Canada.
The Nasdaq skidded 1.2% on Wednesday, while the S&P 500 dropped 0.4%. Among the 30 stocks in the Dow Jones industrial average, gainers held a slim advantage vs. losers as the Dow industrials traded just above flat. Small caps struggled too as the S&P 600 retreated 0.4%.
Tariffs this year have saddled the stock market with burns here and there, but the temperature has varied from a low simmer to a rolling boil. Canada has moved to the front burner while Mexico and China have moved to the back burner.
The Innovator IBD 50 Fund ( FFTY) slammed about 4% lower in heavy volume Wednesday. The exchange traded fund, though, is holding above its 50-day line.
Allison is extended, but its base count is still low. As a stock rises, it pauses to consolidate. Breakouts from the first two consolidations are more likely to work than those from later bases. So that could work in Allison's favor.
The Street expects Allison to deliver earnings growth of 91% in 2018.
Among the FANG stocks, Facebook ( FB) lost about 1.5% in strong volume, Amazon.com ( AMZN) shed 2% in fast trade, Netflix ( NFLX) dropped 5% in busy turnover, and Alphabet ( GOOGL) fell 2% in heavy volume.
Other Stocks Falling
Apple ( AAPL) sagged 1% in twice its average volume. Apple is poised to end a nine-session win streak. In four of the nine sessions, volume was above average, a bullish sign.
Recent winners Lululemon Athletica ( LULU) and Ulta Beauty ( ULTA) dropped 2.5% and 1%, respectively.
Among IBD's 197 industry groups, the market-leading software stocks were taking hard hits. On the upside, confectionery food and gas utilities led.
The stock market was lower Wednesday, as the major indexes looked to extend recent losing streaks. The tech-heavy Nasdaq was the laggard in early morning trade. Leaderboard stock Workday ( WDAY) stumbled after its Q2 results late Tuesday, while top retail stock Ollie's Bargain Outlet ( OLLI) will report after the stock market close. (For updates on this story and other market coverage, visit the Stock Market Today.)
The Nasdaq composite fell over 1%, while the S&P 500 dropped about 0.4%. The Dow Jones industrial average eased lower.
Among the Dow stocks, iPhonemaker Apple ( AAPL) threatened to snap its win streak with a 1% fall. Shares hit a new high in morning trade before turning red. Shares were initially boosted after D.A. Davidson raised its price target from 230 to 265. The stock is approaching the 20% to 25% profit-taking level from a flat base's 194.30 buy point.
Among companies reporting earnings, top software stock Workday announced Q2 results that topped analyst targets, but shares fell about 7% in early trade. The stock is now about 6% from a cup with handle's 137.53 buy point after a breakout in early August.
HD Supply ( HDS) reversed lower after reporting better-than-expected Q2 results early Wednesday, falling over 2%. The industrial distributor is extended above a large cup with handle's 40.62 buy point, according to MarketSmith chart analysis.
After the stock market close, Ollie's Bargain Outlet will announce its quarterly results. Analysts expect EPS of 37 cents on revenue of $285 million. Ollie's stock is extended beyond a 77.60 flat-base entry amid the stock's 13 trading-session win streak. The flat base is a later-stage base formation.
Hot IPO stock Spotify ( SPOT) is trading about 8% away from a potential buy point Wednesday amid the stock's roughly 3% fall. Shares are vying for support at their 50-day moving average line. The music streaming platform found support at that level on two previous occasions since the stock's April 3 debut.
F5 Networks ( FFIV) reversed lower, falling 0.5% after Credit Suisse maintained its outperform rating, while raising its price target from 188 to 216. The new price target is a 13% premium to Tuesday's closing stock price. The stock is trying to move beyond the 5% buy range of a flat base's 183.37 buy point.
IBD 50 Stocks
Among the top growth stocks, PRA Health Sciences ( PRAH) is attempting to break out past a 108.12 flat-base entry. Shares moved up about 1% in the face of the early market decline. The stock's relative strength line is nearing a new high — a bullish technical metric.
On the downside, Grubhub ( GRUB) declined about 5%. The food delivery service hit a new high Tuesday.
The Nasdaq composite took a hit early Wednesday in the stock market today as earnings reports from top growth stocks RH ( RH), HealthEquity ( HQY), Workday ( WDAY) and Coupa Software ( COUP) were on Wall Street's radar.
The Nasdaq slumped 0.6% in early trading; the S&P 500 slipped 0.2% and the Dow Jones industrial average was mostly unchanged.
Early laggards in the Nasdaq 100 included JD.com ( JD), Workday, NetEase ( NTES) and MercadoLibre ( MELI).
Marijuana Stocks Up Again
Pot stocks were in favor just after the opening bell Wednesday despite negative comments recently from short seller Citron Research. Cronos ( CRON) soared 12%; Tilray ( TLRY) jumped 7% and Canopy Growth ( CGC) added 4%.
Stock Market Today: Facebook, Twitter In Focus
Facebook ( FB) Chief Operating Officer Sheryl Sandberg and Twitter ( TWTR) Chief Executive Jack Dorsey are scheduled to appear before a Senate panel Wednesday to defend their response to Russian interference in U.S. elections. Facebook stock was down 0.6% in early trading. Twitter shed 0.9%.
Mixed Bag Of Earnings
Shares of enterprise software name Workday gave back 3% in early trading despite a strong earnings report that showed bottom-line growth of 29% and top-line growth of 28%. Through Tuesday, Workday rose 19 times in 21 trading sessions. Some consolidation should be expected from here.
But another enterprise software stock went the other way on earnings. Coupa Software soared 14% after the company reported an unexpected profit. Sales growth accelerated from the prior quarter, rising 38% to $61.6 million.
RH, formerly known as Restoration Hardware, slumped nearly 7% despite a big earnings beat. Wall Street focused instead on a sales miss and weaker-than-expected same-store sales.
IBD Sector Leader HealthEquity added 1% after the heath savings account custodian reported adjusted earnings per share of 34 cents, nicely above the consensus estimate of 28 cents.
Dow Jones futures fell modestly early Wednesday, along with S&P 500 futures and Nasdaq futures. Emerging markets led a global slide, with U.S.-Canada Nafta talks set to resume. Facebook ( FB) and Twitter ( TWTR) executives testify on Capitol Hill regarding foreign disinformation efforts. And top stocks Workday ( WDAY), RH ( RH), HealthEquity ( HQY) and Coupa ( COUP) were active after reporting earnings late Tuesday.
Workday stock boasts an IBD Composite Rating of 96 out of 99. HealthEquity stock has a 98 Composite Rating. RH stock is at 93, while Coupa stock is at 90.
Dow Jones Futures Today
Dow Jones futures fell 0.25% vs. fair value, but off overnight lows. S&P 500 futures lost 0.2%. Nasdaq 100 futures sank 0.1%. From Asia to Europe, global markets sold off, with Hong Kong's Hang Seng down 2.6%. Emerging markets suffered steep stock and currency losses once again.
Keep in mind that overnight action, from Dow Jones futures to individual names such as RH stock or Workday stock, can show big moves. But that often doesn't translate into actual trading in the next regular session.
On Tuesday, the Dow Jones fell a fraction while the S&P 500 index and Nasdaq composite lost 0.2%, all closing well off session lows.
Trump Trade War Fears As Canada Talks, China Tariffs Loom
The U.S. and Canada resume trade talks on revising Nafta. Canada Prime Minister Justin Trudeau stressed that he wasn't willing to bend on key issues. That came after President Donald Trump tweeted that he was ready to leave Canada out of a new U.S.-Mexico trade pact. Later this week, the Trump trade war vs. China could escalate with the U.S. imposing tariffs on a further $200 billion in Chinese imports.
Global markets retreated Wednesday, with emerging markets under pressure once again.
Social Giants On Capitol Hill
Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey will defend their response to Russian interference before a Senate panel Wednesday. Dorsey also goes before a House committee in the afternoon. Google parent Alphabet ( GOOGL) did not send a high-enough executive to satisfy the Senate committee. The hearings come as Trump accuses Google of "rigged" search for conservatives and calls for regulating big internet giants build.
Facebook stock fell 0.5% early Wednesday. Shares are approaching their late July lows. Facebook's relative strength line, which tracks a stock's performance vs. the S&P 500 index, is already at 18-month lows on a weekly chart.
Twitter stock dipped 0.5%. Google stock was not yet active.
Workday earnings rose 29% to 31 cents while revenue grew 28% to $671.7 million. Both comfortably topped views. The human capital management and financial software maker gave bullish Q3 subscription targets.
But Workday stock fell 2.4% early Wednesday. Shares advanced 1.4% to 156.69 on Tuesday, hitting a record high intraday. That was the seventh straight gain for Workday stock and 19th of the past 21.
RH earnings of $2.49 a share crushed views for $1.74. But the upscale home furnishings retailer formerly known as Restoration Hardware fell short on revenue and same-store sales. RH said it continues to "prioritize earnings over revenue growth" as it raised full-year EPS views but pared revenue targets.
RH stock sank 5.1% in premarket trade. On Tuesday, RH stock briefly edged past a 161.49 cup-with-handle buy point but reversed to close down 4.9% at 151.28.
Buying a stock just ahead of earnings is risky, with the potential for big gains or losses. If you're going to buy ahead of quarterly results, consider this earnings options strategy to take advantage of potential gains but minimize any losses.
Coupa Software Earnings
Coupa Software earnings came in at 5 cents a share, defying views for a 9-cent loss. It may not have been a complete surprise. The business software maker beat EPS estimates by at least 6 cents in the prior six Coupa earnings reports, including a 10-cent beat in Q1 and 17 cents in Q4 2017.
Revenue grew 38.5% to $61.7 million.
Coupa Software gave bullish guidance and announced it's bought the tech assets of software company DCR Workforce for an undisclosed amount.
Coupa stock shot up 15% in early trade Wednesday. Shares rose 0.4% to 72 on Tuesday. That was a record close and just below last week's intraday best of 72.36.
HealthEquity earnings per share hit 34 cents a share, comfortably topping estimates for 28 cents. Revenue for the health savings account specialist came in $71.1 million. Assets under custody rose 31% to $7 billion. HealthEquity raised its full-year EPS target by about 5 cents, but that's after topping Q2 views by 6 cents.
HealthEquity stock fell 5.8% late after initially rising modestly. Shares rose 0.3% to 94.47 on Tuesday, hitting a fresh high intraday.
Growth stocks continued to show healthy demand following the Labor Day extended weekend, and Wall Street demonstrated renewed demand for stocks today, particularly in the retail, consumer and tech sectors. Apple nicked a new all-time high while Amazon.com joined the iPhone and digital services giant in the $1 trillion club in terms of market value.
U.S. Treasury bonds on the long end fell, pushing the yield on the benchmark 10-year note up 4 basis points to 2.9%. Gold sank 0.7%, while WTI crude oil futures squandered a 2% early gain to fall more than 0.8% to $69.22 a barrel.
The volatile session in oil came amid concern over the path of a new hurricane that has run up the Gulf of Mexico, threatening to hit oil-related facilities in Mississippi and possibly Louisiana. Crude, however, remains up 14.5% for the year.
The Nasdaq composite, which barreled 5.7% higher in August, surrendered less than 0.3%. The S&P 500 fell just 0.2%, while the Dow Jones industrial average edged less than 0.1% lower. Small caps got hurt a bit more; the Russell 2000, a 4.2% winner last month, lost 0.4%.
Volume rose on both main exchanges, according to early readings.
The coffee and fast food chain is seeing an acceleration in profit growth with earnings up 22% and 31% vs. year-ago levels in the past two quarters. The Street expects Q3 earnings to lift 20% to 73 cents a share.
In the year-ago period in 2017, earnings inched up only 2%. Partly for that reason, the Canton, Mass.-based firm gets a mediocre Composite Rating of 81 on a scale of 1 to 99 in IBD Stock Checkup. Another reason: Dunkin' does not have an SMR Rating because there was no calculable return on equity in 2017.
Wall Street Leader Apple Extends Big Breakout Gains
Apple ( AAPL), meanwhile, stretched its gain from an early-May breakout to more than 27% as shares advanced for a ninth straight session.
Apple cleared a 179.04 buy point in a well-crafted double-bottom base on May 4 in superb turnover, 61% above normal levels. It took a while for the breakout to gain steam. Yet over the past three months, Apple went on to form a bullish base on base. This chart pattern produced another proper entry point at 194.30, 10 cents above the flat-base section of the base on base.
The largest company on the Nasdaq by market value, Apple had joined IBD Leaderboard as far back as late March in 2017.
Analysts continue to show a net bullish view on the Cupertino, Calif., company's iPhone franchise. In a July 13 IBD technology section post, analysts at Nomura Instinet forecast a 2.5% increase in unit volume to 225 million for fiscal 2019, ending in September that year.
Apple is slated to report a product update on the iPhone at an event in San Francisco on Sept. 12.
The iPhone continues to be the Nasdaq-listed giant's largest source of revenue, but growth in digital services and newer product lines such as the Apple Watch and the HomePod have helped boost the overall fundamental picture.
The Thomson Reuters consensus view currently predicts Apple growing profit by 33% to $2.76 a share in the September-ending fiscal fourth quarter on a 16% jump in revenue to $61.14 billion.
Roku Rises Again
Roku ( ROKU) vaulted more than 6% and hit a session high of 63.49 after an upgrade from Guggenheim Partners and a 74 price target. Volume came in 4% lighter than average, yet rose vs. the prior two trading sessions.
Roku joined Leaderboard as a half-size position on Aug. 23, finishing that session at 80.09. On that day, the smart TV technology firm briefly surpassed a 60.75 alternative buy point after an Aug. 9 breakout from a large, deep cup with handle. That base presented a 51.92 proper entry.
According to IBD Stock Checkup, Roku shows a middling 60 Composite Rating, due in part to the fact that the company has yet to post an annual profit. But sales are growing rapidly, and Roku gets a top-notch 97 Relative Price Strength Rating on a scale of 1 (poor) to 99 (excellent).
On the downside, data storage firms Western Digital ( WDC) and Seagate Technology ( STX) dropped 4.7% and 7.7%, respectively. Wall Street firm Evercore ISI reportedly warned that the hard drive and flash storage makers will see profit margins shrink.
Stocks continued to pare their losses in late afternoon trading Tuesday, as the Dow Jones industrial average flirted with getting back to unchanged for the day.
The Nasdaq composite trimmed its loss to 0.3%, while the S&P 500 was down 0.2% in the stock market today. Small caps lagged as the Russell 2000 fell 0.5%. Volume was tracking higher on the NYSE and Nasdaq compared with the same time Monday.
Home Depot ( HD) and American Express ( AXP) led the upside among blue chips with a respective advance of 2.2% and 1.1%. Apple ( AAPL) contributed a 0.4% gain as it aimed for a ninth straight up session. The iPhone maker's shares are well extended from a 194.30 flat-base entry cleared Aug. 1.
Automakers, gold miners and consumer electronics makers, down 3% or more each, were the biggest losers among IBD's 197 industry groups. Department store, auto parts and internet retailers were among the few gainers.
Stitch Fix ( SFIX) led internet retailers with a 6% pop to a new high. The online personalized shopping service has run up nearly 200% from its 15 IPO price. Shares are sharply extended from a recent breakout. A 98 Relative Strength Rating and a relative strength line at a new high are bullish signs.
Among other internet retail stocks, handcrafted goods marketplace Etsy ( ETSY) and discount seller Overstock.com ( OSTK) gained 4% and nearly 6%, respectively.
Amazon Reaches Milestone
Also in the group, Amazon ( AMZN) rose 1.4% to notch a new high — set to extend its win streak for a seventh straight session. The online retail giant hit $1 trillion in market cap intraday. It's only the second company to reach that milestone. Apple became the first to do so, on Aug. 2.
Biotechs slid 0.5% despite big gains from three marijuana-related stocks. Tilray ( TLRY), Canopy Growth ( CGC) and Cronos ( CRON) soared 16%, 10% and 12%, respectively, with the first two hitting record highs. Short seller Citron Research said in a tweet it's shorting Tilray and called it the "most expensive" in its market. Citron last week had sent pot stocks sharply lower after raising doubts about Cronos' distribution deals.
The major indexes came off session lows Tuesday afternoon, while Amazon.com ( AMZN) stock made history by climbing to a $1 trillion market capitalization.
Amazon.com, the second-largest stock on the Nasdaq, rose to 2,050.50 in late-morning trading, enough to register $1 trillion in valuation. Amazon shares traded at 2038.33 in the afternoon, trying for a seventh straight gain.
But Facebook ( FB), another major Nasdaq component, was down nearly 3% in active trading. Reports said Amazon plans an online ad platform that would challenge Facebook and Alphabet's ( GOOGL) Google. Also MoffettNathanson downgraded the stock to neutral from buy, reports said.
Alphabet shares fell 1.5%, touching the 50-day moving average. The stock needs to bounce off that line if it's to continue forming a flat base.
Meanwhile, top executives from Facebook, Twitter ( TWTR) and Google are due to testify before the U.S. Senate Wednesday on privacy protection, Russian election meddling and other issues.
Amazon's news was a bright spot in a day of mainly negative action. The Nasdaq composite was off 0.4% and the S&P 500 0.3%. (For updates on this story and other market coverage, check Stock Market Today.)
The Dow Jones industrial average lost 0.2%. Nike ( NKE) was the poorest Dow component, down 2.5% in heavy trading as shares dipped to the 10-week moving average and below the 81.10 buy point of a breakout Aug. 9. Nike's new ad campaign features controversial former NFL quarterback Colin Kaepernick.
Volume on the NYSE and Nasdaq was higher compared with the same time on Friday. Declining stocks led advancers by 2-1 on the NYSE and by 12-7 on the Nasdaq.
Semiconductors provided some strength for the Nasdaq. The Philadelphia semiconductor index was up 0.2%.
Several high-rated stocks climbed past buy points, but few showed sufficient energy in their moves. Dunkin' Brands Group ( DNKN) was one of the strongest, surging past a 73.59 buy point in heavy trading. The parent of Dunkin' Donuts climbed to an all-time high, but the relative strength line hasn't made a new high. If it does, the RS line should make a new high as well.
Leading stocks were holding up relatively well. The Innovator IBD 50 ETF ( FFTY) was nearly unchanged.
U.S. stock indexes, after a midmorning mini-rally, were solidly lower once again near midday. Meanwhile, IBD's economic optimism index slipped, and construction spending slowed. Two manufacturing indexes rose.
The Nasdaq fell 0.6%, while the Dow Jones industrial average and the S&P 500 also carved off 0.4%. Small caps fell even harder.
Volume rose on both major exchanges.
The Innovator IBD 50 Fund ( FFTY), which had been higher, fell 0.4%. The exchange traded fund had risen in 11 of the past 12 sessions. The day's leaders in the IBD 50 included Lululemon Athletica ( LULU), up 1.5% after Friday's 13% earnings-related gain, and Medpace Holdings ( MEDP), up 1.2%.
Lululemon also makes the IBD Big Cap 20 list of top-performing large caps, currently ranking No. 5.
Blue chips were mostly down. In the 30-component Dow, Nike ( NKE) gapped down about 3% in heavy volume. The athletic apparel and footwear company decided to make former San Francisco 49ers quarterback Colin Kaepernick the face of its ad campaign. Kaepernick repeatedly refused to stand for the national anthem in a protest against racism. An anti-Nike boycott appeared to be brewing online.
Nike has not been an elite stock in many years. The last time the stock grew annual earnings by 25% or more was in fiscal 2005. The fiscal year ends in May.
In the large cap S&P 500, Ulta Beauty ( ULTA) was among the leaders. The stock advanced more than 4%, following up on Friday's 6% gain.
Among IBD's 197 industry groups, retail, utilities, soap and tobacco led. Gold miners took the hardest hit.
Oil stocks reversed after early strength. Light sweet crude rose 2.3% and then retreated to a 0.4% gain.
The ISM manufacturing index, came in at a 14-year high for August, surging to 61.3 and trouncing estimates for 57.7.
Construction spending for July edged up 0.1%, missing views for 0.4%.
(For updates on this story and other market coverage, check IBD's stock market news today.)
The stock market was broadly lower Tuesday but pared losses as the major indexes fell from record highs. FANG stock Facebook ( FB) was sharply less after a rare analyst downgrade. Meanwhile, Leaderboard stock Workday ( WDAY) will announce its Q2 results after the market close. (For updates on this story and other market coverage, visit the Stock Market Today.)
The tech-heavy Nasdaq composite fell 0.2% after losing as much as 0.8%. Meanwhile, the S&P 500 and Dow Jones industrial average fell 0.2% each.
Among the Dow stocks, Nike ( NKE) fell nearly 3% after the company made controversial football player Colin Kaepernick the face of its latest "Just Do It" ad campaign. Shares fell below a flat base's 81.10 buy point — according to MarketSmith chart analysis — and are nearing their 50-day moving average line for the first time since the Aug. 9 breakout.
Meanwhile, Apple ( AAPL) eased lower, potentially snapping its current eight-day win streak. Shares are nearing their 20% to 25% profit-taking level from a flat base's 194.30 buy point.
Among companies reporting earnings, top software stock Workday will report its Q2 results after the market close. Analysts expect the company to earn 26 cents per share on revenue of $663 million. Shares are about 10% above a cup with handle's 137.53 entry.
Friday's IBD Stock of the DayUlta Beauty ( ULTA) rose about 3% and is reclaiming a 261.50 buy point. The stock broke out Friday after its quarterly earnings report.
Among the FANG stocks, Facebook declined almost 3% after being downgraded from buy to neutral at MoffettNathanson. The price target was reduced from 200 to 175. The analyst commented that the company's deceleration in growth in conjunction with continued regulatory scrutiny is a "toxic brew" for any stock. The social media giant has been unable to regain any ground after July 26's 19% earnings sell-off.
Meanwhile, Amazon.com ( AMZN) hit another record high with a 1% rise.
Electric automaker Tesla ( TSLA) fell almost 2% after it missed a production goal of 6,000 Model 3 vehicles per week by the end of August. Still, the company's Q3 target appears reachable, according to Elektrek. Meanwhile, Goldman Sachs resumed coverage on the stock with a sell rating and a 210 price target — a 30% discount to Friday's closing price.
Major stock indexes opened lower in the stock market today as traders returned from the long weekend. The Dow Jones, S&P 500 and Nasdaq composite showed losses of around 0.4% to 0.6% just after the opening bell.
In stock market results today, sellers were in Tesla ( TSLA) stock again after Goldman Sachs resumed coverage with a sell rating, according to CNBC. Shares of Tesla were lower by 2% in early trading.
Nike ( NKE) lagged early in the Dow, down around 2%. Nike announced Monday that former NFL player Colin Kaepernick would be the face of a new "Just Do It" ad campaign.
Stock Market Today: Facebook Downgraded
Shares of FANG stock Facebook ( FB) gave back 2%, hurt by a MoffettNathanson downgrade to neutral.
But another FANG stock continued to see buying demand. Shares of Amazon.com ( AMZN) were up 0.3% to another all-time high after the New York Times reported the company is ready to jump into the $88 billion online ad market. The other two FANG stocks, Google-parent Alphabet ( GOOGL) and Netflix ( NFLX), were down 1% and 0.9%, respectively.
Elsewhere, shares of IBD Leaderboard name Roku ( ROKU) were up nearly 2% in the early going after Guggenheim initiated coverage with a buy rating and set a price target of 74.
October West Texas Intermediate crude oil futures were up 2% to $71.20 a barrel as Tropical Storm Gordon barreled ahead toward the Gulf Coast. It's expected to hit landfall tonight as a hurricane.
Wall Street will have plenty of headlines to ponder in a shortened week of trading. On Capitol Hill, confirmation hearings start today of Supreme Court nominee Brett Kavanaugh. The August jobs report is due Friday. Non-farm payrolls are expected to increase 195,000, with the unemployment rate edging lower to 3.8%.
Meanwhile, some high-profile firms will be out with earnings, including top retail stock RH ( RH), Workday ( WDAY), HealthEquity ( HQY),Ollie's Bargain Outlet ( OLLI) and Five Below ( FIVE).
Retailer RH, formerly known as Restoration Hardware, reports today after the close as it sets up in a cup-shaped base. Shares were up 0.1% in early trading.
The 10-year Treasury yield added 2 basis points to around 2.88% early Tuesday.
Dow Jones futures turned slightly lower early Tuesday, along with S&P 500 futures and Nasdaq futures, after U.S. stock markets were closed Monday for the Labor Day holiday. Trump trade war news will be key, as President Donald Trump threatens to leave Canada out of a U.S.-Mexico trade deal and escalate the China trade war. Dow Jones stock Nike ( NKE), which is in a buy zone, embraced controversy by choosing ex-NFL QB Colin Kapernick as the key athlete of its new "Just Do It" campaign. Meanwhile, home furnishing retailer RH ( RH) is near a buy point with earnings due Tuesday. Facebook ( FB), Twitter ( TWTR) and Alphabet ( GOOGL) unit Google will testify before Congress regarding their responses to foreign interference in elections. Finally, JD.com ( JD) will be in the spotlight after CEO and billionaire founder Liu Qiangdong was arrested and then released by Minneapolis police on a "criminal sexual misconduct" allegation.
Dow Jones Futures Today
Dow Jones futures fell 0.25% vs. fair value. S&P 500 futures were down 0.15%. Nasdaq 100 futures slid 0.2%. The major stock averages rallied last week, with the S&P 500 index and Nasdaq composite setting fresh all-time highs. Emerging market woes continue.
Trump Trade War Vs. China, Canada
The U.S. could impose tariffs on $200 billion worth of Chinese goods as soon as Sept. 6, after the public comment ends. That would be on top of 25% Trump tariffs on an initial $50 billion worth of Chinese imports. The China trade war escalation is expected. The big question is whether the $200 billion will face a 25% Trump tariff or 10%.
Meanwhile, U.S.-Canada trade talks ended Friday without a deal, but with negotiations set to resume this week. But Trump signaled Saturday that he is ready to leave Canada out in the cold.
There is no political necessity to keep Canada in the new NAFTA deal. If we don't make a fair deal for the U.S. after decades of abuse, Canada will be out. Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off...
Nike is using Colin Kapernick as the main athlete in its 30th anniversary "Just Do It" campaign. Kapernick sparked the ongoing take-a-knee protest by NFL players during the national anthem, dividing fans and inspiring outrage from President Trump. Nike must see an upside from courting supporters of the NFL protests and Trump opponents, but risks turning off millions of customers as well.
Nike stock reclaimed an 81.10 buy point from a flat base on Aug. 20 in heavy volume. Nike stock closed Friday at 82.20.
The luxury home-furnishings retailer formerly known as Restoration Hardware reports late Tuesday. Analysts expect RH earnings to surge 166% to $1.73 a share. Sales should grow 7.5% to $661 million. Investors will close attention to how the RH membership model is going, as well as its showrooms.
RH stock is in a cup-with handle base with a 161.49 buy point. RH stock closed Friday at 159. Shares rose 1.9% to 162 early Tuesday, signaling a breakout at the open.
The relative strength line, which tracks a stock vs. the S&P 500 index, is a little below the old high. It's bullish to have the RS line moving into new high ground along with or ahead of a stock breaking out.
RH stock skyrocketed 22.5% and nearly 31% after the last two RH earnings reports. Then again, investors may have already priced in good news.
Facebook, Twitter, Google On Capitol Hill
Twitter CEO Jack Dorsey and Facebook Chief Operating Officer Sheryl Sandberg will testify before the Senate Intelligence Committee Wednesday morning on how their companies have responded to foreign disinformation campaigns in the wake of Russia's use of social media to influence the 2016 election. Google CEO Sundar Pichai declined to attend but the Alphabet unit will have a representative to testify. Twitter's Dorsey also will testify that afternoon before the House Energy and Commerce Committee.
The social media giants are testifying before Congress as Trump has hammered Google, accusing the tech giant of "rigged" search results vs. conservatives. He's also said that the power of Google, Facebook and Amazon ( AMZN) represent a "very antitrust situation." More broadly, there is growing support from the left and right for regulation of various kinds vs. internet giants.
Facebook stock crashed in late July after warnings of slowing growth. Shares have risen slightly since then, but the Facebook RS line has edged lower, falling to a 16-month low on a weekly chart. Facebook stock dipped 1.1% early Tuesday, as MoffettNathanson downgraded to neutral from buy, citing a "toxic brew" of slowing growth and continued regulatory scrutiny.
Twitter stock also crashed in late July following its latest earnings report, though shares found support at the 200-day line. Twitter saw user levels fall vs. the prior quarter and said that could happen again in Q3. That's due to Twitter suspending fake or suspicious accounts, a move that might mollify critics on Capitol Hill. Twitter stock has edged higher in the past several weeks, but its RS line has not made much headway.
Google parent Alphabet is still in buy range from a 1,201.59 high-handle buy point cleared in July. Investors should probably turn their attention to a new flat base within a base-on-base pattern. The new Google stock buy point is 1,291,54, with shares closing Friday at 1,232.11. Google stock's RS line is at consolidation lows, however.
Liu Qiangdong is back in China after a Friday night in Minneapolis. Local police released Liu without bail and put no travel restrictions on Chinese internet billionaire. But they are still investigating the "criminal sexual misconduct" allegation involving a Chinese student at the University of Minnesota. Liu is a doctoral student at the university, and was in Minneapolis for his studies.
JD.com stock was down 3.5% in the premarket. It already hit a 17-month low intraday Friday. Chinese internet giant Tencent ( TCEHY) owns a major stake in JD. Walmart ( WMT) and Google also have JD stock holdings and partnerships.
The stock market closed mixed, capping a month of good gains for the market and in particular for the Nasdaq composite. The S&P 500 today was barely higher.
The Nasdaq composite climbed 0.3% and came close to a new high. Small caps also performed better, with the Russell 2000 up 0.4%.
The S&P 500 rose a fraction, and the Dow Jones industrial average fell 0.1%. Boeing ( BA) was the biggest drag on the Dow, falling 1.2% despite news that it won a contract to build a refueling drone for the U.S. Navy. Boeing's 4.11-point loss alone was enough to put the Dow in the red.
Late in the session, Dow Jones reported that U.S. and Canadian negotiators had failed to reach a new trade agreement. But U.S. officials said talks would soon continue. Indexes gained some ground in the final half hour after the headlines indicated hopes for a deal.
Volume fell, according to preliminary figures. Trading tends to slow down on the Friday before a three-day weekend on Wall Street. The stock market will be closed Monday for Labor Day.
For the month, the Nasdaq added 5.7%, the best month since January's 7.4% increase. The S&P 500 rose 3% and the Dow 2.2%.
The retail sector shined again, as a handful of store chains made big gains. Specialty, apparel, mail order, consumer electronics were in the top seven industry groups Friday.
Lululemon Athletica ( LULU) surged 13% to a new high after the company smashed Wall Street estimates and reported a 20% pole vault in quarterly same-store sales. The athletic wear company also raised full-year guidance. Lululemon has been a productive pick of IBD Leaderboard.
Ulta Beauty ( ULTA) jumped after the company's earnings report and news that Ulta will sell a line of cosmetic products from Kylie Jenner, the social media star. Ulta shares topped the 261.50 buy point of a flat base but closed slightly below it. Volume was heavy but the relative strength line failed to make a new high.
The SPDR Retail ETF ( XRT) climbed 1.3% Friday and nearly 5% for August.
Semiconductor stocks also were strong, with the fabless chip group up more than 1% on the day. The Philadelphia semiconductor index rose 0.6%.
Energy, internet, building and some transportation groups were in the bottom of the 197 groups for the day.