The Stock Market Indexes Show Signs of Improvement
In the last hour of afternoon trading, the stock market indexes have shown improvement, with the major indexes heading back towards the day’s highs. The Nasdaq composite is now down 0.5%, trimming larger losses, while the Dow remains relatively flat and the S&P 500 has dipped 0.1%. The small-cap Russell 2000 is in line with the Nasdaq, losing 0.5%.
It appears that the Nasdaq is finding support at its 50-day moving average, while the Dow is trading above its 21-day exponential moving average. However, the S&P 500 is still below its 21-day line.
The Nasdaq 100-tracking Invesco QQQ Trust ETF (QQQ) has retreated 0.4%, and the Innovator IBD 50 ETF (FFTY) is underperforming, down 1.2%.
NYSE volume has fallen, while Nasdaq volume has risen compared to the same time on Tuesday.
The benchmark 10-year Treasury yield has shed 1 basis point to 4.02%.
On Thursday, the Street expects the July consumer price index and core prices to rise 0.2%, with year-over-year inflation projected to increase to 3.3% from 3% in June, and core inflation expected to remain at the 4.8% level.
On Friday, the stock market will receive the July Producer Price Index, which is seen rising 0.2% from June, with the year-over-year up 0.7% and core prices climbing 2.3%.
Sports Betting Stocks Duel
Celsius Holdings (CELH) stock has gapped up over 20% in heavy volume after the fitness beverage company beat second-quarter earnings and sales numbers late Tuesday. The stock has flown past the convergent point of its 21-day line and 50-day line.
Quarterly earnings for Celsius Holdings have grown over 300% for the last two quarters, while sales have grown over 100% in Q2 and nearly 100% in the prior quarter.
Penn Entertainment (PENN) has eased from larger gains, now up over 11%, after reporting higher-than-expected Q2 profit and in-line sales. Shares have retaken the 50-day line but found resistance at the 200-day moving average.
Penn Entertainment has announced that it will rebrand its Barstool Sportsbook as ESPN Bet and start business in the fall. The company will buy the exclusive rights to the ESPN trademark while cutting ties with Barstool Sports.
Competitor sports betting stock DraftKings (DKNG) has fallen over 9% in heavy volume on the news. The stock has sunk below its 21-day line but stopped short of its 50-day line. This is on pace to be its largest drop since November 4, 2022 when it sank 27.8%, according to Dow Jones Market Data.
Axon Enterprise (AXON) has spiked 15% following the company’s Q2 earnings and sales beats late Tuesday. The stun gun maker has reported 152% earnings growth on 31% revenue growth. This is the S&P 500’s biggest gainer today.
Solar Stock Shines
Array Technologies (ARRY) has soared over 25% in heavy trading after blowing past analysts’ second-quarter EPS and revenue estimates. Quarterly profit has grown 422% on 21% sales growth.
Analysts expect 128% full-year profit growth this year and 43% next year. Shares of the solar storage stock have retaken the 50- and 200-day lines, and the stock has broken out above a trend line that offered an entry around $21.50.
Language learning app Duolingo (DUOL) has popped over 8% after the firm reported a Q2 surprise profit and higher sales than projected. Duolingo also raised its full-year 2023 revenue guidance.
Shares of Super Micro Computer (SMCI) have sank over 22% in huge volume despite the company reporting higher fiscal Q4 profit and sales than expected. It has given a weak AI sales forecast, according to MarketWatch.
Upstart Holdings (UPST) has tumbled another 34% in heavy volume after reporting a 40% drop in second-quarter sales and giving Q3 revenue guidance below analysts’ estimates.
Shares are well below the 50-day line and have flashed a sell signal. The cloud-based AI-lending stock has lost 50% in three days.
Nvidia (NVDA) has sunk over 3% to test its 50-day line, where it now seeks support. Semiconductor stocks have fallen in sympathy with Super Micro Computer.
Palantir Technologies (PLTR) has skidded 9% and is working on its sixth straight day of losses. The AI-focused data analytics and cybersecurity stock has plunged below its 50-day line, giving a sell signal. The stock is on track for its largest decrease since November 7, when it sold off 11.5%.
Be sure to follow Kimberley Koenig on Twitter @IBD_KKoenig for more stock market news.
Analyst comment
Neutral news: The stock market indexes have shown signs of improvement, with the major indexes heading back towards the day’s highs. The Nasdaq is finding support at its 50-day moving average. The Dow is trading above its 21-day exponential moving average. The S&P 500 is still below its 21-day line.
As an analyst, the market is likely to experience some volatility in the short term as investors assess the overall market conditions and the impact of economic data releases. The market may continue to show signs of improvement if positive economic data is released. However, it is important to monitor the market closely for any shifts in investor sentiment or external factors that could affect market performance.
