The Dow Jones Industrial Average closed lower Tuesday as Treasury yields rose. A trio of stocks, included Coin base (COIN), had mixed fortunes despite Cathie Wood buying more shares. Ali Baba (BABA) went on a magic carpet ride on a restructuring move. apple (AAPL) and Microsoft (MSFT) fell.
A couple of notable stocks attempted breakouts despite the challenging action. Both CGI (GIB) and Sovo’s Brands (SOVO) tested purchase points, without success.
Treasury interest rates continued to rise. The 10-year yield rose 3 basis points to 3.56%, while the two-year yield rose 10 basis points to 4.06%. The yield curve remains inverted, traditionally an indicator of a recession.
Energy stocks got a boost as West Texas Intermediate crude rose 0.8% to more than $73 a barrel. It continues to move away from recent lows.
Nasdaq Falls, IBD 50 Delays
The Nasdaq closed at lows for the day, but still fell 0.5%. EV stock Sure (LCID) underperformed here with a fall of 7.2%.
The benchmark S&P 500 also fell, despite a rise towards the end. It fell 0.2 percent. It continues to lag behind the 50-day moving average. Humana (HUM) was a laggard here as it skidded 4.7%.
The S&P 500 sectors ended the session mixed, with energy and industrials posting the best gains. Communication services, health and technology led.
Small caps barely fell, with the Russell 2000 falling 0.1%. Growth stocks struggled the most, with the Innovator IBD 50 ETF (FFTY) down 1.5%.
Dow Jones today: Microsoft, Apple shares fall again
The Dow Jones Industrial Average also fell, but not as sharply as the other major indexes. It closed down less than 40 points, or 0.1 percent.
Microsoft fought back heading into the close, but still fell 0.4% as Big Tech stocks continued to pare some recent gains. It lost ground at an entry of 276.86, MarketSmith analysis shows.
Apple also struggled, dropping 0.4 percent. Despite this, the 50-day and 200-day moving averages remain clear. It also managed to end the session above its 10-day line.
American Express ( AXP ) was the worst performing stock on the Dow Jones today as it fell 2.4%. Walgreens Boots Alliance (WBA) led the upside with a gain of 2.7%.
These stocks are struggling despite Cathie Wood buys
Famed money manager Cathie Wood is never afraid to buy on the dip, but the strategy had mixed fortunes for three new purchases on Tuesday.
Cryptocurrency stock Coinbase turned higher and gained 0.8%. It is trading near the 50-day moving average. Wood’s signature ARK Innovation ETF (ARKK) picked up more than 32,000 shares on Monday.
It came as bitcoin, the most famous digital currency of all, also reversed higher. It also rose 0.8% and is still up almost 65% for the year.
Teladoc Health ( TDOC ) fell 1%, though it closed slightly off the day’s lows. It trades below the major moving averages. ARKK added more than 18,000 shares.
Joby Aviation (JOBY) also fell 1%, but also from its lowest level. ARK Autonomous Technology & Robotics ETF (ARKQ) bought 448,000 shares. This cheap stock does not meet the CAN SLIM criteria.
Alibaba shares are on a magic carpet ride
BABA shares rose sharply on the news that they are splitting into six separate business groups. Investors seem excited by the fact that each of these groups could potentially go public to raise external funding.
The six are: Cloud Intelligence, Cloud Commerce, Local Services, Cainiao Smart Logistics, Global Digital Commerce Group and Digital Media and Entertainment.
Each group will have its own board and CEO. The move is “designed to unlock shareholder value and promote market competitiveness,” according to a company statement.
The China stock rose 14.3%, taking investors on a magic carpet ride in the process. Alibaba stock is now up 7% so far in 2023.
Micron due earnings; MU stock drop
Chip giant Micron technology (MU) inched higher after closing subsequent earnings.
The stock closed lower in its report, falling around 1%. But in extended trade it was up nearly 2%. It tests support at the 50-day moving average. The memory chip maker is up nearly 18% so far in 2023.
Micron’s earnings per share fell from $2.14 last year to a loss of 67 cents this year, according to Zacks Investment Research. Revenue falls 52% to $3.76 billion.
The Boise, Idaho-based company lost an adjusted 1.91 cents a share on sales of $3.69 billion.
Boise, Idaho-based Micron makes two types of memory chips: DRAM and NAND. DRAM chips act as the main memory in PCs, servers and other devices, working closely with central processing units. NAND flash chips provide long-term data storage.
Outside the Dow Jones: These stocks are testing entries
With the stock market currently in a correction, now is the time to add to one’s watch list instead of buying stocks. All purchases now involve additional risk.
Nevertheless, IT outsourcing play CGI (GIB) briefly erased a flat-base entry at 94.10. It has since fallen back below this level. Overall performance is strong here, with the stock holding an IBD Composite Rating of 91 out of 99.
Play with packed lunches Sovo’s Brands ( SOVO ) saw its relative strength line reach new highs as it tested a 16.93 buy point in a plate base. It closed below that level. This is a first step pattern. Early stage bases are more likely to succeed.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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