Dow Jones Stalls As Growth Stocks Suffer; Donald Trump SPAC Plunges Despite This; AMD, Microsoft Earnings Beat Views

The Dow Jones Industrial Average closed virtually flat in an uncertain session as growth stocks took a dive. Donald Trump SPAC Digital World Acquisition (DWAC) plummeted again as he outlined his Truth Social plans. Meanwhile, Microsoft (MSFT) and Advanced Micro Devices (AMD) earnings beat views after the close.

There was some intriguing action during the seesaw session. Tesla (TSLA) hit a profit goal before reversing lower, while Ameresco (AMRC), Mimecast (MIME) and TechTarget (TTGT) passed buy points.


Nasdaq Up As Growth Stocks Flounder

The Nasdaq climbed off lows, but finished with a tiny gain of less than 0.1%. Nvidia (NVDA) was the top gainer here, rising nearly 7%.

The S&P 500 was the leading major index, but its gain of 0.2% was also razor thin. United Parcel Service (UPS) fared best here with a gain of 7%.

The S&P sectors were mostly positive, with energy and utilities leading the way. Industrials and communication services were the only laggards.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 35755.83 +14.68 +0.04
S&P 500 (0S&P5) 4574.67 +8.19 +0.18
Nasdaq (0NDQC ) 15235.72 +9.01 +0.06
Russell 2000 (IWM) 227.86 -1.71 -0.74
IBD 50 (FFTY) 49.50 -0.66 -1.32
Last Update: 4:02 PM ET 10/26/2021

Small caps suffered though, with the Russell 2000 closing down 0.7%.

However it was growth stocks that were given the worst mauling by the bears, with the Innovator IBD 50 ETF (FFTY) giving up 1.3%. MP Materials (MP) and Upstart (UPST) lagged worst, giving up 12.1% and 9.1% respectively.

Dow Jones Today: Cisco Stock, PG Lead

The Dow Jones Industrial Average was basically flat, though it closed ever so slightly in positive territory.

Cisco Systems (CSCO) had been the top stock on the Dow Jones today for much of the session, closing with a gain of 1.2%. The stock now has its 50-day moving average in its sights as it forms a base.

But it ended up losing out to consumer goods giant Procter & Gamble (PG), which posted a gain of 1.4%.

Chip giant Intel (INTC) was lagging the most, falling around 2%. It remains marooned below its 200-day line.

Microsoft Earnings Beat; AMD, GOOGL Do This

A trio of key earnings reports had been due after the stock market closed.

AMD stock had been expected to earn 66 cents per share on sales of $4.1 billion. But the Santa Clara, Calif.-based company earned an adjusted 73 cents a share on sales of $4.31 billion in the September quarter

During Tuesday’s session the chip leader  had pared some gains, but remained up just over 1%. It is just out of buy range after breaking past a 114.59 buy point last week.

For the current quarter, AMD expects to generate sales of $4.5 billion vs. Wall Street’s estimate of $4.25 billion.

Chip stocks were boosted after analysts were enthused by Facebook‘s (FB) projected spending on data and network infrastructure. This is seen as a tailwind for chipmakers.

The positive AMD earnings could send chip stocks higher still.

Microsoft earnings also came in above views. The Redmond, Wash.-based company earned an adjusted $2.27 a share on sales of $45.3 billion in the quarter ended Sept. 30

Analysts expected adjusted earnings of $2.08 per share on revenue of about $44 billion.

The software behemoth was up 0.5% ahead of its report, and remains in buy range above a flat base entry of 305.94. It is actionable as high as 321.24.

Google parent Alphabet also posted an earnings beat. Earnings jumped 71% to $27.99 per share, which included gains on equity investments. Gross revenue rose 41% to $65.12 billion

But while  internet search advertising revenue came in above expectations, YouTube and cloud computing sales were light in the Google earnings report.

Analysts had been expecting adjusted EPS of $23.22 per share, up nearly 42% from a year earlier, with gross revenue jumping 37% to $63.5 billion. Cloud computing and YouTube advertising revenue growth are key financial metrics.

The stock was also up ahead of earnings, rising over 1%. It remains shy of a 2,925.17 flat base entry. Google stock took a beating following Snap‘s (SNAP) results.

All three of these tech stars are members of the prestigious IBD Leaderboard list of leading growth stocks.

Donald Trump SPAC Dives Despite Statement

A listed special purpose acquisition company linked to former President Trump fell hard once again.

Digital World Acquisition closed down about 30% for the day despite Trump outlining his plans for his mooted social media site Truth Social.

He boasted in a statement that he will offer a “Big Tent” platform as he attempts to take on technology giants such as Twitter (TWTR).

“Unlike with the Big Tech platforms, there will be no shadow-banning, throttling, demonetizing, or messing with algorithms for political manipulation,” Trump said. “We will not be treating users like lab rats for social experiments, or labeling alternative views as ‘disinformation.’ “

Digital World Acquisition skyrocketed last week on the news it will serve as a vehicle to take the Trump Media & Technology Group public via a merger.

However it closed down more than 66% off its all-time high of 175, which it reached Friday. In addition to Truth Social, the firm will also offer a subscription-based video-on-demand service to be called TMTG+.

Trump has seen his access to key social media networks limited severely since the Jan. 6 Capitol riot.

The SPAC stock is still up overall, and it had been trading at around the 10 level for much of October.

Tesla Hits Profit Goal, Reverses Lower

Tesla managed to hit its 20% profit goal from a 900.50 buy point from a deep cup base, MarketSmith analysis shows. However it then reversed, closing down 0.6%.

The fact it hit its 20% profit goal so quickly means it has triggered the eight-week hold rule for those who used that entry.

In addition to its latest cup base buy point, the EV giant also offered investors a slew of earlier entries during its consolidation.

TSLA got a big boost after it posted another record quarter for the firm on Oct. 20.

It was propelled higher still Monday after Morgan Stanley upped its price target from 900 to 1,200, citing higher volume expectations after the company’s Q3 report. In addition, rental car giant Hertz ordered 100,000 Tesla vehicles for its fleet.

Tesla stock was the toast of Wall Street on Monday after it managed to join the $1 trillion market-cap club. It remains part of that elite club, despite its reversal.

Tesla stock is a member of the prestigious IBD Leaderboard list.

Market Rally Stalls, Trump Stock Dives; 3 Key Earnings Late

These 3 Stocks Pass Buy Points

TechTarget is in a buy zone after breaking past a cup-with-handle entry of 92.85. The stock was up nearly 9%, but the fact earnings are due in eight days is a risk.

The stock boasts excellent all-around performance, though earnings are particularly strong. The data-driven marketing services stock was featured in today’s IBD Live broadcast.

Renewable energy stock Ameresco is sitting just under its entry after passing a cup-without-handle buy point of 75.98. Volume was weak, too.

Both stock market and earnings performance are strong here, and the relative strength line is spiking.

Cloud security stock Mimecast is one to watch for now after its slipped back below a cup base entry of 71.55 after trying to break out.

Earnings are imminent again here, which makes it a good watchlist candidate. The firm is part of the computer software security industry group, which ranks No. 9 out of the 197 groups IBD tracks.

Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.


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