The Dow Jones Industrial Average fell but the Nasdaq fared even worse as losses intensified, following a disastrous Snap earnings report. Twitter rallied out of the red after pointing the finger of blame at Tesla CEO Elon Musk.
A couple of stocks still managed to attempt breakouts despite the challenging action. BJ's Wholesale Club and Parsons both tested buy points.
Volume was mixed, rising on the Nasdaq but falling on the New York Stock Exchange vs. the same time Thursday.
The yield on the benchmark 10-year Treasury note fell 12 basis points to 2.79%. West Texas Intermediate crude oil dipped almost 2% to just under $95 per barrel.
Nasdaq Hit As Tech Stocks Tumble
The Nasdaq was faring worst of the indexes, dropping more than 2%. It still looks set to end the week with a solid gain. Outside of social media stocks, Lucid Motors was a notable laggard. It dropped nearly 9%.
The S&P 500 was also being spanked, dropping more than 1%. Silicon Valley Bank parent SVB Financial was one of the worst performers as it fell more than 18%.
The S&P 500 sectors were mostly negative. Utilities and consumer staples, both defensive areas, were the best performers. Technology and communication services lagged.
Small caps were also being mauled by the bears, with the Russell 2000 falling more than 2%.
The Innovator IBD 50 ETF, a bellwether for growth stocks, was also being butchered. It fell 2.4%.
Dow Jones Today: American Express Stock Shines
The Dow Jones Industrial Average saw losses intensify as the session wore on. It was down nearly 300 points, just shy of 1%.
American Express was the component faring best following an encouraging earnings report. It gapped above its 50-day moving average, according to MarketSmith analysis. Its gain of more than 2% was well off highs for the session though.
It popped as growth in travel and entertainment spending gave the firm an earnings boost. EPS of $2.57 and revenue of $13.4 billion were both higher than Wall Street views.
Verizon was the worst performer on the Dow Jones today. It fell more than 7% after it slashed full-year guidance and missed earnings views.
The company also said it added 12,000 net retail phone subscribers. This was well below analyst expectations.
Snap Stock Craters On Earnings
A big reason for the underperformance of the Nasdaq was the knock-on effects of a disastrous Snap earnings report.
The firm reported an adjusted loss of 2 cents a share on revenue of $1.11 billion. Analysts expected a per-share loss of 1 cent on revenue of $1.14 billion.
CEO Evan Spiegel said the disappointing results were due to slowing demand for its online ad platform.
The social media stock was down nearly 39% and looks set to end the week with a mammoth loss.
It has now nosedived away from the key 10-week moving average, bringing a recent period of tight trading to a juddering halt.
A number of related stocks were also being punished amid fears over digital advertising revenue. Facebook parent Meta Platforms dived more than 7%, Google parent Alphabet dropped more than 6% and Pinterest plummeted around 14%.
Twitter Stock Up Despite These Elon Musk Costs
Twitter stock managed to rally out of negative territory as it bucked the trend.
The company claimed uncertainty related to the takeover deal agreed to with Tesla CEO Elon Musk was one of the reasons for the fall in revenue.
It posted a loss of eight cents per share while analysts had been expecting EPS of 14 cents. Revenue of $1.18 billion was also light.
While the firm cited advertising industry challenges due to the broader challenging business, it also blamed "uncertainty related to the pending acquisition" by Elon Musk.
It also said costs related to the Musk acquisition came in at around $33 million in the second quarter.
TWTR stock managed to shake off earlier negative action to rise more than 1%. It is holding clear of the key 50-day moving average.
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Outside Dow Jones: This Duo Tests Entries
A couple of stocks managed to break out of bases despite the overall negative action.
BJ's Wholesale Club is trading just below a double-bottom base buy point of 71.10 after earlier clearing the level.
The discount retailer has a top-notch EPS Rating of 95 out of 99, which reflects strong earnings performance.
It is also in the top 5% of stocks in terms of price performance over the past 12 months.
Big Money has also been snapping up the stock of late, with its Accumulation-Distribution Rating coming in at B-. In total, 67% of its stock is held by funds.
Enterprise software play Parsons also backed off after clearing a flat base entry of 41.94.
This is a first-stage pattern, which is bullish. IBD research shows early stage bases are more likely to succeed. Overall performance is good, with its IBD Composite Rating coming in at 86 out of 99.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
