Indexes reversed lower while megacap techs saw mixed fortunes on the first day of August. Meta Platforms (META) remained a true leader in the stock market today, rising 9% on strong second-quarter results and an ambitious plan to fuel further growth with AI technology. But chip designer Arm (ARM) suffered a more-than-12% pounding on earnings.
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Techs Lead On AI, Rate-Cut Optimism; Arista Networks, Dycom, TransDigm In Focus
Arm has 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.
At around 10:30 a.m. ET, the Nasdaq composite lost early gains as its 0.9% gain turned into a 0.1% loss. The S&P 500, which was up 0.5%, also reversed lower 0.1%.
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.
Stock Market Today
The Dow Jones Industrial Average was down 0.6% in the stock market today. The Russell 2000 headed 1.4% lower after surging an amazing 10% in the month of July.
Volume on the NYSE and Nasdaq was running lighter vs. the same time on Wednesday, according to the MarketSurge homepage.
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.
Meanwhile, restaurant play Shake Shack (SHAK) 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, which offers the most timely opportunity to buy shares before a potential big price run.
Three Growth Stocks Showing Troubling Action
On the negative side in the stock market today, Marriott (MAR) and United Therapeutics (UTHR) 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 2% 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%).
Going back to Arm, the UK-based semiconductor giant dropped nearly 12% last month after its outlook disappointed investors in the stock market today.
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 4%, according to Cboe data. It hit the lowest levels since February ahead of Friday’s report on July nonfarm payrolls.
Crude oil futures on the NYMEX was down nearly 1% after rallying more than 4% on Wednesday.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
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