Stocks got off to a weak start and remained in the red until the closing bell Thursday as investors confronted data that showed inflation in September came in a bit hotter than predicted and an unexpected rise in initial weekly jobless claims. But selling softened on the stock market today as losses for the three major indexes were minimal.
In the semiconductor space, Advanced Micro Devices slid 4% in the heaviest turnover on a down session since Aug. 2. The company, during an event on AI innovation, touted a new datacenter chip with exceptional performance vs. its formidable rival in Silicon Valley. AMD continues to build a long base, so it still has potential to break out and resume leadership in the stock market today.
On the positive side, some areas of the vast software sector rose in bullish form.
The Nasdaq reversed an opening loss of more than 0.7% into a small gain at one point before inching back into negative territory. It ended the day down less than 0.1%. Still, the tech-heavy composite index remained on track for a potential fifth straight week of gains. Security software firms advanced, along with oil and gas, logistics, airline and select retail industry groups.
Meanwhile, the S&P 500 trimmed earlier losses and slid modestly, down 0.2%. The Dow Jones Industrial Average also pared losses and was off 0.1%.
Small caps on the Russell 2000 took the worst of it, slipping 0.7%. On the bright side, the Russell remains above its 50-day moving average, which has been sloping slightly lower in the past three weeks.
Volume grew on the Nasdaq vs. the same time Wednesday but shrank significantly on the New York Stock Exchange.
The indexes cooled off as the cost of money continued to inch higher. The yield on the key U.S. Treasury 10-year bond rose for a seventh straight session, up one basis point to 4.07%. West Texas intermediate crude oil jumped nearly 4% and pressed near $76 a barrel.
Stock Market Today: Fund, Fortinet Rise
At the sector level, enterprise software stocks outperformed.
The iShares Expanded Tech-Software exchange traded fund accelerated its gain by day's end, rising 0.7% in the heaviest turnover in three weeks. IGV also marked its sixth rise in seven sessions. Chart-wise, IGV has moved slightly more than 5% past a cup-with-handle base that shows an 87.74 buy point. The 5% buy zone goes up to 92.13.
Fortinet, an expert in securing wide area networks, rolled more than 1% higher for a second straight session. Shares in the large-cap tech continued to rise past a shelf with a 78.08 pivot point.
The shelf pattern offers a secondary entry point. Those who bought Fortinet during its breakout from a large cup with extended handle at 73.91 and have a nice gain could use the shelf as an opportunity to buy a small amount of additional shares — say, 5% or 10% of the initial position.
In Fortinet's security software industry group, CrowdStrike surged 5.6% to 314.92, climbing back the long-term 200-day moving average for the first time since July. The cloud-focused cybersecurity giant remains more than 20% below a 398.33 all-time high. Put another way, CRWD needs more time to rebound and carve out the right side of a new cup pattern.
Palo Alto Networks rallied 1.8% to 369.40 in dull turnover for its third straight advance. It's gotten closer to surpassing a 375.37 entry within a long saucer-like base.
Palo Alto hosts a decent 83 Relative Strength Rating on a scale of 1 to 99 on a 12-month price-performance basis. That's up from 63 six months earlier. Wall Street has revised its earnings forecasts higher recently and forecast profit of $6.27 a share in fiscal 2025 (ending in July that year), up 11%, and $7.20 (up 15%) in FY 2026.
Palo Alto sports a solid 91 Earnings Per Share Rating, according to IBD Stock Checkup.
3:43 p.m. ET
This Bank Gets Hammered
On the downside, Toronto Dominion Bank got hammered for a 5.5% loss. Volume zoomed eight times usual levels and the stock pierced its 50-day and 200-day moving averages.
The Wall Street Journal reported the money center has settled with the U.S. government over charges of failing to stop illegal money laundering activities. The bank got handed a $3 billion penalty. U.S. authorities set a cap on its U.S.-based retail banking assets. The Canadian lending institution, with more than 10 million U.S. customers mainly on the East Coast, also announced Chief Executive Bharat Masrani will leave his post next year.
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The big drop forfeited nearly five weeks' worth of gains. Its 63 Relative Strength Rating indicates TD Bank is not a leader within IBD's Banks-Money Center industry group.
On Friday before the open, the industry group's leader JPMorgan Chase and industry peer Wells Fargo are set to report third-quarter results.
Goldman Sachs, another Wall Street giant and member of the 30-stock Dow industrials, eased 0.7% to 501.61 but remains in a two-month base. The standard buy point is 517.26; it also offers an early entry at 506.41.
Check the IBD Earnings Calendar for more quarterly results coming down the pike.
2:20 p.m. ET
Stock Market Today: Inflation Hurts Small Caps
Small caps also endured a blow Thursday on news from the Labor Department that the consumer price index for September rose 2.4% vs. a year ago, slightly above the Econoday estimate of 2.3%. Excluding food and energy prices, however, the CPI increased 3.3% vs. economists' forecasts for 3.2%.
Bryce Doty, senior portfolio manager at Sit Investment Associates, wrote in a comment to Investor's Business Daily: "While CPI came in slightly higher than expected, it's still a relief it wasn't worse. Seeing shelter costs moderate finally is also a relief. The Fed is likely to cut 25 basis points."
Back in September, the Federal Reserve cut the fed funds rate by half a point to a target range of 4.75%-5%. But bond traders are currently pricing in zero chance of another half-point trim at the upcoming policy meeting on Nov. 7.
According to CME FedWatch, the probability of a quarter-point cut has risen to 80%, while there's now a 20% chance of no cut at all.
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12:37 p.m. ET
This IBD 50 Leader Gets Thumped
ADMA Biologics, No. 1 on the IBD 50 list for weeks, plunged nearly 20% in steep turnover. ADMA said in a late filing with the Securities and Exchange Commission Wednesday that its main accounting and auditing firm, CohnReznick, resigned.
ADMA sharply undercut its 50-day moving average after a strong two-month run-up. A failure to reclaim the 50-day line would spur a defensive sell signal to take profits.
At its low of 15.67, ADMA stock sank 26% below its all-time peak of 21.13, marked on Wednesday.
The small cap is a member of IBD's biotech industry group, which ranks 42nd among 197 IBD industries in terms of six-month relative performance.
10:56 a.m. ET
Stock Market Today: Inflation, Hurricane News
Small caps also endured a blow Thursday on news from the Labor Department that the Consumer Price Index for September rose 2.4% vs. a year ago, slightly above the Econoday estimate of 2.3%. Excluding food and energy prices, however, the CPI index increased 3.3% vs. economists' forecasts for 3.2%.
In other economic news, weekly jobless claims grew to 254,000 in the latest reported week, sharply above economists' predictions for 226,000. The four-week moving average in initial claims rose to 231,000.
Also, insurance stocks gained some ground after Hurricane Milton made landfall late Wednesday. The storm tore a wide and vicious path through central Florida, including the state's major cities of Tampa, Orlando and Sarasota.
News reports said more than 3 million residents lost power. Allstate and Progressive both advanced for the third straight session.
Another View Of The S&P 500
The Invesco S&P 500 Equal Weight exchange traded fund exuded calm action. After rising more than 0.9% in the past two sessions, the ETF eased just 0.1% on the stock market today.
Notice on a daily chart at MarketSurge how the Invesco fund continues to coast above an important short-term technical level, the 21-day exponential moving average. The ETF shows a solid year-to-date gain of 13.2%.
Nonetheless, in the small and midcap spaces, breakouts remained challenging.
Stock Market Today: Vertex Gaps Down
Tax and accounting software provider Vertex gapped down at the open and dropped more than 3%. It hit a morning low of 39.44. Volume bulged 96% above its average pace over the past 50 sessions, indicating holders took advantage of the recent breakout past a traditional buy point of 40.05 to take gains.
Within the base, an early buy point emerged near 38.66, close to a trendline that could be drawn from the base's left-side high.
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The base in Vertex showed elements of a double bottom, but the second low did not undercut the first low of 34.19. That's a major flaw.
Within the IBD 50, other small and midcap growth stocks taking a hard hit on the stock market today included American Superconductor, Zeta Global and medical diagnostics firm Lantheus.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
