BREAKING: Market Mixed After Late Reversal
The Dow Jones Industrial Average fell as Cisco (CSCO) plunged on earnings. Alphabet (GOOGL) skidded amid a bipartisan bill to break up the ad business of Google. Warren Buffett stock BYD (BYDDF) retook a key level.
Target (TGT) continued to plunge despite encouraging earnings from BJs Wholesale (BJ). Meanwhile, utility stock NRG Energy (NRG) managed to pass a buy point, while Atkore (ATKR) is a name worth tracking as it trades tightly.
Volume was up on both the Nasdaq and the New York Stock Exchange compared with the same time Wednesday.
The yield on the benchmark 10-year Treasury note slid 3 basis points to 2.86%. Oil reversed higher, with West Texas Intermediate crude rising 2.5% to over $112 per barrel.
Indexes gave up their gains late amid a late sell-off. The Nasdaq closed down 0.3%. Datadog (DDOG) was a standout as it rose 9.6%.
The S&P 500 also reversed lower, giving up 0.6 0.2%. Synopsys (SNPS) was the top performer here, rising more than 10% after its earnings report.
The S&P sectors closed mostly negative. Materials was the best performer while consumer staples had the worst day.
Small caps stood out by muscling higher, though it closed off highs. The Russell 2000 rose 0.1%.
Growth stocks were battered lower by the bears. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, ended up closing down 0.2%.
The Dow Jones Industrial Average fared worst out of the indexes. It gave up more than 200 points as it fell 0.8%.
Cisco was the major laggard, plunging 13.7% following poor results. The Big Tech was hammered on mixed April-quarter results and gave weak guidance. Management blamed China’s Covid lockdown for worsening supply chain issues. It also said results were impacted by the Russia-Ukraine war.
Cisco is on track for its worst day since Feb. 10, 2011, when it fell 14.2%, according to Dow Jones Market Data.
Apple, which has major China exposure, was another laggard. It closed near session lows as it fell 2.5%. AAPL stock is losing further ground on its 50-day and 200-day moving averages, MarketSmith analysis shows.
On the flip side, Home Depot (HD) was faring best on the Dow Jones today. The home improvement giant was up nearly 2%.
Alphabet was giving up ground following the introduction of legislation that would force the breakup of Google’s advertising business.
Utah Republican Sen. Mike Lee introduced the bill, which was co-sponsored by fellow GOP member Ted Cruz and Democrats Richard Blumenthal and Amy Klobuchar.
The Competition and Transparency in Digital Advertising Act would ban firms that process over $20 billion in digital ad transactions per year in participating in more than one part of the digital advertising ecosystem.
Google is a dominant player in many areas of online advertising. If the legislation gets approved, Google would have to exit some of these areas. GOOGL stock ended the day near session lows as it fell 1.4%.
While he is known for value investing, the definition of a Warren Buffett stock has evolved in recent years.
And EV play BYD managed to retake a key level Thursday amid a rally in this area. It ended the session up 4.2%.
The stock pulled clear of its 200-day moving average, which sits higher than the 50-day line.
In addition, it is closing in on a cup base buy point of 41.34, according to MarketSmith analysis.
Other EV stocks were also having a strong day. Lucid (LCID) jumped 11% while Rivian Automotive (RIVN) ended the day with a gain of 8.5%.
Tesla (TSLA) stood out in a bad way by closing fractionally negative.
The sell-off in Target stock continued following the retailer’s disastrous earnings report yesterday.
TGT stock fell 5.1% in a high-volume move. It sits more than 30% below its 50-day moving average. It comes after the stock fell 24.9% in mammoth volume Wednesday.
BJ’s Wholesale Club (BJ) surged 7.4% after the company beat analyst views on both the top and bottom lines. The chain posted EPS of 87 cents and revenue of $4.5 billion. This easily bested Wall Street expectations of 72 cents per share on sales of $4.24 billion.
Department store giant Kohl’s (KSS) rose after CEO Michelle Gass said she expects final and fully financed bids from potential buyers in the coming weeks. It posted a 4.4% gain.
This was enough to override concerns after it missed EPS estimates for Q1 while also slashing its profit and revenue guidance for the year. EPS of 11 cents was well short of analyst expectations for adjusted earnings of 69 cents a share. Same-store sales also fell 5.2%, while Wall Street had expected growth of 0.5%.
NRG Energy showed resolve by attempting a breakout despite the broader market travails.
The diversified utilities play is currently sitting in a buy zone above a 46.20 entry. Overall performance is very strong, with its RS Rating of 95 putting it in the top 5% of stocks in this metric.
Meanwhile, Atkore is a stock worth keeping tabs on as it continues to trade tightly. It has been holding up well despite flashing a sell signal from its most recent double-bottom pattern. If it can go on to form another base, it would offer a buying opportunity. The stock was added to the Leaderboard Watchlist Wednesday.
Atkore makes electrical conduits, cable management systems, metal framing and related products used in commercial construction projects.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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5:41 AM ET Another week of big losses as Wall Street adjusts to a “hard” reality. Tesla broke decisively, but it wasn’t alone.
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