The Nasdaq showed decent strength at the closing bell after a brief midday dip in the stock market today, led by such software giants as ServiceNow. Tesla stock rocketed higher for its biggest single-session gain in more than a decade.
IBD continued to keep its recommended exposure in stocks at the highest possible range of 80%-100%. Action overall has remained bullish since the Aug. 13 follow-through day.
A follow-through day often flags the beginning of a tradable rally. Not all follow-through days succeed. But IBD research has found that every major market bottom since 1900 began with a follow-through.
Stock Market Today: Will The Nasdaq Make New Highs?
The Nasdaq, closing the session at 18,415, rose nearly 0.8% and held remarkably near its session high of 18,435. In contrast, the Dow Jones Industrial Average lagged and spent virtually the entire session in mildly negative territory.
The Nasdaq is a 1.4% rally away from eclipsing its all-time peak of 18,671. The tech-enriched index headed into Friday's session with a slim loss of 0.4% for the week.
As seen in Thursday's General Market Indicators chart page, more than 43% of the Nasdaq composite's total market value continues to be driven by six tech stocks, including Microsoft (comprising 8.9% of the composite), Google and Waymo self-driving taxi operator Alphabet (at 5.7%), and Meta Platforms (4%).
Here's Why Microsoft Stock Is A Buy Again For Long-Term Investors
Stocks on the S&P 500 wavered as its early 0.4% rally reversed into a loss, but then it lifted back and ended with a small gain of 0.2%. At the session high of 5,817, the S&P held a stout 21.9% gain year-to-date. Defensive issues such as utilities cooled off. Utilities Select Sector SPDR, an unusual ETF holding and half-size position on Leaderboard, dropped nearly 0.7%. However, XLU remains in a slow yet steady uptrend.
XLU has also rallied more than 11% since its cleared a flat base with a 72.91 buy point on July 31-Aug. 1.
Meanwhile, among tech sector exchange traded funds, iShares Expanded Tech-Software halted a three-session losing streak, rising 1.1%. The ETF has bounced bullishly off its 21-day exponential moving average twice since late September.
Key Industries To Watch
Beyond Tesla and other automakers, medical supply, contract electronics manufacturing, managed care, specialty enterprise software and lodging stocks fared the best, up 3% or more on a price-weighted basis.
Check out the daily performance of all 197 IBD industry groups at IBD Data Tables.
Here's Why Tesla Is Stinging The Bears On Its Q3 Report
Still A Laggard Index In Stock Market Today
Small caps tried to end a five-session losing streak. The Russell 2000 rose nearly 0.6%, but those gains shrank to 0.2% by the session's end. On Wednesday, the Russell got bullish support during a test of its rising 50-day moving average.
At Thursday's high of 2,227, the Russell 2000 continued to lag large caps, rising 9.9% in 2024 so far.
Meanwhile, the Dow Jones index refused the join the party on the stock market today. The 30-stock blue-chip gauge initially sank more than 300 points. By the close, the Dow has trimmed those losses to around 140 points, or 0.3%.
Elsewhere, investors bought back government bonds. The yield on the key U.S. 10-year Treasury at one point fell 6 basis points to 4.18% before ending the session at 4.20%, according to CBOE data.
Gold futures for October delivery ramped up more than 0.7% to $2,734.90 an ounce. And crude oil backtracked 1% on the December-expiring contract to $70.07 a barrel. It dipped to as low as $69.77.
ServiceNow Earnings Review
ServiceNow, trading on the New York Stock Exchange, produced a follow-on buy point with its second rebound off the 10-week moving average. Ideally, it's best to buy shares as close to the 10-week line as possible and no more than 5% above. ServiceNow's 10-week moving average is currently just above 893; that means the stock is actionable up to around 938.
The business software giant originally broke out of a base at 806.52 in the final week of July. The stock got choppy amid a marketwide sell-off that ended on Aug. 5. Then, ServiceNow cruised back above the 806.52 proper buy point.
At one point, ServiceNow raced 7.9% higher in above-average turnover, thanks to a solid quarterly report. It maintained leadership in the stock market today as well as the enterprise software space. The leader in enterprise-level digital transformation technologies grew earnings 27% in the third quarter vs. a year earlier to $3.72 a share. Sales climbed 22% to $2.8 billion.
ServiceNow also announced Amit Zavery as its new president and new chief product officer. Zavery had worked previously at Oracle and Google's cloud computing business.
The 27% earnings lift was actually ServiceNow's smallest year-over-year increase in at least eight quarters. Earnings jumped 56% in the fourth quarter of 2022, then climbed 37%, 46%, 49%, 36%, 44% and 32% in the next six quarters prior to this week's news.
Tesla Beats Views, Shares Launch Higher
Software-related firms weren't the only ones bucking the Dow's weakness. Tesla soared on earnings news on the stock market today. The electric-vehicle leader and energy storage innovator moved closer to a trendline entry within its base near 260.
The electric-vehicle giant reported better-than-expected earnings for the third quarter. That, and bullish comments from Chief Executive Elon Musk, prompted subsequent price hikes from such Wall Street names as Goldman Sachs, Bank of America and Wells Fargo.
Tesla reversed a yearlong slide of declining earnings with a 9% gain to 72 cents a share. Revenue came in at $25.2 billion, slightly below forecasts.
Tesla's sharp upward move of nearly 22% enabled the stock to retake both its 50-day moving average and its 21-day exponential moving average. The stock is now moving up the right side of a cup with handle with a buy point at 264.86.
Meanwhile, Viking Therapeutics jumped more than 21% after providing details about a quadruple combination experimental treatment that could rival weight-loss drug giant Eli Lilly.
Viking Therapeutics catapulted 20% in volume running six times normal. The midcap, with an $8 billion market value, cleared an aggressive entry at 68.74. It is also trying to surpass stubborn upside resistance near 70. Rival Eli Lilly fell more than 1%.
Updated 2:19 p.m. ET
Stock Market Today: This Pharma Soars
Beaten-down West Pharmaceuticals barreled more than 17% higher in heavy trading. It tested resistance at the 200-day moving average and still has a lot of work to do before potentially setting up a strong breakout.
The maker of medicine and vaccine bottles, syringes and other health care products posted a 14% drop in third-quarter earnings. The Relative Strength Rating of 14 on a scale of 1 to 99 is still terrible but is likely to rise quickly.
CBOE Global Markets rose more than 1% in mildly below-average turnover. The options market is trying to break out of an eight-week flat base with a 216.14 buy point. Earnings are due Nov. 1.
CBOE has a stronger RS Rating of 79; the 3-month RS gauge, however, is also so-so at 73. In general, focus on those stocks that hold a Relative Strength Rating of 80 or higher.
Tech Runs Higher; Miner Skids
Among other individual names, Celestica, a key contract electronics maker, broke out and held on to bullish gains. It remained in the 5% buy zone from a handle entry at 64.56. Celestica is the IBD Stock Of The Day.
But gold miner Newmont tanked on quarterly results. Newmont, which had cleared a shallow seven-week flat base at 44.59 in early July, plunged nearly 14% in heavy turnover.
Third-quarter earnings soared 125% to 81 cents a share. Sales accelerated 85% to $4.61 billion. Still, earnings missed analyst estimates by a nickel, according to FactSet, and revenue of $4.61 billion in the third quarter came up short by $60 million.
The stock tripped below its 10-week moving average, a clear defensive sell signal. Also, on a daily chart, the loss is Newmont's largest on a single session since the July 5 breakout. This poses as an additional rule to lock in gains.
IBD Analysis: Will This Company Be Worth More Than Nvidia Next Year?
Updated 12:40 p.m. ET
Big Blue Gets A Black Eye
Within the Dow industrials, IBM gapped lower on a 5% rise in third-quarter earnings and fell more than 6%.
Notice on an IBM daily chart that the tech services and cloud computing titan may face a key test of support at its 50-day line. IBM shares have enjoyed a grand run in 2024, up as much as 45% for the year.
Weekly jobless claims came in at 227,000, well below the Econoday forecast of 247,000. The prior week's claims got revised slightly up to 242,000.
Updated 10:59 a.m. ET
Stock Market Today: Celestica Stands Out
Meanwhile, Celestica also stood out among bullish stocks in the stock market today with a jump of more than 17%. The stock roared out of a three-month base that showed several buy points, including a standard entry of 63.49 — that is, the left-side peak of its base. An early entry at 56.61, based on a near-term high seen on Aug. 15, was justified.
In recent days, Celestica added a downward-sloping handle, representing a final shakeout of uncommitted holders. That handle shows the highest buy point, at 64. From that handle entry, the 5% buy zone goes up to 67.20.
The tech company, which serves a host of industries, posted a 60% jump in third-quarter profit to $1.04 a share amid a 22% rise in revenue to $2.5 billion. Gross margin edged up to 10.7%, the highest in at least four quarters, according to MarketSurge data.
Celestica holds a best-possible Composite Rating of 99 from Investor's Business Daily.
Tesla Has Best Day In 11 Years; Beware These Huge Market Risks
This Stock Triggers A Sell Rule
On the downside in the stock market today, Carrier Global issued a defensive sell signal. The heating and cooling equipment firm dropped more than 7% and slashed through its fast-rising 50-day line. Volume already spiked more than 10 times the stock's average amount.
The sell-off cut the stock's gain from a recent breakout past a 70.09 buy point to just 5% from nearly 19%. Carrier's 3% profit boost in the third quarter on a 21% lift in the top line disappointed Wall Street. Growth investors generally want to see earnings rising at a faster rate than sales.
Elsewhere in the stock market today, Impinj, part of IBD's fabless semiconductor group, also sold off despite notching a strong quarter of growth. Earnings were 56 cents a share vs. a penny a year earlier, while revenue climbed 46% to $95.2 million.
Shares slumped 8% and nearly undercut the 50-day moving average. Impinj still holds a decent gain after clearing a base with a 181.88 buy point.
Please see more risers and decliners in unusual turnover within the stock market today at Stocks On The Move.
Assistant Markets Editor Russ Britt contributed to this story.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
