Dow Jones falls on jobs data; Meta dips after launch of threads amid Elon Musk mockery, legal move
The Dow Jones Industrial Average fell on strong jobs data Thursday, even as AI stocks Microsoft (MSFT) appeared. Meta platforms (META) was nearly flat during the launch of Twitter competitor Threads, while Tesla (TSLA) CEO Elon Musk launched a verbal and legal broadside against the platform.
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Meanwhile, some notable stocks are building bullish bases while others flashed sell signals. InMode (INMD) and Xylem (XYL) eyed entries, while Monday.com (MNDY) and Zscaler (ZS) came under pressure.
Shares came under pressure as government yields rose on hot jobs data. ADP’s private payrolls number of 497,000 blew away economist estimates for 235,000, according to Econoday. It was also far higher than the revised May wage figure of 267,000. Wall Street will await Friday’s June jobs report with bated breath.
Oanda senior market analyst Edward Moya said the labor market is “not loosening at all” based on the ADP data. “The Fed’s rate hike campaign is not yet crippling SMEs, but that should change in the fall,” he said in a note to clients.
Treasury yields rose higher. The 10-year yield jumped 10 basis points to 4.04%, while the two-year yield rose 4 basis points to 5%. The yield curve remains inverted.
Nasdaq Dips As Small Caps, IBD 50 Get Mauled
The Nasdaq plunged 0.8%, although it closed lower. Latin American e-commerce stock Free market ( MELI ) was a laggard, falling 7.5%.
The benchmark S&P 500 also fell 0.8%. Leaderboard stock Generac (GNRC) was among the poor performers here, falling 3.8%.
The S&P 500 sectors all closed in the red. Energy and consumer goods saw the worst declines, while technology and consumer goods fared the best.
Small caps were badly hurt by the bears, with the Russell 2000 ending the session down 1.6%. Growth stocks were hit even harder, with the Innovator IBD 50 ETF (FFTY) losing 2%.
Dow Jones today: Microsoft Stock, Apple Shine
The Dow Jones suffered a shellacking; it fell 366 points, or 1.1%.
Home Depot (HD) fared worst when it fell 2.8%. It is now testing support at the 21-day exponential moving average, according to MarketSmith.
3M (MMM), American Express (AXP) and Goldman Sachs (GS) followed close behind with losses of more than 2% each.
Microsoft shares were the best performers on the Dow Jones today, rising 0.9% as it continues to benefit from lingering AI buzz. apple ( AAPL ) was the only other component to post a gain, though its 0.3% lift was meager.
Meta Stock dips amid musk threads taunt, legal move
The meta stock faded into the close Thursday, though it fared better than many during the launch of social media app Threads.
It was initially boosted by positive comments from KeyBanc, which maintained an overweight rating and raised its price target for Meta stock to 335 from 280.
Threads are built by Instagram, and Twitter owner Musk took to his platform to play with his new rival. He scoffed at the idea of a safer alternative to his self-styled bastion of free speech.
“Being attacked by strangers on Twitter is infinitely preferable to indulging in the false joy of hide-the-pine Instagram.” Musk tweeted.
It has also emerged that Twitter sent Meta a notice accusing it of stealing trade secrets after hiring dozens of ex-Twitter employees.
“Twitter has serious concerns that Meta Platforms has engaged in the systematic, intentional and illegal misappropriation of Twitter’s trade secrets and other intellectual property,” Alex Spiro, Elon Musk’s longtime attorney, said in the letter.
He also warned in the dispatch, addressed to Meta CEO Mark Zuckerberg, that Twitter “intends to strictly enforce its intellectual property rights.” Semafor first reported on the letter.
Twitter’s new rival has already managed to pass 30 million registrations.
Meta shares were forced down at the end, falling 0.8%. The leaderboard inventory is still well expanded from the last entry.
Meanwhile, Tesla shares fell 2.1% amid the broader market decline. Despite this, it is still well clear of its last buying point.
Outside the Dow Jones: These stocks are forming bullish bases
Even on down days, it’s a good idea to compile a watchlist of potentially actionable stocks.
InMode has formed a consolidation with an ideal buy point at 41.84, according to MarketSmith analysis. Aggressive investors may also see 38.38 as a potential entry. This counts as a first stage pattern, which means it is more likely to produce big wins.
All-around excellent performance has earned InMode stock an IBD Composite Rating of 97 out of 99. Earnings have accelerated over the past three quarters. The company makes and sells devices that use radio frequency technology for minimally invasive procedures. Earlier this month, Barclays raised its price target on InMode to 47 from 45 while maintaining an overweight rating.
Water industry equipment maker Xylem has formed a first-stage cup with handles and rates at 114.87. It is currently falling below the 21-day exponential moving average. The relative strength line has fallen while forming the handle.
XYL is in the top 20% of stocks in terms of price performance over the past 12 months. In addition, it has a strong EPS rating of 88. It has solid institutional sponsorship, with 58% of its shares in mutual funds. The company operates in three segments: water infrastructure, applied water and measurement and control solutions.
Software stock fights back amid sell signal
Work management software stock Monday.com triggered a sell signal after it fell 7% below a 171.89 buy point. This was disappointing after the attempted breakout from a cup base. It pulled back somewhat to the end amid the low-volume move, closing 4.8% below its entry.
Nevertheless, the relative strength line has also weakened, a bad sign. Monday.com has managed to find support so far at the 10-week moving average and has yet to touch the 50-day line on its daily chart.
Zscaler triggered a round-trip sell signal after giving up double-digit gains from the 143.63 entry. The cybersecurity firm also appears to be losing support at the 21-day exponential moving average.
Investors may want to wait to see if a new base can form amid a broader decline in the stock market.
Follow Michael Larkin on Twitter at @IBD_MLarkin for more growth stock analysis.
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