Major indexes in the stock market today dropped sharply at the open but quickly trimmed losses during the 90 minutes of trading. Losses at midday remained light. But Facebook owner Meta Platforms (META) got hit hard. Nvidia (NVDA), another member of the Magnificent Seven, also got rocked after the opening but managed to erase most losses at midday.
X
The Dow Jones Industrial Average erased an early 0.6% loss and edged a few points higher. UnitedHealthUNH helped the cause, rising more than 12 points, or 2.5%. NikeNKE was the second best performer on the Dow industrials, up more than 2 points. But both stocks’ Relative Strength ratings were very poor at 25 and 20, respectively.
Despite dropping as much as 5%, Meta shaved the loss to under 4%. Shares still held an impressive gain of 37% since Jan. 1. The owner of Instagram and Facebook social media platforms also found bullish support at the short-term 21-day exponential moving average, which can be programmed on MarketSurge.
Nvidia Stock Chart Analysis
Nvidia stock swung from a loss of almost 4% in the first 15 minutes of trading, but chipped that down to turn 1% higher at around 10:45 a.m. ET. At around lunchtime on Wall Street, Nvidia bobbed mildly above and below the break-even level. Nvidia remains comfortably above the key 21-day exponential moving average, a sign of stock strength.
The AI chip designer and leader in graphics processing units that handle accelerated computing tasks, recently grew past $2 trillion in market value. The megacap tech may be due for a pullback after a nine-week rally. Shares remain well extended after moving past a 505.48 buy point in a flat base.
That base followed a double-bottom pattern, forming what might be viewed as a base on base ahead of Nvidia’s breakout past 505.48 in the week ended Jan. 12. It sports a hedged three-quarter position in Leaderboard.
Nvidia holds a superb 99 Composite Rating from IBD. However, this rating is best used for stock selection, not for timing buys or sells in the stock market.
Outside the stock market, bitcoin surged again, rising 3% to a record of $71,568 initially. Then the digital currency accelerated the gain to more than 4% to $72,361. The iShares Bitcoin Trust (IBIT), a new spot Bitcoin price tracker, jumped 4.5% and reached new highs. It is extended from a seven-week cup with handle at 30.23.
Stock Market Today
The Nasdaq composite briefly undercut 16,000 and slipped to a morning low of 15,978, but bounced to 16,055 at around 11:50 a.m. ET, down less than 0.2%.
Through Friday, the Nasdaq showed a 7.2% gain year to date, trailing a 7.4% advance by the S&P 500. The large-cap benchmark fell nearly 0.4% and traded near its early Monday low of 5,101. Meanwhile, the Dow Jones Industrial Average, which has fallen two straight weeks, edged 0.3% lower.
Nasdaq-listed Costco Wholesale (COST) continued to sink after last week’s negative reversal. The discount retailing giant got slammed in heavy volume last week after its February-ended fiscal Q2 sales sharply missed analysts’ expectations. Shares on Monday fell 1.5% in heavy trade and are testing key support at the 10-week moving average.
Going back to the stock market indexes, the small-cap Russell 2000 dropped nearly 0.5% at around 1:30 p.m. ET. The popular index, however, is not giving back much of its nearly 3.3% gain over the past two weeks.
Investors are bracing for a fresh round of inflation data before the market open Tuesday.
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The February numbers of U.S. consumer prices hit traders’ screens. On Feb. 13, the stock market fell hard on the January CPI report. Major indexes dropped in higher volume, a signature mark of pronounced professional selling.
According to Econoday, economists on consensus see the CPI index rise 3.1% year over year, matching the January increase. Core prices are expected to move 0.3% higher vs. January, slowing from 0.4% in January, and up 3.7% vs. a year ago vs, 3.9% last month.
Meta Stock Analysis
Days of heavy institutional profit-taking, known as distribution, have piled up recently. Over the past eight sessions, the Nasdaq has logged four distribution days. They include a 1.7% sell-off on March 5 and a 1.2% decline three sessions later on March 8.
Meta has certainly helped the tech sector of the stock market lead the advance since November. The social media giant is sharply past its breakout point at 326.20. But the stock is now approaching a possible new entry point if it tests the rising 10-week moving average.
The Menlo Park, Calif., firm has notched excellent year-over-year increases in earnings (up 31%, 168% and 203% in the past three quarters) and sales (up 11%, 23% and 25%). Wall Street thinks Meta’s bottom line will rise another 45% in Q1 to $4.89 a share, according to MarketSurge, on a 26% increase in sales to $36 billion.
Meta reports its first-quarter results on April 24.
Please check out this IBD Stock Spotlight column for more details on the chart action in Meta Platforms.
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Falling In Sympathy?
Other tech stocks making notable moves included Marvell Technology (MRVL).
The member of IBD’s fabless semiconductor industry group shot out of a seven-month base on base with a 73.53 buy point on March 1. Gains quickly amassed over the next four sessions as Marvell rallied 16.6% from this proper entry. That was short of IBD’s offense-type sell rule, which is to snatch at least short-term profits when the gain from the breakout reaches 20% to 25%.
However, Marvell shares have nose-dived badly, down more than 4% on Monday after dropping 11% on Friday in massive turnover. The poor action lately triggered a defense-type sell rule, or to lock in at least a small gain or avoid a loss when a growth stock loses much of its double-digit gain.
Marvell reported fiscal Q4 results late Thursday, and the numbers did not meet IBD’s stock selection criteria in terms of EPS growth (a minimum 25% on a year-over-year basis) and sales growth (20% or more for small and midcap stocks, at least 10%-to-15% growth for large and mega-cap names). Earnings in the microprocessor designer came in flat at 46 cents a share on a 1% rise in sales to $1.43 billion.
Mutual fund sponsorship in MRVL dipped in the fourth quarter to 2,291 funds vs. 2,320 in Q3, according to MarketSurge data.
Outside tech, leisure products chain and midcap stock Academy Sports & Outdoors (ASO) also made a negative round trip of recent gains from a 68.50 flat-base buy point. Academy, down 2% on Monday in above-average turnover, slid lower for a sixth straight session. Retail sector leader Abercrombie & Fitch (ANF), up sharply from an initial breakout past a 28.39 early buy point in May, still possesses a huge gain of more than 300%. However, shares sank 2.7% and registered a fourth drop in a row in heavy trade. The stock is getting closer to a test of the 50-day line.
Outside The Stock Market
Trading was fairly quiet in U.S. government bonds, but Econoday shows a full slate of Treasury auctions of bonds of various durations.
The benchmark 10-year bond yield edged up 1 basis point to 4.09%.
Elsewhere, crude oil futures on the Nymex fell 0.4% to $77.68 a barrel. In recent weeks, crude rallied above $80 for the first time since the week of Nov. 6.
Please follow Chung on X/Twitter: @saitochung and @IBD_DChung
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Read More:Stock Market Today: Meta Falls Hard, Nvidia Slips Again But Indexes Trim Early Losses
2024-03-11 17:43:02