Indexes sold off into the close Wednesday, leaving the Nasdaq with its worst day in almost two months and other indexes with substantial losses as the stock market today absorbed dozens of earnings reports.
The Nasdaq composite closed nearly 2.8% lower and undercut the 21-day exponential moving average. The Nasdaq 100 sank 2.4%. The S&P 500 slid 1.9% while the Dow Jones Industrial Average lost 0.9%.
The Dow closed below its 50-day moving average. The S&P closed at the 50-day line while the Nasdaq ended slightly above the 50-day average.
Small caps fell sharply also, with the Russell 2000 off 1.6% and also testing its 50-day line.
Volume rose on the NYSE but fell on the Nasdaq from Wednesday's totals, according to unconfirmed data. Declining stocks topped advancers by about 3-to-1 on the Nasdaq and by 2-to-1 on the NYSE, according to FactSet.
In an analysis of IBD's 197 industry groups, the fabless semiconductor group performed worst with an 8.6% drubbing on a price-weighted basis. Household appliance, computer hardware, nonalcoholic beverage and consumer loan stocks also fell sharply, each sinking 4% or more.
In a macabre note, the best performer on Halloween turned out to be funeral services, a tiny group with just three companies. The group rallied 7.8%, followed by ship transport (up 6.8%), travel booking (up 4.3%, thanks to Booking) and electric utilities (up 2.6%). Booking reported a 16% boost in third-quarter earnings, continuing its long streak of double-digit bottom-line growth. The Dow Jones utility average rose 0.8% to halt a two-day selling skid. At 1,036, the Dow utilities are trying to rebound back above the 50-day moving average. The index is down 2.7% for the quarter.
In the funeral group, Service International rose 7% to 81.65 to clear a six-week flat base with an 81.32 proper buy point. Volume jumped 159% above the stock's 50-day average of 826,000 shares per day. The funeral home and cemetery operator giant reported a 1% rise in third-quarter profit to 79 cents a share on a 1% revenue increase to $1.01 billion.
SCI garners a decent 81 Relative Strength Rating on a scale of 1 to 99.
A Microsoft Mauling
Meta Platforms got slammed for a loss of about 4%. Shares closed below the 21-day exponential moving average but held above the 50-day line. Microsoft gapped down about 6% in heavy volume, and pierced its 50-day moving average.
Yet even in the tech sector, companies such as Twilio (up 14% in heavy volume), GoDaddy (up 3%) and Paycom (up 21%) defied the sell-off after dispensing promising quarterly results and outlooks.
In particular, GoDaddy triggered a breakout, spurting past a 166.17 buy point in a shallow cup with handle.
The 5% buy zone from the breakout point goes up to 174.48; therefore, the website hosting firm is in buy range. Twilio, which posted a 76% jump in earnings per share, vaulted out of a long consolidation with a 78.16 entry. And Paycom, which saw an 11% revenue increase in Q3 to $452 million, cleared a long bottoming base with a 207.99 buy point.
In Other Key Markets
Investors are bracing for a new U.S. nonfarm payrolls report early Friday. Meanwhile, the yield on the 10-year U.S. Treasury note edged up one basis point to 4.28%. That's still significantly below a multiyear peak of 4.99%.
Crude oil futures for December delivery rose 2.7% to $70.49 a barrel. Gold, however, lost 1.5% to $2,758 an ounce.
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Major Earnings Movers
Highly rated stocks such as insurance sector leader Ryan Specialty whipsawed traders. Shares fell severely below the 10-week moving average after delivering a 28% Q3 profit increase to 41 cents a share. Revenue rose 20% to $604.7 million.
But the stock cut its loss to less than 2% and rebounded back above that technical level at midday. Ryan Specialty has made solid progress since it cleared a cup with handle at 57.09 in June.
Also, Ryan Specialty has erased gains from the most recent breakout at 69.03, delivering a sell signal.
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SharkNinja, a Leaderboard model portfolio stock, gapped down more than 11% and dived below its 10-week moving average, causing a sell signal. SharkNinja beat top and bottom-line forecasts but got bloodied by its soft outlook for the important holiday-spending quarter. The stock joined Leaderboard as an earnings options play with a 77.50 call strike.
Duolingo, which on Wednesday cleared a narrow base that had the appearance of a flat base, ducked beneath its 297.56 buy point. Shares fell nearly 3%.
However, Roblox soared more than 19% on its Q3 results and cleared prior resistance near 47.
And GoDaddy raced past a shallow cup with handle that displayed a 166.17 entry point. Shares rose 5% in fast turnover after the website hosting firm beefed up its full-year sales outlook.
Among IBD's industry groups, banking stocks held up well. Related ETFs such as SPDR S&P Regional Bank edged just 0.1% lower amid new data that signaled the U.S. economy remains robust. But market breadth weakened. Losers topped winners by a 3-1 ratio on the Nasdaq. On the NYSE, decliners outpaced gainers by more than 5-to-2.
Personal income rose 0.3% in September, below the Econoday forecast for a 0.4% increase. Spending beat views, however, up 0.5%. The PCE inflation index met expectations, up 0.2% month on month and 2.1% higher vs. a year ago. Core PCE met views with a 0.3% rise vs. August. But the 2.7% year-over-year rise edged above economists' view of 2.6%.
Among the megacap techs in the stock market today, Meta Platforms fell more than 2% but held bullishly above the rising 50-day moving average. The social media platform notched another quarter of double-digit earnings and sales gains, but it is ramping up AI spending.
Meta has staged decent gains since recent breakouts. Shares have risen more than 63% for the year.
Microsoft struggled more than Meta. Shares fell more than 5% after the company reported solid results late Wednesday. But the cloud computing and enterprise software innovator gave a disappointing sales outlook for the December-ending quarter.
Together, Meta and Microsoft make up 13% of the total market value of the Nasdaq.
After Dropping Hard, Is Microsoft Stock A Buy Now?
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