July 20, 2024

Dow Jones Rallies As Nike Plunges On These Worries; Tesla Stock Leads Magnificent Seven

The Dow Jones Industrial Average closed sharply higher as stocks recouped the bulk of Wednesday’s losses. Nike (NKE) plunged late following a disappointing earnings report. Tesla (TSLA) led the Magnificent Seven higher, but Apple (AAPL) lagged.


There was a dearth of breakouts, but a few stocks closed in on entries. Carnival (CCL) jumped toward an entry after earnings while Southern Copper (SCCO) and ASML (ASML) also neared new highs.

Nasdaq Shines, Small Caps Outperform

The Nasdaq composite fared best out of the major indexes as it closed with a gain of 1.3%. Micron Technology (MU) outperformed here as it popped 8.6%. It beat earnings views and served up a sunny outlook. It is closing in on its 20% profit goal from a 72.31 entry, MarketSmith analysis shows.

The benchmark S&P 500 also flexed its muscles after yesterday’s reversal, jumping 1%. Paramount Global (PARA) and Warner Bros. Discovery (WBD) both lagged amid merger talk.

The S&P 500 sectors all closed in the green. Consumer discretionary and health care fared best in the stock market today. Energy and utilities turned in the slimmest gains.

Small caps outperformed, with the Russell 2000 rising 1.7%. Growth stocks also punished the bears, with the Innovator IBD 50 ETF (FFTY) jumping 1.9%.

Dow Jones Today: Nike Earnings Report Disappoints

The Dow Jones rallied into the close, ending the session up 322 points. This equates to a 0.9% lift.

Intel (INTC) was benefiting from the broad boost to semiconductor stocks. It powered its way to a 2.9% gain.

Salesforce (CRM) and American Express (AXP) were other outperformers on the much-watched index. CRM rose 2.7% while AXP popped 2.3%.

Nike stock ended the session up 0.9% but plunged over 5% after hours following its earnings report It is trading below a cup base entry of 131.31, MarketSmith analysis shows.

Nike earnings per share came in at $1.03, better than views, but revenue of $13.39 billion was light. The athletic apparel giant also unveiled a plan to slash $2 billion in costs over the next three years.

Matthew Friend, chief financial officer, indicated a weak sales outlook. “As we look ahead to a softer second-half revenue outlook, we remain focused on strong gross margin execution and disciplined cost management,” he said.

Analysts had seen Nike earnings slipping just over 1% to 84 cents per share. Revenue was expected to rise 0.6% to $13.4 billion, according to Zacks Investment Research.

Magnificent Seven: Tesla Leads, Apple Falls On Watch Move

Nearly all the so-called Magnificent Seven stocks rose Thursday.

Tesla stock led the way as it rose 3%. It has been holding above its short-term and major moving averages in recent sessions. TSLA remains below a second-stage double-bottom base that is offering up a 278.98 buy point.

AI stock Nvidia (NVDA) had a fast close, surging 1.8%. The Leaderboard stock is in a buy zone above a 476.09 entry. Meta Platforms (META) rose 1.4% while Google parent Alphabet (GOOGL) rose 1.5%.

E-commerce giant Amazon.com (AMZN) followed closely behind with a rise of 1.1%. It closed above its buy zone from a 145.86 entry.

The two Big Tech members of that club that also are on the Dow Jones index had mixed fortunes. Microsoft (MSFT) turned in a gain of 0.8% and remains in a buy zone above a 366.78 entry.

Its old rival Apple (AAPL) lagged with a decline of 0.1%. Despite this, it continues to trade in a buy zone above a 192.93 cup-with-handle entry.

Outside Dow Jones: Carnival Earnings Lift Stock Near Entry

Breakouts were thin on the ground, but a handful of stocks made progress toward potential buy points.

Carnival stock popped 6.2% after earnings, and is closing in on a cup base buy point of 19.55.

The stock was boosted after management said it is seeing “strong booking momentum.” Carnival announced a fourth-quarter loss of 7 cents per share, compared to an 85-cent loss a year ago, with revenue growing 41% to $5.4 billion. This was a top and bottom line beat.

Southern Copper rose 3.2% as it closes in on its own cup-base entry of 87.59. This is a first-stage pattern, a bonus. Overall performance is strong here, reflected in its IBD Composite Rating of 92 out of 99.

Finally, ASML got closer to a cup-base entry of 771.98 on its weekly chart after rising 3.5%. This offers a higher buy point after it got extended from a daily chart cup-with-handle entry.

The chip equipment play is also strong all around. Earnings are particularly impressive, with its EPS Rating a mighty 98 out of 99.

Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.


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