Large and megacap stocks outperformed on the stock market today as the Dow Jones Industrial Average slipped, but fell much less than the Russell 2000. One large stock, Microsoft, got support at a key technical level while testing a 366.78 buy point, as concert venue upstart Sphere Entertainment sold off and hit five-month lows.
Still, the Nasdaq composite outperformed the other indexes. Its gain of 0.3% stood in contrast to a 0.2% dip by the Dow Jones industrials. The S&P 500 traded practically at the break-even point, off by just 2.6 points at 4,567.
Meanwhile, the small-cap Russell 2000 sank 1.2%, giving back all of Monday's rally. At 1,856, the Russell holds a slim 5.5% gain for the year vs. a healthy 18.9% lift for the S&P 500.
Midcap stocks fell roughly the same amount as small caps, as the SPDR S&P Mid Cap 400 ETF backtracked about 1.3%.
Turnover Cools Off
Volume edged down 1% on the Nasdaq and declined 10% on the New York Stock Exchange vs. Monday, according to the MarketSmith homepage. MarketSmith counted 121 stocks that rose in heavy turnover while 338 others fell in above-average volume.
Also, several issues on IBD's Stocks On The Move table showed brisk gains in heavy volume. One was app and software development platform GitLab, which scored a solid profit of 9 cents a share in the October-ended third quarter on a 32% sales jump to $149.7 million. GTLB vaulted 11.4% in volume that exceeded 12 times its usual level. Alkami Technology, which was profiled in Tuesday's IBD Live show, also made a significant climb.
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Another bullish mover was Blackbaud, which darted out of the 5% buy zone after clearing a standard buy point of 78.71 within a base of nearly five months. BLKB rallied 3.2% in turnover that zoomed 149% above its 50-day moving average. The stock has also risen in heavy volume for the third day in a row.
Blackbaud's software is designed to help nonprofit organizations operate more efficiently. Company profit has grown at a much faster rate than sales in each of the past three quarters. BLKB stock gets a 93 Earnings Per Share Rating and a 98 Composite Rating.
Dow Jones Today
Within the 30-stock Dow Jones industrials, eight members fell 1 point or more, weighing on the blue-chip index. Leading the downside was Goldman Sachs, which slumped more than 7 points, in excess of 2%. The stock at one point traded as low as 340.54.
Still, Goldman's chart highlights action since mid-July that resembles a double bottom with a 346.19 buy point. The stock also formed a handle in recent weeks that highlights a lower entry at 341.77.
The veteran Wall Street firm has seen profits get squeezed even as revenue grew 51%, 77%, 74% and 54% vs. year-ago levels in the past four quarters. Over that same time frame, profit fell 69%, 18%, 60% and 34%. That said, analysts think the bank will boost earnings by 38% next year to $34.84 a share.
Further, fellow Dow Jones member Microsoft is holding bullishly at its rising 21-day exponential moving average, currently near 368.51. Microsoft rose 0.9% to 372.52 in lighter turnover.
Not much progress has been made since the heavy investor in OpenAI cleared its latest base with a 366.78 buy point. Yet one could draw a trendline from the base's left-side peak across the Oct. 25 peak of 346.20 to generate an early entry near 345. Microsoft shares have climbed 11% from that early buy point.
Expected to grow fiscal 2024 and fiscal 2024 earnings by 15% each year, Microsoft comprises a half-size position in IBD Leaderboard.
On The Downside
Elsewhere, Sphere Entertainment gouged its 200-day moving average with a loss of 5.21 points, or 15.5%. Volume shot up more than 10 times its 50-day moving average.
The stock holds a negative D- Accumulation/Distribution Rating on a scale of A to E. The rating covers 13 weeks of price-and-volume movement. Prefer stocks that show a rating of A or B.
Early Tuesday, Sphere announced a private offering of $225 million in senior convertible debt. The company showed a long-term debt-to-equity ratio for fiscal 2023 that ended in June of 43%, which is not high. It also has 35.1 million shares outstanding and a float of 26.5 million.
The company posted outstanding earnings in the second and third quarters. But it also showed a decline in sales, down 8% and 4%, respectively. Sphere replaced its chief financial officer in November.
Now trading more than 35% off its 52-week peak of 43.93, Sphere stock will need more time to build a proper base that delivers a solid buy point.
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