The Dow Jones Industrial Average fell 150 points on Thursday following the Labor Department's release of weekly unemployment claims. Tesla's stock plunged after Elon Musk issued a Cybertruck warning, as the electric vehicle giant missed its quarterly earnings. Netflix (NFLX), on the other hand, surged after strong results.
The number of first-time weekly claims for unemployment benefits dropped to 198,000. Claims had been expected to rise modestly to 211,000 from 209,000 the previous week in the week ending Oct. 14. The Philadelphia Fed's Manufacturing Index also improved in October to -9.0 after wild swings in September and August.
Alcoa, AT&T and Lam Research were the top earners on Thursday morning.
In morning trading, AA shares fell 4.2% while AT&T stocks soared more than 7%. And Lam shares fell by 5.5%.
Tesla shares fell 8.5% on Wednesday after the EV leader announced that it had reported lower-than-expected revenue and earnings late in the day, but also stated that Cybertruck deliveries would begin next month.
Elon Musk, the CEO of Tesla, warned that, "We dug ourselves a grave with Cybertruck," and that, "There will be immense challenges in reaching mass production with Cybertruck, then making a Cybertruck cash flow positive."
Musk added, "I would like to temper expectations about Cybertruck. It's an excellent product, but it will take 12 to 18 month to become a major contributor to cash flow.
Netflix's stock soared by 16%, after the streaming giant surpassed analyst expectations late Wednesday for the number of new subscribers during the third quarter. Netflix reported that it had added 8.76 millions new subscribers in the third quarter, exceeding analyst expectations of 6.06 million. The company exceeded revenue and earnings expectations.
Dow Jones Today: Oil prices, Treasury Yields
The Dow Jones Industrial Average fell by 0.4% after Wednesday's opening, while the S&P 500 dropped by 0.3%. In morning trading, the tech-heavy Nasdaq Composite rose 0.1%.
The Nasdaq-100 tracker Invesco QQQ Trust, (QQQ), edged up, while the SPDR S&P500 ETF, (SPY), moved down by 0.2% on Thursday morning.
The yield of the 10-year U.S. Treasury Bond ticked up to 4.94% on Thursday morning, continuing this week's already substantial gains. The 10-year Treasury bond yield reached a new long-term record on Wednesday. It settled at 4.9%.
The oil prices fell by around 1% on Thursday morning and are now in negative territory for the entire week. West Texas Intermediate futures were trading near $86 per barrel, down just under 4% from the beginning of October.
Struggling Stock Rally
The Nasdaq Composite fell 1.6% on Wednesday, while S&P 500 dropped 1.3%. The Dow Jones Industrial Average also fell 1%.
The Big Picture from IBD is a must-read right now, as the stock market outlook shows signs of a rising trend. Read up on how to deal with the changing outlook of the stock market.
Stock Market Today
IBD Leaderboard members Arista Networks, Lululemon Athletica, Meta Platforms and Regeneron Pharmaceuticals (REGN), as well as Dow Jones Stocks JPMorgan Chase and Salesforce (CRM), are among the best companies to watch and buy in the still struggling stock market uptrend.
JPMorgan appears in the Stocks Near A Buy Zone section. Meta is an IBD SwingTrader. IBD was IBD Stock of the Day on Friday.
Dow Jones Stocks: JPMorgan, Salesforce
JPMorgan, the Dow Jones banking giant, fell by 1.1% on Wednesday. This is its third consecutive session of losses. According to IBD MarketSmith's chart analysis, shares are struggling to gain their 50-day level, while they build a base of a flat line with a 159.38 purchase point. A potential early entry is at 153.11, using the Friday high as a trigger. JPM shares rose by 0.1% Thursday morning.
Salesforce, the leader in software, is facing resistance around its 50-day line. If the stock is able to retake that level, it will be closer to the 228.79 purchase point of a double bottom base. The CRM stock grew 1% on Thursday morning.
Stocks to Buy and Watch: LULU gives up Buy Point
Arista fell 0.6% on Wednesday, falling just short of the 198.70 purchase point within a flat market. Recent sessions saw a bullish bounce from the 50-day level, putting the stock into a new buying area. The company will announce its third quarter results on October 30. ANET shares rose 0.3% in early Thursday trading.
Lululemon soared past the 406.94 purchase point of a flat-base Monday with a 10.3% gain. The shares fell below the entry point during Wednesday's drop of 1.8%. LULU shares were down 1% on Thursday morning.
Meta Platforms, the social media giant, is looking for support at a point of purchase of 312,87 after Wednesday's 2.2% drop. Meta's stock remains below the official buy point of a cup-base at 326.20. The company will announce its third quarter results on October 25. Meta shares increased 0.6% on Thursday.
According to IBD MarketSmith's pattern recognition, biotech leader Regeneron wants to move past the 847.50 purchase point of a flat-base. The earnings report is due Nov. 2. REGN shares fell 1.9% on Thursday.
Arista Networks ANET 198.70 Flat Base
Source: IBD data as of Oct. 18, 2023
Tesla's stock was down nearly 5% on Wednesday, even before the company reported earnings. The shares fell below the key 50-day line. This is an important level.
TSLA's stock has a cup-with handle base that is officially a buy-point at 278.98. This base is now in danger, given today's huge losses.
Dow Jones Leaders - Apple and Microsoft
Apple, a Dow Jones stock, extended its losing streak to four days Wednesday by declining 0.7%. The shares are trying to recover from recent lows. If AAPL can continue to rebound, it will likely form a double bottom base at a 189.98 purchase point. Apple will release its fiscal fourth quarter report on November 2. Early Thursday, shares rose 0.5%.
Microsoft shares dropped 0.6% on Wednesday as the shares continued to hold above the 50-day line. An early entry of 340.86 is the beginning of a new base. A new base is forming, with an early entry at 340.86. The results of the earnings will be released on October 24. On Thursday morning, MSFT's stock rose by 1.1%.