The Dow Jones Industrial Average closed lower on Tuesday as government bond yields spiked. Three shares, including Coin base (COIN), had mixed fortunes despite Cathie Wood buying more shares. Ali Baba (BABA) took a ride on a magic carpet while Apple (AAPL) and Microsoft (MSFT) fell. Micron technology (MU) revenue missed views.
A few notable stocks tried to break out despite the challenging action. Both CGI (GIB) and Sovos brands (SOVO) tested points of sale, without success.
Government bond yields continued to rise. The 10-year rate rose 3 basis points to 3.56%, while the 2-year rate rose 10 basis points to 4.06%. The yield curve remains inverted, traditionally an indicator of a recession.
Energy stocks were boosted as West Texas Intermediate crude rose 0.8% to more than $73 a barrel. It continues to move away from the recent lows.
Nasdaq Falls, IBD 50 delays
The Nasdaq closed out the day’s lows, but was still down 0.5%. EV stock Bright (LCID) underperformed here with a dip of 7.2%.
The benchmark S&P 500 also fell, despite rallying to the close. It fell by 0.2%. It lags behind the 50-day moving average. human (HUM) was a laggard here with a 4.7% slip.
The S&P 500 sectors ended the session mixed, with energy and industrials posting the best gains. Communication services, health and technology suffered.
Small caps hardly fell and the Russell 2000 fell 0.1%. Growth stocks suffered the most, with the Innovator IBD 50 ETF (FFTY) falling 1.5%.
Dow Jones Today: Microsoft, Apple Stock Fall Again
The Dow Jones Industrials also fell, albeit not as sharply as the other major indices. It closed less than 40 points, or 0.1%.
Microsoft fought back towards the close, but still fell 0.4% as Big Tech stocks continued to parlay some recent gains. It lost ground on an entry of 276.86, MarketSmith’s analysis shows.
Apple also struggled, losing 0.4%. Despite this, it remains clear of its 50-day and 200-day moving averages. It also managed to end the session above the 10-day line.
American Express (AXP) was the worst stock on the Dow Jones today, as it fell 2.4%. Walgreens Boots Alliance (WBA) led the pack with a 2.7% gain.
These stocks are struggling despite Cathie Wood’s purchases
Famed money manager Cathie Wood is never afraid to buy on the dip, but the strategy had three new buys on Tuesday with mixed luck.
Cryptocurrency shares Coinbase moved higher, gaining 0.8%. It is trading near the 50-day moving average. Wood’s signature ARK Innovation ETF (ARKK) gained more than 32,000 shares on Monday.
It came as bitcoin, the best-known digital currency of all, also turned higher. It also rose 0.8% and continues to rise nearly 65% this year.
Teladoc Health (TDOC) was down 1%, though it slightly closed the day’s lows. It is trading below its major moving averages. ARKK added more than 18,000 shares.
Joby Aviation (JOBY) was also down 1%, but also outside of lows. The ARK Autonomous Technology & Robotics ETF (ARKQ) bought 448,000 shares. This cheap share does not meet the CAN SLIM criteria.
Alibaba Stock goes on Magic Carpet Ride
BABA shares soared on news that it is splitting itself into six separate business groups. Investors seem excited that each of these groups could potentially go public to raise outside funding.
The six are: Cloud Intelligence, Cloud Commerce, Local Services, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment.
Each group will have its own board of directors and CEO. The move is “designed to unlock shareholder value and promote market competitiveness,” according to a statement from the company.
The Chinese stock shot up 14.3%, taking investors on a flying carpet. Alibaba shares are up 7% so far in 2023.
Due profit in microns; MU Stock falls
Chip giant Micron technology (MU) moved slightly higher following the earnings soon after.
The stock closed lower in the report, falling about 1%. But in extended trading, it was up nearly 2%. It tests the support at the 50-day moving average. The memory chip maker is up nearly 18% so far through 2023.
According to Zacks Investment Research, earnings per share in microns are down from $2.14 last year to a loss of 67 cents this year. Revenue is down 52% to $3.76 billion.
The Boise, Idaho-based company lost an adjusted $1.91 cents per share on $3.69 billion in revenue.
Boise, Idaho-based Micron makes two types of memory chips: DRAM and NAND. DRAM chips act as the main memory in PCs, servers and other devices, working closely with central processing units. NAND flash chips provide longer term data storage.
Outside of Dow Jones: These stocks are testing entries
With the stock market currently in a correction, now is the time to add to someone’s watchlist instead of buying stocks. Every purchase now carries an additional risk.
Still, IT outsourcing plays a role CGI (GIB) briefly clears a flat-base entry of 94.10. It has since fallen below this level. The overall performance here is strong, with the stock holding an IBD Composite Rating of 91 out of 99.
Play packaged food Sovos brands (SOVO) saw its relative strength line hit new highs as it tested a buy point of 16.93 in a platter base. It closed below that level. This is a first stage pattern. Early stage bases are more likely to succeed.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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