The Dow Jones Industrial Average held up relatively well near midday Friday after the blue-chip index gave back early gains for the third straight session Thursday, closing near lows and undercutting its 50-day moving average. Technology stocks in the Dow Jones came under more selling pressure, including Apple (AAPL) and Microsoft (MSFT) but losses were contained as both stocks moved off lows.
Walmart (WMT) was a bright spot in the Dow Jones today, one day after WMT stock sold off sharply despite what looked like a strong quarter. Cisco Systems (CSCO) extended gains after a positive response to earnings Thursday.
Falling bond yields helped lift indexes off lows. The 10-year Treasury yield was down 8 basis points to around 4.23%, though that was offset by a firm U.S. dollar. The Invesco DB U.S. Dollar Bullish ETF (UUP) is on pace for its fifth straight weekly gain.
Nvidia (NVDA), one of the Magnificent 7 stocks, pared losses but still fell 2% ahead of next week’s earnings report. Results are due Wednesday after the close, and the chip leader is expected to report strong bottom-line and top-line growth. The Zacks consensus estimate is for adjusted profit of $2.06 a share, up 304% from the year-ago quarter. Revenue is seen rising 65% to $11.04 billion. When NVDA reported results in May, it guided quarterly revenue about $4 billion above expectations.
Leaderboard stock Meta Platforms (META), along with Google parent Alphabet (GOOGL), Amazon.com (AMZN) and Tesla (TSLA), were other Magnificent 7 stocks down at least 1% near midday.
Tesla stock extended losses with its sights set on the 200 level. Tesla’s 200-day moving average, a key long-term support level, is around 196.50.
Bitcoin crashed 5.5% to around $26,300 after the WSJ reported that Elon Musk’s SpaceX has sold all its holdings in the cryptocurrency.
Outside the Dow Jones
More bad news out of China also fueled negative sentiment.
China property giant Evergrande filed for bankruptcy in New York on Thursday night. Property woes are a major drag on the struggling Chinese economy. The Evergrande news comes after another real estate giant in China — Country Garden — recently warned of a multibillion dollar loss for the first six months of the year. Moody’s downgraded the company’s rating, citing “heightened liquidity and refinancing risks.”
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The Nasdaq composite gapped down and lost another 1% early, weighed down by weakness in China stocks like JD.com (JD) and PDD (PDD).
Semiconductor stocks came under more selling pressure, with the VanEck Semiconductor ETF (SMH) down another 0.6%. But chip-equipment firm Applied Materials (AMAT) added nearly 2% after earnings and revenue comfortably beat views. The chip-equipment firm also gave solid guidance.
Retailer Ross Stores (ROST) was a top gainer in the Nasdaq 100, up nearly 6%, helped by a strong earnings report. Earnings and revenue growth accelerated from the prior quarter, up 19% and 8%, respectively.
The S&P 500 pared losses and was down 0.2%, buoyed by outperformance from top gainers like Generac Holdings (GNRC) and defense stock like Lockheed Martin (LMT) and Northrop Grumman (NOC).
The iShares Russell 2000 ETF (IWM) fell 0.9% intraday but reversed higher for a gain of 0.5%
In earnings news, Deere (DE) crashed below its 200-day line despite strong quarterly results. Dow Jones stock Caterpillar (CAT) looks a lot better than DE stock at this point. CAT is still testing support at its 21-day exponential moving average.
In other stock market news, Bloomin’ Brands (BLMN), the parent of Outback Steakhouse, jumped 7% after activist investor Starboard Value confirmed a 9.9% stake.
WTI crude oil futures edged higher to around $80.70 a barrel. In the drilling group, Noble (NE) was back near highs after falling below its 21-day line. The stock’s Aug. 8 intraday low is a key level to watch. If stock indexes weaken further, NE could pay a visit to its 10-week moving average around 47. A bounce off this level would put NE in an alternate buy zone.
In the same sector, Chart Industries (GTLS) added 1% as it holds support at the 50-day line.
Inside the MarketSmith Growth 250, Brazilian financial XP (XP) is still holding support at its 50-day line. Shares rallied more than 5%.
Dick’s Sporting Goods (DKS) rallied 1% ahead of next week’s earnings report. It’s near the top of a 23-week consolidation.
FTAI Aviation (FTAI), Remitly Global (RELY), and Dream Finders Homes (DFH) were top gainers in the IBD 50, with gains of more than 2%
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
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