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Stock Market Confused; This Chip Stock Soars After Earnings

by Hataf Finance
12 minutes read

The stock market clawed ahead in afternoon trading Tuesday, as investors cautiously awaited a number of upcoming events this week — the Federal Reserve’s decision on interest rates, Apple‘s (AAPL) earnings, and the October jobs number. But reports already in hand show home prices are up more than expected, and the consumer remains strong.


The August Case-Shiller Home Price Index rose 1% vs. the 0.7% estimate from economists, and was higher than the revised 0.8% July increase. The month-over-month metric measures the value of residential real estate in 20 metropolitan U.S. regions.

Meanwhile, the Conference Board’s October U.S. Consumer Confidence Index reading of 102.6 was higher than the 100.0 consensus, but slid from the revised 104.3 September number. A number over 100 indicates consumers are feeling more optimistic. Consumer spending accounts for more than two-thirds of the U.S. economy and a forward look on the direction of the economy.

Stock Market Action

As the Dow Jones Industrial Average improved to a 0.1% gain, the Nasdaq also edged 0.1% higher on the stock market today. The S&P 500 climbed 0.3%, and the small-cap Russell 2000 rallied 0.8%.

The Nasdaq bumped up against its 200-day moving average and found resistance at that level. While they reversed earlier losses, the S&P 500 and Dow both remained below their 200-day lines.

Volume rose on both the New York Stock Exchange and the Nasdaq from Monday’s levels at the same time of day.

The Invesco QQQ Trust (QQQ) exchange traded fund, which tracks the Nasdaq 100, reversed course and added 0.1%. The Innovator IBD 50 ETF (FFTY) notched up 0.2%.

The yield on the benchmark 10-year Treasury note shed 1 basis point to 4.86%.

Fed Decision, Apple Reports And October Jobs Report

Wednesday brings the Fed meeting decision on interest rates. There seems to be no chance of a rate hike at this week’s meeting and a chance of roughly 25% in December, according to CME FedWatch Tool.

Magnificent Seven stock Apple will report its quarterly earnings Thursday after the close. This is a closely watched report by the stock market as Apple’s business spills over into other sectors. Apple stock eased from an earlier 1% loss to around 0.1% on Tuesday afternoon. Shares are finding resistance at the 200-day moving average.

UBS cut its sales forecast for iPhones and Macs, citing soft demand in the U.S. and China. The brokerage also lowered its September-quarter iPhone revenue by 1% and Mac revenue by a hefty 4.7%, as demand did not increase in September as expected. UBS analysts also lowered their forecasts on December revenue by 3% and full-year fiscal 2024 sales by 1%.

Elsewhere, October nonfarm payrolls are expected to grow 183,000, which would be pale compared with the 336,000 increase in September, according to Econoday. Private payrolls are projected to rise 143,000 — also lower than September’s 263,000 increase.

Stock Movers: Verve Therapeutics Rockets

Verve Therapeutics (VERV) soared more than 25% in heavy trading after the cardiovascular gene-editing company expanded its relationship with drug giant Eli Lilly (LLY) on a licensing deal. Meanwhile, shares of Lilly retreated more than 2%.

VF Corp. (VFC) shares sold off more than 14% after the outdoor apparel maker released its September-quarter results, with a miss on earnings estimates and higher sales. The retailer lowered its full-year fiscal 2024 cash flow estimate to $600 million from its previous outlook of $900 million. The company also cut its dividend to nine cents from 30 cents a share in the prior quarter.

The stock is on pace for its largest one-day percent decrease since Dec. 5, 2022, when it fell 11.17%, according to Dow Jones Market Data.

Advanced Micro Devices (AMD) stock rose more than 1% ahead of its third-quarter earnings release Tuesday, due after the market close. The semiconductor stock is trading below its 200-day line.

Dow component Amgen (AMGN) gapped down more than 3%, after the therapeutics developer reported its third-quarter earnings and sales topped expectations. Investors seemed to focus on the drop in sales for its drug Enbrel.

AMGN stock was already below its 50-day line and fell further below on Tuesday’s drop, heading toward the 200-day line. Shares are on track for their largest one-day percentage drop on the stock market since Sept. 13, 2022, when they sank 4.53%, according to Dow Jones.

This Network Stock Leads The S&P 5oo

Arista Networks (ANET) gapped up around 13% Tuesday after the company reported third-quarter earnings and sales late Monday that were higher than expected. The cloud network stock is in a flat base with a 198.70 buy point. The IBD 50 stock reclaimed its 50-day moving average on the move. Its relative strength line hit a 52-week high, according to MarketSmith pattern recognition.

ANET stock was the biggest gainer on the S&P 500 Tuesday.

Pinterest (PINS) gapped up more than 18% in huge volume and crossed the 28.90 buy point of a double-bottom-base. Shares are in the 5% buy zone reaching to 30.35, but remember that breakouts often fail in a weak market such as this one.

The social media company reported better-than-expected adjusted third-quarter earnings and sales and an upbeat fourth-quarter revenue outlook. PINS stock retook its 50-day line.

Among chipmakers, IBD 50 stock Nvidia (NVDA) sank 2% in heavy volume after two positive days. It is trying to hold support around the 400 level. And Monolithic Power Systems (MPWR) jumped more than 4% in heavy volume. Monolithic released its third-quarter results and issued a fourth-quarter outlook. It also announced a $640 million stock repurchase program.

Other Stock Market Movers: Caterpillar Stock Sinks

Dow Jones stock Caterpillar (CAT) gapped down about 6% after the heavy equipment maker reported third-quarter profit and revenue that beat estimates. But it cited a lower order backlog and only “slightly” higher fourth-quarter revenue.

Shares fell further below the 200-day line. CAT stock is on pace for its largest decrease since April 22, 2022, when it fell 7%, according to Dow Jones Market Data. CAT was the worst performer on the Dow Tuesday morning.

Lattice Semiconductor (LSCC) plunged after the chip company slightly beat top- and bottom-line forecasts, but gave a disappointing current-quarter revenue outlook. LSCC stock fell further below its 200-day line to its lowest point in nearly a year.

Sarepta Therapeutics (SRPT) plummeted around 40% after the company reported mixed results on its gene therapy drug, Elevidys, used for a muscle-wasting disease in boys. Shares traded in enormous volume on Tuesday and were halted overnight.

ELF Beauty (ELF) tumbled in heavy trading ahead of its earnings report on Wednesday. The cosmetics and skin care stock sank below its 200-day line in stock market action. ELF stock was the worst performer in the IBD 50 on Tuesday.

Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.


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