The Dow Jones Industrial Average backed off after touching a record high Monday while the S&P 500 and Nasdaq fell. Temu-parent PDD (PDD) tumbled following earnings. And Nvidia (NVDA) was the subject of a bullish analyst call while Shift4 Payments (FOUR) tested an entry on the stock market today.
↑ X NOW PLAYING Nvidia Earnings Are A Key Test For The Stock Market Rally. Here’s What To Expect.
The Dow saw initial gains fade but remained up 0.1%. The blue-chip index backed off after hitting fresh heights. It also sits above its short-term moving averages and is nearly 4% above its 50-day line.
The Nasdaq composite lagged, though, falling nearly 1%. Warner Bros. Discovery (WBD) fared well here as it rose more than 4%. Arm (ARM) and Super Micro Computer (SMCI) were among the poorest performers in the Nasdaq. Super Micro fell nearly 7% while Arm dropped about 5%.
The S&P 500 reversed lower, falling 0.4%. First Solar (FSLR) was one of the best performers here, rising roughly 5%. Tesla (TSLA) was a laggard, falling more than 3%.
The S&P 500 sectors were mixed. Energy and consumer staples made the best gains while consumer services and technology lagged.
Small caps saw early gains mostly evaporate, though the Russell 2000 remained up slightly. Growth stocks were getting hit hard though, with the Innovator IBD 50 (FFTY) exchange traded fund falling more than 1%.
Stock Market Today: IBD Sector Leader Tests Entry
With the market back in an uptrend it is a good time to be buying stocks and raising market exposure.
One noteworthy name that attempted to make a a bullish move on the stock market today is Shift4 Payments.
It briefly cleared a cup-with-handle base entry of 83.64, though it has slipped back below this level.
Earnings have grown by an average of 32% over the past three quarters. Per-share earnings also accelerated in the most recent quarter.
Wall Street expects further improvement, with earnings per share seen swelling 33% this year before growing another 29% in 2025, according to MarketSurge data.
The stock is a member of the IBD Sector Leaders list, one of Investor’s Business Daily’s most rigorous and powerful screens. It is an institutional favorite, with 72% of shares currently being held by funds.
Nvidia Stock Falls Despite Bullish Call
The stock market has a key hurdle to clear this week when Nvidia earnings drop. The firm posts results after the close Wednesday.
Ahead of the report, Morgan Stanley reiterated its overweight rating of the stock. It also has a price target of 144. It said the firm remains a “top pick” and that “regardless of expectations issues,” it is still impressed by the firm’s strong momentum.
Despite the call Nvidia stock fell more than 2% on the stock market today. However it was off lows for the day and remains above its 50-day moving average.
Nvidia has been a key beneficiary of the artificial intelligence craze. It has seen earnings soar by an average of 500% over the past three quarters. Shares are in a new base that offers a 140.76 buy point, MarketSurge analysis shows.
The AI stock is a member of the IBD Leaderboard list of top stocks. Nvidia is up nearly 160% in 2024 and has jumped more than 18% in the past four weeks.
10:39 a.m. ET
Durable Goods Orders Pop
New data from the Commerce Department showed orders for durable goods surged by 9.9% month over month in July. This was well clear of economist expectations for a 4% lift and a reversal of the prior month’s revised downwardly 6.9% slump.
Orders for new cars and trucks were up 34.8% last month. This was a sharp rebound from June’s 20.6% fall.
When the volatile transportation sector was excluded, orders rose 0.2% last month compared to a 0.1% gain in June. Computers and electronics orders fell 0.7% while machinery orders held steady.
Meanwhile, shipments of core goods, which feeds into GDP, fell 0.4% in July.
Stock Market Today: Temu Parent PDD Hammered
It has been a tough year so far for China stocks, with the iShares MSCI China ETF (MCHI) up just over 4% so far in 2024.
And one of the communist country’s big success stories was getting hammered on the stock today following disappointing results. Earnings beat views, but second-quarter revenue of 97.06 billion yuan missed Wall Street expectations even as the top line rose sharply year over year.
Management also said increasing competition and investment spending is likely to weigh on results. Co-Chief Executive Lei Chen said the firm is “prepared to accept short-term sacrifices and potential decline in profitability.”
PDD flashed multiple sell signals, dropping through the 50-day moving average and its 200-day line, amid a nearly 25% dip.
PDD Holdings is a China-based online retailer that operates the online marketplace Temu, which has been steadily gaining market share from Amazon.com (AMZN) in the U.S. since its launch in 2022.
The stock had also been a member of the IBD Sector Leaders list. However, it dropped off the list Friday amid a sharp dip. It looks unlikely to return any time soon.
SolarEdge Surges On CEO Exit
SolarEdge (SEDG) popped before the open on the stock market today on the announcement Zvi Lando has stepped down as its CEO. However, it reversed lower in opening trade, an initial jump giving way to a drop of around 5%. The stock holds an abysmal IBD Composite Rating of 2 out of 99.
The stock has been in free fall this year, and is now down more than 71% so far in 2024. Election uncertainty and higher interest rates have weighed on solar stocks.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
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