Mark Zuckerberg ‘surprise’, Apple earnings:
The Dow Jones Industrial Average closed lower even as the Nasdaq soared more than 3%. Metaplatforms (META) exploded when Mark Zuckerberg shared a surprise. Apple (AAPL) surged in open trade but reversed in extended profit trade while Microsoft (MSFT) was one of the best blue chips
New Leaderboard member US Global Jets (JETS) ETF has passed a buy point. A trio of other notable names staged breakouts amid the bullish action. Soft (WHEELS), Tapestry (TPR), and Electronic Arrow (ARW) were all inputs tested.
New data from the Labor Department showed first-time jobless claims fell to 183,000 from 186,000 the previous week. Analysts had expected it to hit 193,000. The labor market continues to show strength, with early claims last week well below expectations for a second week in a row.
Nasdaq jumps, small caps shine
Today’s action was critical as the stock market often has a second-day reaction to Fed meetings. With Fed Chairman Jerome Powell’s virtuoso post-meeting press conference performance boosting markets yesterday, traders appeared to remain in risk mode today.
The Nasdaq was the strongest of the major indexes as it jumped 3.3%. DocuSign (DOCU) did well with a 7.7% gain.
The S&P 500 gained 1.5% to its best level in five months. WW Grainger (GWW) was among the stars here as it gained 13% on the company’s quarterly results.
The S&P 500 sectors closed on a mixed note. Consumer Discretionary, Communication Services, and Technology fared better, while Consumer Staples and Energy were the worst laggards.
Small caps also impressed, with the Russell 2000 up 2.1%. Growth stocks fought back at the close, with the Innovator IBD 50 (FFTY) ETF ending up 1%.
Dow Jones today: Microsoft, Apple impress
The Dow Jones Industrial Average lagged other major indexes despite the strength of some components. It closed lows but still fell 0.1%.
Microsoft stock was the best performer in the Dow Jones today, rising 4.7%. MSFT stock is now clear of its 200-day moving average for the first time since April, according to MarketSmith.
Apple stock also performed well, up 3.7%. AAPL stock has also moved up the 200-day line and is up more than 20% so far this year.
Apple’s earnings sent the stock down more than 3% after hours. EPS fell 1.09% to $1.88 while revenue fell 5.5% to $117.15 billion. Wall Street expected EPS to fall 8.1% to $1.93 as sales fell 2.2% to $121.21 billion, according to Zacks Investment Research.
iPhone and Mac revenue both fell short of analysts’ forecasts, although iPad sales were above expectations.
On the decline, UnitedHealth (UNH) and Merck (MRK) both lagged the Dow Jones. UNH plunged 5.3% while MRK fell 3.3%.
Meta Stock Rockets; Mark Zuckerberg admits his “surprise”
Facebook’s parent company, Meta Platforms, soared after its latest quarterly report was released on Wednesday. While revenue fell short, Facebook’s revenue, sales forecast, and user count exceeded views.
Meta stock closed slightly off Friday’s daily highs, but still climbed 23.3%. This allowed it to move away from its 200-day moving average. There is no entry point in sight at this time.
Investors seemed particularly pleased that the company announced a $40 billion share buyback. Parent company Facebook and Instagram cut spending forecasts, including capital expenditures.
CEO Mark Zuckerberg appears to be finding his inner Ebenezer Scrooge, bragging on the earnings call that “reducing layers of management” has improved the flow of information, which he says will lead to better products and better staff retention.
“It was honestly a little surprising to me, that when we started digging into this, the business felt better for me,” he said.
Zuckerberg already sees a big upside. The tech mogul, who according to Bloomberg was worth $57.2 billion at Wednesday’s close, will see his net worth rise significantly by the end of today’s session.
The new leader exceeds the point of purchase
The US Global Jets ETF dodged a buy point amid bullish action in the airline sector.
He managed to break free from a handful entry of 20.79, earning a spot on the prestigious IBD Rankings list in the process. The ETF climbed 3.1%, rising near the top of its buy zone.
The ETF holds the majority of its holdings in US and foreign airlines, but aerospace companies and travel companies also hold large positions within the fund.
Wednesday’s IBD Stock, Delta Airlines (DAL), closed above a buy point of 39.72, with the 5% buy zone extending up to 41.70. He ended the day flat.
Among the related actions, South West Airlines (LUV) increased by 3.4%, United Airlines (UAL) gained 4.2%, American Airlines (AAL) jumped 2.2% and Alaska Air (ALK) jumped 3.3%.
Alignment technology Stock sinks his teeth into Monster Gain
Orthodontic inventory Alignment Technology (ALGN) was one of the best performers in the stock market today.
It climbed 27.3% on its quarterly report after beating Wall Street views on the top and bottom lines.
Investors also backed Align shares after the company announced it would repurchase up to $1 billion of its stock over the next three years.
There is no entry in sight after the stock exploded, climbing more than 60% above its 50-day moving average.
ALGN stock is now up almost 70% so far in 2023.
Outside of Dow Jones: 3 stock test entries
It’s a good time to buy quality stocks, and a trio of notable names tested buy points on Thursday.
Online pet retailer Chewy is in a buy zone after clearing a cup with a handle entry of 48.11. The relative strength line just hit a six-month high, a bullish sign.
Arrow Electronics topped a cup base entry of 129.66 after its earnings report. It boasts a class-leading EPS rating of 95.
One reason to be cautious is that forward estimates aren’t that impressive. EPS is expected to fall 29% in 2023 before rising 1% in 2024.
The tapestry is just below its entry after breaching a cup buy point of 47.15 earlier. It is a first-stage base, which means it is more likely to net rich.
Earnings are a key weakness, with its EPS rating at 52 out of 99. Earnings are expected to rise 5% this year before climbing 15% in 2024.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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