The Dow Jones Industrial Average dived as so-called Magnificent Seven stocks such as Apple, Microsoft, Tesla and Google parent Alphabet tumbled.
Meta Platforms plummeted amid an Israel-Hamas warning while Amazon.com rose in extended trading after an earnings beat. Warren Buffett raised a key holding.
Meanwhile, a trio of stocks were digging in near buy points despite the tough action: Baker Hughes, EQT and Packaging Corp. Of America.
GDP Comes In Hot
Q3 gross domestic product grew 4.9% year over year compared to second-quarter growth of 2.1%, according to Commerce Department data. Economists had expected a rise to 4.2%. This was the biggest gain since Q4 of 2021. Despite that, the CME FedWatch Tool says it is near certain the Fed will hold interest rates steady at the next policy meeting.
Meanwhile, first-time unemployment claims rose by 10,000 to 210,000, according to the Labor Department. Analysts had expected new claims would rise to 207,000.
Oanda senior market analyst Edward Moya told IBD that investors are currently weighing up a challenging economic backdrop.
"It looks like the latest round of data suggests CAPEX (capital expenditure) spending is tumbling and 'higher interest rates for longer' is not going away just yet," he said. "Wall Street hasn't been impressed with big-tech earnings so far and the remaining ones, Amazon and Apple, will likely struggle given the weakening outlook for the U.S. economy."
Moya also said that strong demand from today's seven-year Treasury note auction shows "investors are still concerned with all the geopolitical risks that remain on the table."
Nasdaq Lags As Tech Stocks Get Walloped
The tech-heavy Nasdaq was hit the hardest out of the major indexes. It closed near session lows as it fell 1.8%. Align Technology cratered 24.9% after the firm missed Wall Street's third-quarter expectations.
The S&P 500 also hit got late selling as it fell 1.2%. Whirlpool was slapped 15.8% lower on disappointing guidance.
The S&P 500 sectors closed mainly lower. Real estate and utilities fared best in the stock market today. Technology and communication services had the toughest time.
Small caps outperformed as the Russell 2000 rose 0.3%. Growth stocks were mauled by the bears, though, with the Innovator IBD 50 ETF falling 2%.
Dow Jones: IBM Earnings Impress, Boeing Shines
The Dow Jones industrials tried to fight back before bears hammered the index lower. The index closed down 252 points, or 0.8%.
International Business Machines outperformed, rising 4.9% after the firm posted third-quarter results that came in above analyst expectations.
Verizon Communications, Boeing and Merck also had good sessions. VZ rose 2.3%, BA lifted 0.8% and Merck gained 1.9%.
Outside of Magnificent 7 names, Nike fared worst on the Dow Jones today. It fell 3.4%. Visa also struggled, off 2.4%.
Meta Stock Plunges Amid Israel Hamas Warning
Meta Platforms finished off lows but still down 3.7% despite the firm beating Q3 earnings and revenue views.
It was hit after CFO Susan Li warned about potential softness in advertising due to the Israel-Hamas war.
"While we don't have material direct revenue exposure to Israel in the Middle East, we have observed softer ad spend in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook," she said.
CEO Mark Zuckerberg had highlighted the positives, touting the launches of its Quest 3 headset, Ray-Ban Meta smart glasses, and its AI studio.
The bearish reaction to earnings saw Meta stock exposure get trimmed today on IBD's Leaderboard list of hand-picked stocks.
Magnificent 7 Slide, Apple Stock Loses Key Level
But it was not just Meta stock that was flailing. The rest of the so-called Magnificent Seven also got routed.
Apple stock ended the session down 2.5%. It has now fallen below the 200-day moving average, MarketSmith analysis shows.
Microsoft stock lost ground on a cup base entry of 366.78 as it fell 3.8%. It topped an early entry at 340.86 after the earnings report, but is now below it. Microsoft is holding above the 50-day moving average.
Tesla stock also fell below the 200-day moving average as it fell 3.1%. It is now down about 14% in the space of a month.
Google parent Alphabet fell another 2.7% today on top of the previous session's 9.5% decline. The search giant is down 9.8% so far for the week.
According to Piper Sandler analyst Thomas Champion, Alphabet's and Microsoft's recent reports "suggest 'flattish' growth is likely more realistic than re-acceleration into 3Q."
"While optimizations continue — and were mentioned in both prints — we think investor expectations for 3Q have already reset to (around) 12% for AWS, similar to last quarter," he wrote in a note to clients.
And Nvidia finished near session lows as it dipped 3.5%. The Leaderboard stock continues to consolidate below its 50-day line.
Futures: Correction Intensifies As Titans Tumble; Amazon Volatile Late
Amazon Earnings Beat Views
The other name that makes up the Magnificent Seven posted earnings after the close.
Amazon earnings came in at 94 cents per share while revenue came in at $143.1 billion. EPS had been seen rising 190% to 58 cents, according to Zacks Investment Research. Revenue had been expected to pop 11.4% to $141.53 billion.
Amazon Web Services revenue came in slightly light while advertising revenue came in above views. Amazon Web Services growth is a key metric.
Amazon stock fell 1.3% in regular trading but rose nearly 2% after hours. It is currently holding above the 200-day moving average.
Warren Buffett Buys This Stock
Investors are always keen to find out the moves of stock pickers. And few are more storied than Berkshire Hathaway CEO Warren Buffett.
It has emerged the Oracle of Omaha's firm has raised its stake in Occidental Petroleum. The company raised its stake by 3.9 million shares. This raised its total holdings in the energy stock to 228 million shares.
The firm made the big purchase on Monday through Wednesday, a filing with the Securities and Exchange Commission showed.
Last year, Berkshire received regulatory approval to purchase up to 50% of the oil giant. It now holds just under 26% of shares.
Mobileye Stock Stands Out After Earnings
Mobileye Global was a highlight on a tough day for the stock market.
The autonomous driving play soared 7.2% after the firm bested earnings and revenue views. Its next challenge will be to regain its 50-day moving average.
Israel-based Mobileye saw EPS rise 47% to 22 cents as sales popped 18% to $530 million in the September quarter. Analysts expected Mobileye earnings of 17 cents a share on revenue of $529 million.
For the full year, Mobileye trimmed the high point of its revenue guidance range but raised its profit target. It raised its forecast for adjusted operating income to a range of $648 million to $665 million. Its prior range was $600 million to $631 million.
These Stocks Flash Sell Signals
A number of stocks flashed sell signals by falling below the 50-day moving average Thursday.
Stocks that fell decisively below the key technical benchmark in volume included Oceaneering International, Arista Networks and Celestica. Both OII and CLS were hit following earnings.
It is important for investors to note that one or two bursts of institutional selling is often a signal of more selling ahead.
Outside Dow Jones: 3 Stocks Show Strength
With the market in a correction, now is the time to be building one's watchlist. Here are some candidates.
Baker Hughes showed strength today as it forms a flat base with an ideal entry point of 37.58.
Overall performance here is top-notch, with its IBD Composite Rating a perfect 99.
EQT recaptured its 50-day moving average as it eyes a 44.88 cup-with-handle entry. The integrated oil & gas play is among the top 8% of stocks in terms of price performance over the last 12 months but its earnings performance has weakened.
Packaging Corp. of America saw its relative strength line hit new heights as it builds a flat base. The ideal buy point here is 158.66. Big Money is keen on the stock, with 62% of shares currently being held by funds according to MarketSmith data.
Please follow Michael Larkin on X, formerly known as Twitter, at @IBD_MLarkin for more analysis of growth stocks.
