The stock market appeared to be tiring from its four-day sprint as indexes erased or thinned earlier gains in afternoon trading Thursday. But buyers came back to the market around 1 p.n. ET.
The Dow Jones Industrial Average was down 0.1% after wiping out earlier gains. Salesforce was the Dow's best performer, up 3% and back above its 50-day moving average. The stock continued to work on a cup base. The customer relationship software firm beat sales and profit estimates for its July-ended quarter, and some key metrics came in above views.
The S&P 500 was up 0.2% while the Nasdaq rose 0.5%. Volume fell on the Nasdaq and rose on the NYSE compared with the same time on Wednesday. The Russell 2000 was up 0.1%, getting turned away as it climbed to its 50-day moving average.
The Innovator IBD 50 ETF outperformed the stock market with a 0.6% increase and is edging back above its 200-day moving average. While there were no standout moves in the IBD 50, Arista Networks, Tidewater and Braze are headed for new closing highs.
A day after regaining its 50-day moving average, Apple was nearly flat in afternoon trading as it works on a cup base with a 198.23 buy point. UBS analysts warned Thursday of an "increased risk" that iPhone revenue is tracking below expectations of $43.5 billion and UBS' estimate of $42.7 billion for the current quarter.
Stock Market Keys On Inflation Data
Inflation continued to cool off. The personal consumption expenditures, or PCE, price index rose 0.2% in July. The annual inflation rate rose to 3.3% from 3% in June, which was the lowest since March 2021. Core prices rose 0.2% in July, while the core 12-month inflation rate came in at 4.2%, as expected. The Federal Reserve primary inflation gauge is the PCE, especially the core rate.
In other economic data, personal income rose 0.2% from the previous month vs. forecasts of a 0.3% increase. Personal consumption expenditures rose 0.8%, above views, in a sign the U.S. consumer remains buoyant.
Jobless claims fell to 228,000 last week from a revised 232,000 the previous week. That's 10,000 short of what economists had expected and was a reminder that the labor market remains tight.
"The soft landing view still holds, but there are some warning signs coming from the consumer as the savings rate continues to tick down," BMO Capital Markets Senior Economist Jennifer Lee said in a note. "That was bound to happen at some point following the Fed's aggressive rate hike campaign. And, the higher supercore measure is certainly not going to comfort policymakers."
Friday before the market opens, the Labor Department will release the August employment report. Economists expect 170,000 job additions, down from 187,000 the previous month, according to Econoday. The unemployment rate is seen staying at 3.5%.
Earnings Reaction Mixed
Two earnings reports gave the cybersecurity industry group a bullish jolt in today's stock market.
CrowdStrike rallied nearly 9% in heavy volume and went back above its 50-day line in stock market trading. The company beat profit expectations as adjusted EPS jumped 105% and revenue, including acquisitions, climbed 37%.
Okta soared 13%. The company reported it earned 34 cents a share, up from a 10-cent loss in the year-ago period. Revenue rose 23% to $556 million. The results topped analysts' estimates. Okta raised its full-year revenue outlook, an analyst said in a note to clients.
Fiber optics and network infrastructure company Ciena surged 15% in heavy volume, gapping above its 200-day moving average. Revenue rose 23% and beat views, while earnings also topped expectations, up 79% on an adjusted basis. The stock has broken out above a trendline from its March top.
Stock Market Punishes Dollar General, Land's End
The retail sector's dismal second quarter continued with Dollar General, which fell 14% and hit a March 2020 low. And it's not the stock's worst day this year: It plunged 19.5% June 1 on its previous earnings report.
The discount chain missed earnings and sales estimates and slashed its guidance. EPS slid 28.5% to $2.13 as sales rose 3.9% to $9.8 billion. Dollar General cited slowing traffic, an increase in inventory shrink and markdowns.
But Ollie's Bargain Outlet climbed 4% in big volume in afternoon stock market trading, reaching a two-year high. Earnings growth accelerated for the fourth straight quarter. The discounter raised its outlook, too.
Apparel retailer Land's End plunged 23% after its July-quarter loss widened from the year-ago period and sales fell 8%. The company expects losses for the current quarter and full year. But the apparel seller grew gross margin by 220 basis points and cut inventory by 30%.
In the financial sector, Swiss bank UBS gapped up to an all-time high. The bank's acquisition of Credit Suisse helped UBS reach a record profit of $29 billion in the second quarter. The stock has climbed 20% from its 22.30 buy point, which means investors who bought at that entry can take some profits.
