June 13, 2024
Stock Market

Stock Market Today: Dow Jones Trims Losses As Small Caps Boost Gains; Salesforce, Nutanix, Kohl’s Trigger Sell Signals As MicroStrategy Sets Up


Stocks traded mixed Thursday, but losses thinned as Dow component Salesforce (CRM) led a fall in techs and large caps. Smaller issues rebounded after sharp losses in Wednesday’s session. And one of Cathie Wood’s biggest holdings in her firm’s flagship fund lost a third of its value on the stock market today after offering a weak outlook.




X



The Nasdaq composite traded 0.5% lower in recent action, paring some losses. Trading near 16,845, it’s still only 1% below its all-time high of 17,032. The tech-centered index holds a 12.4% gain year to date, making it a leader among indexes.

The S&P 500 kept losses modest at 0.2%. But the Russell 2000 rallied more than 1.3% during afternoon trading. It had sunk in five of the prior six sessions.

Meanwhile, the Dow Jones Industrial Average had initially fallen more 440 points before cutting the deficit to 270 points, or 0.7%. The blue-chip index dropped to 38,000 early in the session. Keep in mind, however, that the Dow is a price-weighted index. Thus, the loss of more than 50 points by Salesforce made a disproportionate impact on the 30-stock index.

Salesforce Selling Whacks Enterprise Sector

Salesforce reported a beat on the bottom line, earning $2.44 a share in the April-ended fiscal first quarter. That beat Wall Street’s forecast by 7 cents. However, while sales rose 11% to $9.13 billion, it came roughly $20 million short of views. Plus, the cloud-based business software titan issued a soft outlook despite heightened expectations that artificial intelligence would drive further strong growth.

Shares crashed more than 21%. Salesforce’s woes threw cold water on the entire sector.

Enterprise software innovator Nutanix (NTNX) plunged 22% in massive volume on the stock market today and traded near 57, well below its 50-day moving average. First-quarter earnings jumped 189% to $1.04 a share on a 17% lift in sales to $524.6 million. But Nutanix saw second-quarter revenue at $530 million to $540 million, below views for $546.1 million.

The stock triggered a defensive sell signal by gapping below its 50-day line. The midcap growth stock also undercut the low of its latest base.

Further, the iShares Expanded Tech-Software (IGV) exchange traded fund gapped down at the start and fell 4.8% in nearly quadruple average volume. The popular technology sector ETF is trying to hold support at the key long-term 200-day moving average. IGV, at 78.15, is down more than 8% in Q2 so far.

Some Dow Stocks Rally

While Salesforce joined five more Dow components to drop one point or more, at least eight others rallied.

They included McDonald’s (MCD), currently a short-sale position in IBD Leaderboard, and Caterpillar (CAT), one of the leaders in the Dow industrials with a Relative Strength Rating of 88, and beleaguered shoe giant Nike (NKE), whose RS Rating is 19.

Like McDonald’s, Caterpillar is priced in the triple digits. Caterpillar is forming a new base after climbing 30% from a breakout point at 290.88. The construction and mining gear titan broke out in January.

Cathie Wood Major Holding Plummets

Outside the Dow, UiPath (PATH), a developer of productivity-boosting enterprise software bots, plummeted more than 34% in recent trades to just about 12. It dropped to 11.81 at one point on the stock market today, touching levels not seen since January 2023.

UiPath initially ushered in a key sell signal in February, when it fell 7% from a buy point of 26.53 in a base formed from Dec. 19 to Feb. 9. The stock’s breakout on Feb. 10 lasted all of two days, then shares reversed lower.

According to the website for Cathie Wood’s ARK Funds, UiPath held a 5.5% weighting in the firm’s ARK Innovation (ARKK). It’s the fifth-largest holding in the exchange traded fund.

UiPath reported first-quarter adjusted profit of 13 cents a share, a penny above FactSet’s forecast. However, the company is now expecting fiscal 2025 sales of $1.41 billion, well below its previous estimate of roughly $1.56 billion. UiPath added that co-founder Daniel Dines would return as the company’s chief executive.


Among The 4 Stocks Nvidia Owns, This One Is Up 132% So Far In 2024


Stock Market Today: Bitcoin Moves Up

As the Nasdaq made all-time highs earlier in the week, IBD has held the suggested investment exposure level at 60%-80%. Please read this Big Picture for more details.

Meanwhile, investors are returning to the Treasury bond market. The yield on the benchmark 10-year bond fell 7 basis points to 4.55% after rising more than 15 basis points the prior two days.

On Thursday, the market absorbed a downward revision in real U.S. GDP output to 1.3% in the first quarter of this year, down from 1.6%. Bill Adams, chief economist at Comerica Bank in Dallas, commented that the revision was “no surprise after the April retail sales report made downward revisions to consumer spending in February and March.”

On Friday before the market open, watch for the key Personal Consumption Expenditures price index which will provide a reading on April inflation. Econoday forecasts the PCE will rise 2.7% year over year and core PCE will climb 2.8% vs. a year earlier. Both figures would reflect no change from year-over-year increases in March. The Federal Reserve seeks a long-term inflation rate of 2%.

Elsewhere, bitcoin owner MicroStrategy (MSTR) outperformed the stock market today, gaining 3% early, but gains faded some. MicroStrategy has been building a cup with handle that shows a potential breakout point at 1,740.

Spot bitcoin ETF ProShares Bitcoin Strategy (BITO) rose more than 3%. Bitcoin jumped 3% to near $69,400.


Leading IBD 50 Stocks To Watch Right Now


Earnings Movers

Kohl’s (KSS) cratered and also led the downside in the stock market today after posting a surprise net loss of 24 cents a share in the latest quarter. Capital IQ was looking for a net profit of 7 cents. The discount retailer also trimmed its full-year outlook.

Kohl’s shares fell 24% as volume zoomed 10 times normal levels. Back in early April, the stock made a feeble breakout attempt at 29.45 and quickly fell 7% from that entry, delivering a defensive sell signal well before Thursday’s earnings news.

Pure Storage (PSTG) rose 8% at one point and posted all-time highs on stronger earnings and revenue that beat expectations. In the afternoon, that gain shrank to slightly more than 1%.

The stock briefly hit the 20% profit sell rule after breaking out of a double bottom at 55.09 earlier in May. Demand for artificial intelligence has boosted the firm’s results as earnings quadrupled to 32 cents a share. Revenue grew 18% to $693.5 million.

Stock Market Today: Foot Locker Sprints Higher

Among retail and consumer-spending names in the stock market today, Foot Locker (FL) jumped more than 28% at one point and hit a session high 29.72. Shares were up 18% in recent action and now are forming a fresh base.

The athletic shoes retail chain reported a 69% plunge in April-quarter profit as sales dipped 3% to $1.88 billion.

However, Foot Locker CEO Mary Dillon noted the company saw more customers willing to pay full price for certain brands. Also, the firm’s same-store sales dropped 1%, less than expected. Prior to Foot Locker, Dillon was CEO of Ulta Beauty (ULTA), a former big stock market winner.

Watch for key quarterly reports after the close of the stock market today by Dell Technologies (DELL) and Marvell Technology (MRVL).

According to IBD Stock Checkup, Dell sports the third highest Composite Rating within the computer hardware industry group, at 87 on a scale of one to 99. In general, focus on growth stocks that hold a 90 Composite Rating or higher.

That said, Dell has performed well since it cleared a narrow double-bottom base with a 70.77 proper buy point on Nov. 6. The stock has ramped up 140% and made new highs for weeks. At this point, a potential pullback to the 10-week moving average could deliver a follow-on buy opportunity.

Please follow David Chung on X/Twitter: @saitochung and @IBD_DChung

YOU MIGHT ALSO LIKE:

Inside IBD Big Cap 20

Why The 21-Day Exponential Moving Average Matters

Here’s The Latest IBD Podcast

The Current IBD Long-Term Leaders





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

SUBSCRIBE TO OUR NEWSLETTER

Get our latest downloads and information first.
Complete the form below to subscribe to our weekly newsletter.


100% secure your website.