Dow Jones Pares Losses As Nasdaq Reverses; Retailers Dive But Growth Stocks Rally

Stocks remained mixed in afternoon trade Wednesday, as the Nasdaq and S&P 500 flashed signs of late strength, while the Dow Jones Industrial Average whittled away at its earlier losses heading into the final hour of pre-holiday trade.


The Nasdaq firmed to a 0.2% gain, and the S&P 500 defended its 0.1% advance. The Dow Jones industrials narrowed it early 0.6% loss to 0.1% in the stock market today. Small caps tracked by the Russell 2000 stumbled back into tight losses. Volume remained sharply lower on both major exchanges vs. the same time Tuesday. The stock market will be closed Thursday for Thanksgiving.

The strength in growth stocks held as, among exchange traded funds, the Innovator IBD 50 (FFTY) kept its 2% gain in a strong show of support at its 200-day line. The iShares Russell 1000 Growth ETF (IWF) gained 0.4%, and the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) added nearly 0.1%.

Jobless Claims Hit 52-Year Low: Fed Poised To Act On Inflation

Early Wednesday, the Labor Department said weekly jobless claims fell to 199,000. That marked the lowest level since 1969, coming in also well below Econoday estimates for 264,000 claims, as well as the prior week’s 268,000 filings.

Minutes released from the Federal Reserve’s November meeting showed members of the Federal Open Market Committee increasingly poised to shift from their watchful waiting stance on inflation. “The Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee’s objectives,” according to the minutes.

The U.S. economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns more than a year-and-a-half ago. A resurgence in cases fueled by the more contagious delta variant had been slowing as vaccinations rise.

U.S. Stock Market Today Overview

IndexSymbolPriceGain/Loss% Change
Dow Jones(0DJIA)35720.82-92.98-0.26
S&P 500(0S&P5)4691.63+0.93+0.02
Nasdaq(0NDQC )15796.69+21.55+0.14
Russell 2000 (IWM)230.86-0.47-0.20
IBD 50 (FFTY)48.26+0.83+1.75
Last Update: 12:16 PM ET 11/24/2021

But parts of Europe are shutting down or planning to do so again, and cases are rising again even in parts of the U.S.

Globally, Covid-19 cases have topped 259 million, with over 5 million deaths, according to Worldometer. In the U.S., cases are approaching 49 million with more than 796,000 deaths.

Earnings Movers

HP Inc. (HPQ) gapped up and surged almost 11% in huge volume, breaking out past a 32.38 buy point of a cup with handle, according to IBD MarketSmith analysis. It had climbed past the entry the past two sessions but closed below it each time. HPQ stock is out of buy range of the standard buy point, which topped out at 34.

But the gap-up gain created a breakaway gap buying opportunity. This would use the high marked just after the open, at 35.54, and create a buy zone that runs to 37.32.

After the close Tuesday, HP delivered fiscal Q4 results that topped views on both the top and bottom lines. HP’s personal systems sales — which include PCs and laptops — came in at $11.8 billion, easily beating FactSet estimates for $10.5 billion, according to MarketWatch.

Pure Storage (PSTG) soared 13% in fast turnover as it gapped back above a 27.58 buy point of a cup-with-handle base. It initially cleared the buy point in early November, but had slipped below the entry this week. PSTG stock is now out of the buy zone, which went up to 28.96.

Late Tuesday, the maker of high-speed storage systems reported adjusted Q3 earnings of 22 cent a share on revenue of $562.7 million. That beat FactSet forecasts for EPS of 12 cents on revenue of $531 million. Subscription services revenue grew 38% to $187.8 million.

Autodesk, Nordstrom, Gap Tumble On Earnings

But Autodesk (ADSK), Nordstrom (JWN) and Gap (GPS) sold off hard after their earnings reports.

Autodesk dived 17% in heavy trade to an eight-month low. Late Tuesday, the design software maker reported Q3 results that edged past Wall Street targets. But its current-quarter outlook fell short of estimates. Shares are now well below their 50-day and 200-day lines.

Nordstrom plunged 29% in heavy volume to a one-year low, after the department store’s Q3 earnings missed views. Cowen lowered its price target to 27 from 35, Barron’s reported, saying Nordstrom could face challenges in winning back shoppers.

Gap crashed 23% in huge turnover after the apparel retailer reported weak Q3 results and cut its full-year guidance due to significant supply-chain constraints. Gap stock is now trading about 52% off its 52-week high.

Growth Stocks To Watch

Over in the IBD 50, Roblox (RBLX) jumped 8% in heavy trade. MP Materials (MP) and On Holding (ONON) rallied more than 6% each.

Roblox is on the IBD Leaderboard Watchlist. It remains well extended from a 103.97 buy point of a consolidation cleared on Nov. 9. Roblox is on track to halt a two-session slide, during which it slumped 11% on Monday and 4.5% on Tuesday.

In The Dow Jones

Walgreens Boots Alliance (WBA) and Goldman Sachs (GS) were the biggest blue-chip losers, down between 1% and 2% each.

Nike (NKE) cut an early 2% loss to 0.2% after finding support at its 21-day exponential moving average. On Tuesday, shares fell 1.6%. The athletic shoe and apparel giant canceled some orders until summer 2022 due to supply-chain issues.

Visa (V) led the upside on the Dow Jones, rallying more than 2%

Follow Nancy Gondo on Twitter at @IBD_NGondo


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