The volatile Nasdaq Composite returned to negative territory on Thursday, closing more than 0.5% lower as tensions in the Middle East rose again.chip giant Nvidia (NVDA) rose nearly 0.8% as it tested a key technical level, the 50-day moving average.and fellow chip makers taiwan semiconductor manufacturing (TSM) issued a sell signal on the stock market today.
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The Taiwanese semi wasn’t the only chip playdown. The iShares Semiconductor (SOXX) ETF fell 1.8%, falling for the fourth of five sessions. SOXX was at 206.53, correcting 14% from March highs.
Overall volume was down slightly on the Nasdaq and also down on the New York Stock Exchange Wednesday, data showed.
Meanwhile, options traders expressed further concerns.
IBD’s put-call volume ratio soared to 1.19 on Thursday, marking its highest level since January 17th at 1.20. This means that for every 100 bullish call options traded, 119 bearish put options are traded. IBD research has found that when investor pessimism gets too high, stock markets tend to prove the crowd wrong and move higher.
You can track the put-call volume ratio on the General Market Indicators page of the Market Trend landing page, at the bottom of each Big Picture column, or in the Psychological Market Indicators section of Investors.com.
Stock market today: Indices lack clear direction
The NASDAQ Composite Stock Price Index initially fell slightly, but then turned bullish and recorded a moderate rise. But then, the index began to sell off around 12:30 p.m. ET after reports that Israel was planning a counterattack against Iran as soon as Monday. Meanwhile, the Wall Street Journal reported that the United States is pressuring Israel to accept an offer to recognize Palestine as an official state and gain formal diplomatic relations with Saudi Arabia in return.
Crude oil futures fell 0.3% to $81.91 per barrel, while natural gas rose 1.6% to a high of $1.78 per million BTU. Light sweet oil futures continue to outperform U.S. stocks, rising 15% year-to-date.
The Nasdaq index is now down more than 3.5% this week, its worst performance since the tech-heavy index fell more than 3.2% in the first week of January.
Uptrend remains under pressure
For more information on why Investor’s Business Daily’s current outlook has worsened to “uptrend under pressure” and the level of stock market exposure is only 20-40%, see Wednesday’s The Big Please see the picture column.
The S&P 500 lost intraday gains and reversed to a 0.2% drop on Thursday. The stock closed up 5.3% year-to-date. Among IBD’s 197 industry associations, hand tools, hospitals, automakers, design software makers and data storage software companies fell more than 1%.
The Russell 2000 rose 1% in early afternoon trading, but the gains began to wane just after noon ET. Russell fell 0.3%. The Dow Jones Industrial Average rose 22 points. The average price of the 30 blue-chip stocks was 37,775 shares, up 13.7% in 2023 but less than 0.1% since January 1st.
Stocks rise, government bonds fall
Meanwhile, the benchmark 10-year U.S. Treasury yield rose 5 basis points to 4.64%. Yields have risen nearly 80 basis points since January 1.
Stock market investors are paying close attention to the outlook of companies reporting quarterly results. Netflix (NFLX) and intuitive surgery (ISRG) reported its first quarter results after the close of the regular session. Netflix fell, but ISRG rose in after-hours trading.
Even in the medical space, Tenet Healthcare (THC) issued a sell signal on Thursday amid no notable news. The stock fell 5% to 91.08, ending well below its 50-day moving average. Volume was 113% above the stock’s 50-day average, the highest level in about five weeks.
Meanwhile, keep an eye on Bitcoin spot exchange-traded funds ahead of the expected Bitcoin halving event. Some observers believe that this event will increase the scarcity of major cryptocurrencies, leading to higher prices in the long run.
ProShares Bitcoin Strategy (BITO) exchange-traded fund rose 4% to 27.77 on very lackluster volume. The ETF is still trading below its 50-day moving average, but its four-session losing streak has ended. The fund is up 91% since breaking above the 17.70 buy point on a long double-bottom basis.
Stock market leader Nvidia makes profits
Nvidia, a leader in data center chipsets for accelerated computing and artificial intelligence, briefly fell on the stock market today before rebounding to rise as much as 2.5%, confounding traders. By the end of the day, that advance rate had been whittled down to about 0.8%. Volume was 17% below normal levels.
Readers can access the leaderboard for a complete analysis of Nasdaq Mega Cap Technology’s chart action. The company maintains a three-quarter size position in its model portfolio.
The Santa Clara, Calif., company is scheduled to report first-quarter results on May 22. Since last year’s second-quarter results, revenue has pole-vaulted 429%, 593%, and 486% year over year. Current expectations for the just-ended April quarter are for revenue to increase 240% to $24.5 billion and grow 473% to $5.20 per share.
Taiwan Semi stock price analysis
In the case of Taiwan Semi, the semiconductor manufacturing giant saw sales decline more than 6% in the early stages, but its losses narrowed to less than 5%. Nevertheless, the stock fell well below its 50-day moving average, spurring a profit-taking signal. The semiconductor giant also fell below its 10-week line for the first time in more than five months.
The company reported a 9% increase in earnings, equivalent to $1.38 per share. Revenue was essentially unchanged at $20.4 billion. Still, Taiwan Semi has put an end to at least four quarters of sluggish earnings. Investors appear to have taken notice of the company’s revised sales outlook for 2024.
Management also said margins would decline by 50 basis points, according to MarketWatch. Taiwan Semi said Taiwan’s earthquake did not cause major structural damage to its facilities, but rendered a batch of its chips useless.
The big picture: The name of this chip device shakes up the stock market
Today’s stock market: Watch your finances
In the stock market today, banks took a bullish stance on Thursday.
coamerica (CMA) rose 1.7% despite missing Wall Street’s earnings estimates. Comerica’s adjusted earnings were $1.29 per share. That was down 48% from the same period last year, but still beat analysts’ expectations by 17 cents.
This news has helped to encourage our peers, including: JP Morgan Chase (JPM), Dow Jones Stocks, wells fargo (WFC) and american bank (BAC).
Wells Fargo rose 2.7% on rapid volume, rebounding above the breakout point of 58.44 in a tight, narrow consolidation that lasted about five weeks. The stock has also rebounded from its 10-week moving average, justifying a trailing entry.
Bank of America is trying to regain its rising 50-day moving average, which is a bullish sign.
In other aspects of today’s stock market business cycle, DR Horton (DHI) initially rose over 6% on the stock market today and tried to regain its 50-day line, but its gains narrowed to 0.1%.
The homebuilder reported better-than-expected March quarter profits and sales. Gross profit margin maintained at 26%.
The stock recently triggered a stop-loss sell rule when it fell 7% below the 9-week cup-style buy point of 157.93.
Looking for a new breakout? Check here daily
Auto Parts Play triggers early entry
genuine parts (GPC) soared 11% in its biggest sales so far this year. The auto replacement parts giant cleared an early buy point at 157.77. That would likely have triggered a new entry through the trend line around 156-157.
Atlanta-based Genuine Parts reported revenue of $5.78 billion, an increase of $18 million from the year-ago period, and quarterly profit of $2.22 per share, a 4% increase.
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