The Dow Jones Industrial Average tumbled on strong jobs data even as AI stock Microsoft (MSFT) popped. Meta Platforms (META) was nearly flat amid the launch of Twitter rival Threads even as Tesla (TSLA) CEO Elon Musk launched a broadside against the platform.
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Meanwhile, some noteworthy stocks are building bullish bases even as others flash sell signals. InMode (INMD) and Xylem (XYL) eyed entries, while Monday.com (MNDY) and Zscaler (ZS) were coming under pressure.
Stocks were coming under pressure while Treasury yields spiked on hot jobs data. The ADP private payroll number of 497,000 blew away economist estimates for 235,000, according to Econoday. It was also far higher than the revised 267,000 May payrolls number. Wall Street will await Friday’s June jobs report with bated breath.
Nasdaq Slips As Small Caps Get Mauled
The Nasdaq was getting slapped, falling nearly 1% but off the day’s low. Latin American e-commerce stock MercadoLibre (MELI) was a laggard, falling more than 6%.
The benchmark S&P 500 fared a bit better but was still down 0.8%. Leaderboard stock Generac (GNRC) was one of the poorest performers here, dropping more than 4%.
The S&P 500 sectors were all bleeding. Energy and consumer discretionary suffered the worst declines while technology and consumer staples fared best.
Small caps were getting badly mauled by the bears, with the Russell 2000 down nearly 2%. Growth stocks also got spanked, with the Innovator IBD 50 ETF (FFTY) down more than 2%.
Dow Jones Today: Microsoft Stock Shines
The Dow Jones suffered a shellacking among the major indexes. It was down nearly 400 points, more than 1%, heading into the close.
Home Depot (HD) was faring the worst as it slid 2.5%. It is now testing support at the 21-day exponential moving average, according to MarketSmith.
Chevron (CVX), American Express (AXP) and Nike (NKE) followed closely behind with losses of more than 2% each.
Microsoft stock was faring the best on the Dow Jones today. It was the only component managing to turn in a gain, rising almost 1%. It continues to benefit from lingering AI buzz.
Meta Stock Holds Up Amid Threads Launch, Musk Taunts
Meta stock was holding up better than most Thursday, buoyed by the launch of its Threads social media app.
It was also boosted by positive comments from KeyBanc, which maintained an overweight rating and raised its price target for Meta stock to 335 from 280.
Threads is built by Instagram, and Twitter owner Musk took to his platform to poke fun at his new rival. He mocked the idea of a safer alternative to his self-styled bastion of free speech.
“It is infinitely preferable to be attacked by strangers on Twitter, than indulge in the false happiness of hide-the-pain Instagram,” Musk tweeted.
Meta stock was marginally positive heading into the close, rising 0.2%. The Leaderboard stock is well-extended from its most recent entry.
Meanwhile, Tesla stock tumbled almost 2% amid the broader market pullback. Despite this it remains far clear of its most recent buy point.
Outside Dow Jones: These Stocks Form Bullish Bases
Even on down days it is a good idea to bulk up one’s watchlist of potentially actionable stocks.
InMode has formed a consolidation with an ideal buy point of 41.84, according to MarketSmith analysis. Aggressive investors could also see 38.38 as a potential entry. This counts as a first-stage pattern, which means it is more likely to net big gains.
All-around excellent performance has netted InMode stock an IBD Composite Rating of 97 out of 99. Earnings have accelerated for the past three quarters. The company makes and sells devices using radio frequency technology for minimally invasive procedures. Earlier this month Barclays upped 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 handle and is shooting for a 114.87 entry. It is currently falling below the 21-day exponential moving average. The relative strength line has been dipping while it forms 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 stout institutional sponsorship, with 58% of its stock currently held by funds. The firm 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 following its attempted breakout from a cup base. It is trying to rally back amid the low-volume move, however, and has narrowed early losses.
Nevertheless, the relative strength line has also been weakening, 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 ceding double-digit gains from its 143.63 entry. The cybersecurity firm also looks to be losing support at the 21-day exponential moving average.
Investors may want to wait to see if a new base can be formed amid a broader stock market pullback.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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