The Dow Jones Industrial Average made a meager gain despite negative economic news. Bitcoin was sharply off highs as ETFs started trading, while fund manager Cathie Wood bought a diving stock. Meanwhile, Microsoft closed with a lower market cap than Apple despite briefly surpassing its old rival.
A trio of stocks moved higher toward entries. DoubleVerify, Cadre and Tradeweb Markets all made progress.
Stocks Fight Back From Inflation Surprise
Stocks managed to battle back from early pressure caused by some negative economic data. The Consumer Price Index rose 0.3% in December, higher than the 0.2% monthly increase expected by economists.
The 3.4% year-over-year increase was also above views. Core CPI, which strips out volatile food and energy prices, also popped 0.3% on the previous month, while the annual increase came in at 3.9%. Both were hotter than estimates.
Meanwhile, initial unemployment claims fell by 1,000 to 202,000, according to Labor Department data. They had been expected to rise to 209,000, according to Econoday. This is the lowest level since October.
Rising inflation and ongoing strength in the labor market are negatives as investors look for the Federal Reserve to start cutting interest rates.
"The last Fed minutes unscored that the path toward price stability remains uncertain, and today's CPI report suggests that the Fed's initial rate cut may be later than the market is hoping for," LPL Financial Chief Global Strategist Quincy Krosby said in a note to clients.
Also Thursday, the U.S. budget deficit came in just below $510 billion from October 2023 through December 2023, the first quarter of the fiscal year. Total government debt topped the $34 trillion level for the first time.
Nasdaq Rebounds, Small Caps Dive
The Nasdaq composite fought its way out of the red to close nominally higher, though it was essentially flat. Magnificent Seven stock Tesla was among the laggards as it closed the day down 2.9%.
The S&P 500 fell 0.1% but closed well off session lows. Netflix was a star in the benchmark index as it popped 2.9%. It is trading in a buy zone above a 482.70 entry, according to MarketSmith analysis. Netflix is discussed in today's IBD Stocks to Watch.
S&P 500 sectors were mostly negative. Technology and energy fared best in the stock market today. Real estate and utilities lagged the most.
Small caps were bitten by the bears, with the Russell 2000 falling 0.8%. Growth stocks fared better, the Innovator IBD 50 ETF reversing higher to close up 0.1%.
Treasury yields were lower. The 10-year Treasury note fell 4 basis points to 3.99% while the 30-year dipped 1 basis point to 4.19%. The 5-year yield fell 8 points to 3.9% while the 2-year dived 11 basis points to 4.27%.
Dow Jones Today: Microsoft Overtakes Apple, Falls Back
The Dow Jones Industrial Average rallied out of negative territory to turn in a gain of 15 points. It was essentially flat.
Microsoft stock briefly overtook index rival Apple in terms of market capitalization. It was up 0.5%. AAPL was down fractionally.
MSFT briefly cleared a flat base with a buy point of 384.30, according to MarketSmith analysis. This is a second-stage base, which means it is more likely to net good gains.
Salesforce fared best on the Dow Jones today with a 2.7% gain after an analyst upgrade.
Boeing fell 2.3% after Transportation Secretary Pete Buttigieg said 737 Max 9 planes won't fly until they are considered safe following the Alaska Airlines door plug emergency.
Verizon Communications fell the most in the Dow though, due to a dip of 3%.
Bitcoin Gains Fade, Cathie Wood Buys This Stock
Bitcoin fell nearly 6% from its 24-hour highs after it briefly cleared the $49,000 per token level. It was trading for just over $46,000, according to CoinDesk.
Late Wednesday, the Securities and Exchange Commission approved a slew of spot bitcoin ETFs. Action was mixed among these funds Thursday.
The well-established Grayscale Bitcoin Trust surged early but closed well off highs for the day. It finished up 0.5%. BlackRock's spot bitcoin ETF, the iShares Bitcoin Trust (IBIT) closed the session down 4.7%.
Another noteworthy fund is ARK 21Shares Bitcoin ETF (ARKB), Ark Invest's offering in the space. But the ETF, part of Wood's Ark Invest family, finished the day down 6.8%.
Other bitcoin stocks were getting hammered. Coinbase fell 6.7%, Riot Platforms plunged 15.8% and Marathon Digital dived nearly 15.8%.
Meanwhile Wood made an investment decision that failed to immediately pay off. On Wednesday her firm bought more than 5,000 shares of Unity Software for the ARK Innovation ETF (ARKK). It ended Thursday down 2.4% and is now down 20% from its Dec. 27 high of 43.54.
Futures Fall Amid Big Earnings; Tesla Cuts Prices
Outside Dow Jones: These Stocks Near Entries
While stocks were getting pressured, a few stocks near entries impressed by moving higher.
Enterprise software firm DoubleVerify is nearing a cup-with-handle entry of 38. It closed the day up 2.4%.
Cadre is nearing a flat-base entry of 33.62. The safety and survivability products firm rose 4.2%. Overall performance is excellent, netting it a perfect IBD Composite Rating of 99.
Tradeweb Markets is closing in on a flat-base buy point of 97.18 after it rose 1.3%. The relative strength line is making progress. The financial services play has top-notch earnings, reflected in its EPS Rating of 96 out of 99.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
