The Dow Jones Industrial Average closed near session lows after giving up ground early Walt Disney (dis) jumped after his report. Noted fund manager Cathy Wood campaigned Roblox (RBLX) despite the massive decline of the stock. China stock Ali Baba (Baba) vault after earnings.
Stocks initially jumped after data showed consumer prices rose 3.2% in July versus July 2022, cooler in economists’ view of a 3.3% rise. The 0.2% increase from June was in line with expectations. Core prices, which exclude food and energy, rose 4.8% year-over-year and 0.2% from June. This meets expectations. Investors hope that lower inflation will make the Federal Reserve less aggressive about interest rates.
“Stocks pared gains after the summer recession stabilized and buying faded,” Edward Moya, senior market analyst at Oanda, told IBD. “The S&P 500 is at some key technical levels and the buyers seem unwilling to try to push it higher.”
Treasury yields rose. The 10-year yield jumped 10 basis points to 4.11% while the 2-year yield rose 5 basis points to 4.85%. The yield curve remains inverted.
Nasdaq gains fade when small caps slip
The tech-heavy Nasdaq saw almost all of its early gains wiped out as it closed up 0.1%. Free market (millie) was the best performer here, rising 5.7% and clearing a key cup buy point at 1,365.64.
The S&P 500 fared even worse, closing almost unchanged. texture (TPR) here for the wrong reasons, dropping 15.9% following news that it plans to buy its competitor Capri Holding (CPRI) for $8.5 billion.
S&P 500 sectors ended the session mixed. Communications and consumer appreciation services have been the best performers in the stock market today. Utilities and real estate were further behind.
The bears chomped into the small caps, with Russell 2000 down 0.4%. Growth stocks are also lower, with the Innovator IBD 50 ETF (fifty) closed the day down 0.8%.
Dow Jones today: Disney stocks pop after earnings
The Dow Jones plunged into negative territory. It ended the session with a minuscule gain of 53 points, an increase of 0.2%.
Disney was the best performer on the Dow today, emerging despite posting mixed results late Wednesday. As it grappled with slowing streaming growth and soaring content costs, Wall Street welcomed its second set of big price increases in less than a year.
Among those increases was a 20% increase in the cost of ad-free versions of Disney+ and Hulu. The cost of the ad copies you support will not change. Disney Parks, Experiences and Products revenue jumped 13% over the year to $8.33 billion.
But while Disney stock gained 4.9 percent, its year-to-date rise of just over 3 percent lags badly behind the S&P 500’s nearly 17 percent gain. Disney managed to cross its 50-day moving average. But with the stock still below the 200-day line, that would be a very strong entry point.
Kathy Wood uploads to Roblox stock after taking a dip
Fund manager Wood is never afraid to buy on the dip. Some might say the CEO of ARK Invest outdid herself after being uploaded to Roblox stock on Wednesday.
At its lows for that session, Roblox lost 23% from the previous day’s closing price. It was reached after missing analyst opinions for both earnings and revenue.
The silver lining for the bulls is that daily active users are up 25% year-over-year.
I acquired just under 664,000 shares of the ARK Innovation ETF (ark), approximately 122,000 for the ARK Next Generation Internet ETF (ARKW(and just under 80,000 for the Ark Fintech Innovation ETF)ARKF).
And Kathy Wood isn’t the only fan of Roblox stock. Wedbush analyst Nick McKay upgraded the stock to outperform from neutral. He set a price target of 37. In a research note, he said the stock “may have the most compelling growth trajectory among the video game names in our coverage universe.”
Roblox stock rose 3.9% on Thursday but is still firmly rooted below the 50-day and 200-day moving averages, MarketSmith’s analysis appears.
Alibaba’s earnings boosted Chinese stocks
Chinese e-commerce game Alibaba saw a strong trading session after posting strong results.
The company managed to beat analysts’ expectations regarding the highest and lowest profit. The 14% revenue growth rate was the best year-over-year sales growth since 2021. Management also touted its AI efforts, telling analysts that “the growth opportunity driven by AI services is just beginning.”
Alibaba stock ended the session up 4.6% and stands above both the major and short-term moving averages.
Outside of Dow Jones: These stocks are testing buy points
Even with the stock market’s current bullish trend under pressure, it’s important to watch for breakouts.
The Expro Group oil well play ended the day in buy territory after making an entry with a handle at 23.72.
Overall excellent performance has netted it a composite IBD rating of 97. It is currently in the top 6% of stocks in terms of price performance over the past 12 months.
Progress Software has had less luck, returning below its buy zone after testing a key entry point at 61.79. Database software play boasts strong earnings and stock market performance, but has been struggling to move decisively higher lately.
Please follow Michael Larkin on Twitter at @tweet For further analysis of growth stocks.
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