Major indexes clawed back some losses by the market close Thursday but still were down sharply on disappointing economic news that fueled recession jitters. Meta Platforms clung to early gains but Nvidia failed to reclaim its 50-day moving average on the stock market today. Meanwhile, earnings from Apple and Amazon were due after the close.
The Nasdaq composite skidded by more than 3% at one point, though it managed to whittle that down to a 2.3% loss at the close. The tech-heavy index tried to find support at its 50-day moving average with a big gain Wednesday, but fell well below the line in Thursday's action by dropping more than 400 points.
Moderna and Arm Holdings were the worst performers on the Nasdaq. Both stocks plummeted by double-digit percentages after earnings.
The S&P 500, down more than 2% at one point, ended with a 1.4% deficit. The benchmark index was in danger of slipping below its 50-day moving average in intraday trades but managed to finish the session just around that level. Among the sectors, utilities and real estate fared well while technology and energy lagged.
And after dropping 700 points at one point, blue chip stocks on the Dow Jones Industrial Average recovered enough to conclude the day with a 495-point shortfall, ending just above their 21-day exponential moving average. The index erased 1.2% of its value on Thursday, but managed to hold above the psychologically important level of 40,000.
Looking ahead to Friday, payroll data for July is expected to show a fall to 180,000 from 206,000 in June.
1:57 p.m. ET
Stock Market Today: Megacaps See Mixed Fortunes
Meanwhile, megacap techs saw mixed fortunes on August's first trading day.
Meta Platforms remained a true leader, though it pared gains drastically. Shares rose as much as 11% before dwindling to just over 4% in recent action. It rose on strong second-quarter results and an ambitious plan to fuel further growth with artificial intelligence technology.
But chip designer Arm suffered a pounding near 17% loss after its outlook disappointed investors on the stock market today. At midday, Arm was more than 35% off its all-time high of 188.75.
Arm triggered an IBD sell rule by sinking sharply below its 10-week moving average near 152 last week, then falling even further below its 10-week line this week. Great stocks find a floor of support at their 10-week line rather than crash below it. Among other chip stocks, Qualcomm fell to test the 200-day moving average after third-quarter results.
Other Sell-Offs: Ingersoll Rand, Monday, Mobileye
Ingersoll Rand triggered a sell signal and fell below the 50-day moving average in strong volume after its second quarter results while Monday gapped down below the key level as well, ahead of second quarter results on Aug. 12.
Mobileye sank to a new low after second quarter sales fell 3% while earnings declined 47%.
Also in health care Moderna plunged below the 200-day moving average after Q2 sales declined 30% though the company trimmed its losses per share to $3.33 per share from $3.62 in the prior year quarter. Shares are seeing the biggest loss since Nov. 5, 2021, when they fell 16.56%, according to Dow Jones Market Data.
Crocs fell but rebounded from the 200-day line after second quarter results. The footwear maker expects tepid sales growth of 4% at the midpoint in 2024.
One company that managed to climb was Vertex Pharmaceuticals, which rose to a new high after the Food and Drug Administration accepted its application for its non-opioid drug to treat moderate to severe pain.
12:28 p.m. ET
Sell Rules Triggered For These Stocks
Other stocks also got slammed.
Bandwidth, part of IBD's enterprise software industry group, plummeted over 25% in heavy volume. At 17.20, the stock gouged its 50-day line, triggering a sell signal. The stock was setting up in a cup without handle, but did not break out.
Archrock, in the oil and gas machinery and equipment area, slumped 7% in volume running more than usual levels. It marked a seventh decline in eight sessions and also fell further below the 50-day moving average, a bearish change of character.
And Kirby plunged more than 7% below its 50-day line following its earnings report. The stock was on IBD Leaderboard but vacated the model stock portfolio due to a lack of profit cushion ahead of Thursday's earnings report.
Stock Market Today: Lighter Volume
Volume on the NYSE and Nasdaq was running lighter vs. the same time early on Wednesday, according to the MarketSurge homepage. But after soft data on the U.S. economy hit the wires, turnover grew 14% on the Nasdaq and more than 20% on the New York Stock Exchange. That indicated heavy institutional selling.
In economic news, weekly initial jobless claims revved up to 249,000 in the latest reported week, higher than expectations of 236,000 and above the highest individual forecast offered on Econoday.
But then the stock market swerved lower on weak data on the manufacturing front.
The ISM manufacturing index for July dropped to 46.8, well below the consensus forecast of 48.8. A reading below 50 signifies contraction among the nation's factories.
Bond Buying Bonanza
Investors rushed into safe-haven Treasury bonds. According to MarketWatch, the yield on the two-year Treasury bond fell 13 basis points to 4.19%. The 30-year Treasury bond edged slightly lower to 4.28%. The benchmark 10-year bond fell to 3.98%.
Meanwhile, despite the widespread selling in the stock market today, Shake Shack vaulted above its declining 50-day moving average after reporting sharply-higher-than-expected earnings and sales. But the stock needs more time to flesh out a full base. That offers the most timely opportunity to buy shares before a potential big price run.
Shake Shack shares held nicely above 100, up more than 15%. The stock hit an intraday high of 105.68, less than 6% below a 52-week peak of 111.29.
Also on the upside, Clearwater Analytics broke out of a long base with a 21.89 buy point. Shares bolted more than 15% in active trading. The daily chart highlights prior resistance near 20.55, which also served as an aggressive entry.
Clearwater reported earnings of 10 cents a share, up 25% vs. a year earlier, as revenue climbed 19% to $106.8 million. The provider of sophisticated tools for asset management firms also debuted a new product to help corporate clients raise capital in the commercial paper (short-term debt) markets more efficiently.
10:41 a.m. ET
Three Growth Stocks Show Troubling Action
In July, the S&P 500 gained 1.1% for its third straight monthly gain. But the Nasdaq closed last month down almost 0.8%, snapping a two-month win streak.
On the negative side in the stock market today, Marriott and United Therapeutics have also shown bearish moves since reporting their quarterly results.
On Wednesday, United Therapeutics undercut its 21-day exponential moving average, an important short-term technical level for more-active traders, following results. Earnings grew 12%, marking a second quarter of deceleration. Sales rose 20% to $715 million.
The stock rebounded 4% Thursday but a test of its 10-week moving average should be monitored. United Therapeutics cleared a proper buy point at 250.89 following Q1 earnings on May 1.
Marriott, meanwhile, crashed through its 50- and 200-day lines in heavy volume Wednesday and Thursday following results (EPS up 11% to $2.50, sales up 6%).
The stock has had a marvelous run since returning to the stock market last year following its sale by Japan-based investment firm Softbank. After a new IPO at $51 a share, Arm stock more than tripled at its peak.
Beyond The Stock Market Today
The yield on the U.S. Treasury 10-year bond plunged to 3.98%. Crude oil futures on the NYMEX was down 1% and traded at $77.06 a barrel.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
