The Dow Jones Industrial Average slipped as Treasury yields spiked. A trio of stocks, including Coinbase (COIN), were mixed despite Cathie Wood buying shares. Alibaba (BABA) went on a magic carpet ride while Apple (AAPL) and Microsoft (MSFT) fell. Micron Technology (MU) earnings missed views.
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A couple of noteworthy stocks attempted breakouts despite the challenging action. Both CGI (GIB) and Sovos Brands (SOVO) tested buy points, with no success.
Treasury yields continued to rise. The 10-year yield rose 3 basis points to 3.56% while the two-year yield spiked 10 basis points to 4.06%. The yield curve remains inverted, traditionally an indicator of a recession.
Energy stocks got a boost as West Texas Intermediate crude rose 0.8% to more than $73 per barrel. It is continuing to move away from recent lows.
Nasdaq Falls, IBD 50 Lags
The Nasdaq closed off lows for the day but still fell 0.5%. EV stock Lucid (LCID) underperformed here with a dip of 7.2%.
The benchmark S&P 500 also fell despite rallying into the close. It fell 0.2%. It continues to lag the 50-day moving average. Humana (HUM) was a laggard here as it skidded 4.7%.
The S&P 500 sectors finished the session mixed, with energy and industrials making the best gains. Communications services, health and technology suffered.
Small caps barely fell, with the Russell 2000 dipping 0.1%. Growth stocks struggled the most, with the Innovator IBD 50 ETF (FFTY) down 1.5%.
Dow Jones Today: Microsoft, Apple Stock Fall Again
The Dow Jones industrials also slipped, though not as sharply as the other major indexes. It closed down less than 40 points, or 0.1%.
Microsoft fought back heading into the close, but still slid 0.4% as Big Tech stocks continued to cede some recent gains. It lost ground on a 276.86 entry, MarketSmith analysis shows.
Apple also toiled, easing 0.4%. Despite this, it remains clear of its 50-day and 200-day moving averages. It also managed to end the session above its 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 upside with a gain of 2.7%.
These Stocks Struggle Despite Cathie Wood Buys
Famed money manager Cathie Wood is never afraid to buy on the dip, but the strategy had mixed luck for three new buys Tuesday.
Cryptocurrency stock Coinbase reversed higher, gaining 0.8%. It is trading near the 50-day moving average. Wood’s signature ARK Innovation ETF (ARKK) snapped up more than 32,000 shares Monday.
It came as bitcoin, the most famous digital currency of all, also reversed higher. It also rose 0.8% and remains up nearly 65% for the year.
Teladoc Health (TDOC) fell 1%, though it closed slightly off the day’s lows. It is trading below its major moving averages. ARKK added more than 18,000 shares.
Joby Aviation (JOBY) also fell 1%, though also off lows. The ARK Autonomous Technology & Robotics ETF (ARKQ) bought 448,000 shares. This cheap stock does not meet CAN SLIM criteria.
Alibaba Stock Goes On Magic Carpet Ride
BABA stock soared on news it is splitting itself into six separate business groups. Investors seem excited by the fact 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 foster market competitiveness,” according to a statement from the company.
The China stock rocketed 14.3%, taking investors on a magic carpet ride in the process. Alibaba stock is now up 7% so far in 2023.
Micron Earnings Miss; MU Stock Up Late
Chip giant Micron Technology (MU) inched higher after the close following earnings.
The stock closed lower heading into its report, sliding about 1%. But in extended trading it was up almost 2%. It is testing support at the 50-day moving average. The memory-chip maker is up nearly 18% so far in 2023.
Micron earnings per share were seen falling from $2.14 last year to a loss of 67 cents this year, according to Zacks Investment Research. Revenue was expected to dip 52% to $3.76 billion.
Instead, the Boise, Idaho-based company lost an adjusted $1.91 cents a share on sales of $3.69 billion.
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 Dow Jones: These Stocks Test Entries
With the stock market currently in a correction, now is the time to be adding to one’s watchlist rather than buying stocks. Any buys now carry added risk.
Nevertheless, IT outsourcing play CGI (GIB) briefly cleared a flat-base entry of 94.10. It has since fallen back below this level. Overall performance is strong here, with the stock holding an IBD Composite Rating of 91 out of 99.
Packaged-food play Sovos Brands (SOVO) saw its relative strength line hit new heights as it tested a 16.93 buy point in a saucer base. It closed below that level. This is a first-stage pattern. Early-stage bases are more likely to succeed.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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