The Nasdaq fell 3.2% to fall below its 50-day moving average, while the Dow Jones and S&P 500 industrials lost around 3% each in the stock market today. Small caps followed by the Russell 2000 fell 2.5%. Volume was significantly higher on the two major exchanges compared to the same time on Tuesday.
Dow Jones Below 50 Day Line
Amid the recent volatility, the Nasdaq’s year-to-date gain was reduced to 27%, while the S&P 500 was up 5% until Tuesday’s close. The Dow Jones is down 4% and the Russell 2000 is now 5% underwater this year. Read The Big Picture for a detailed daily market analysis.
The Dow Jones Index, which closed September with a loss of 2.3%, fell below its 50-day moving average. On September 30, the outlook for the IBD stock market was revised to “confirmed uptrend” versus “correcting market”. But on Monday, the outlook was lowered to “bullish under pressure” as the shares sold.
Snapshot of the US Stock Market Today
|Index||symbol||Price||Loss of profit||% Change|
|S&P 500||(0S and P5)||3316,70||-73,98||-2,18|
Last updated: 10:16 AM ET 28/10/2020
Coronavirus cases around the world are approaching 44.4 million, with more than 1.17 million deaths, according to Worldometer. In the United States, confirmed cases have now exceeded 9 million, with a death toll of more than 232,000. New cases of the virus hit record highs on Friday and Saturday in the United States, surpassing 80,000 every day.
Visa, Microsoft puts pressure on the Dow
Visa (V) led the Dow Jones down, with a loss of 4%, ahead of its fourth quarter tax results due after the close. It fell below its 200-day moving average, undercutting the bottom of a flat base it was building. Analysts expect the credit card giant’s profits to fall 26% to $ 1.09 per share on an 18% drop in revenue of $ 5.02 billion.
Main rival MasterCard (MA) fell 7% after reporting weaker than expected third quarter results on Wednesday morning.
Back on the Dow, Salesforce.com (CRM), Microsoft (MSFT), chenille (CAT) et Boeing (BA) were among a half-dozen stocks down nearly 3% each.
Microsoft stumbled 2.7% in volume terms, despite strong earnings growth. After the close on Tuesday, the software giant said it earned $ 1.82 per share in the first quarter of the fiscal year on revenue of $ 37.15 billion. This marked a 32% jump in EPS and a 12% increase in sales. Analysts expected Microsoft to earn $ 1.54 on sales of $ 35.72 billion.
For the second quarter of the fiscal year, Microsoft is forecasting revenue of $ 39.5 billion to $ 40.4 billion. The midpoint of the range is $ 39.95 billion, slightly below some analysts’ forecast of $ 40.43 billion.
Shares fell nearly 3% on Wednesday after finishing just above the 50-day line on Tuesday amid a 1.5% gain. The stock is working on a mug with a handle with a buy point of 225.31, according to MarketSmith chart analysis. Microsoft is an IBD Leaderboard and IBD Long-Term Leader designation.
Boeing beats, but falls
Boeing, down 2.6% in revenue fast, also beat analysts’ views. The jetmaker lost $ 1.39 per share on revenue of $ 14.14 billion, compared with a loss of $ 2.33 per share on revenue of $ 13.81 billion. Stocks have encountered resistance at its 50-day line over the past three months.
Boeing has announced plans to lay off another 11,000 workers by the end of 2021, which would bring its total number of employees to 130,000, from more than 160,000 earlier this year.
Airlines, gold miners, internet content, and oil and gas stocks were among the biggest losers among IBD’s industry groups. Only one group, solar power, has withstood the sell-off decline.
Solar stocks shine
First solar (FSLR) moved away and climbed 14% in massive trade. The solar company reported EPS that jumped 400% to $ 1.45, as revenue jumped 70% to $ 928 million, easily beating views for 60 cents on $ 707.7 million in sales .
Enphase Energy (ENPH) grew 3% in high volume, also following a beat in profits and revenues. It reported EPS of 30 cents on $ 178.5 million in revenue compared to Wall Street estimates for 24 cents on $ 169.7 million in sales.
Both solar stocks are well expanded from their last points of purchase.
The Innovator IBD 50 ETF (FFTY) fell 2.3%, Dynatrace (DT), AudioCodes (AUDC), Digital turbine (APPS) and ServiceNow (NOW) weighed. Microsoft was also a big loser in the IBD 50.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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