The Dow Jones Industrial Average held a modest gain late morning Friday, but sellers hit tech stocks once again, raising the specter of more rally-killing distribution days.
Selling was concentrated in the Nasdaq, with Tesla and Airbnb down sharply. Nvidia and Advanced Micro Devices lagged as well, along with other semiconductor stocks.
IBD's three chip-related groups — chipmakers, fabless and chip equipment — showed losses of around 2%. The enterprise software group was also down around 2%.
Dow Jones energy giant Chevron was an early gainer, up nearly 2%. The stock has been hovering near its 200-day line since breaking through its 50-day moving average.
Oil and gas stocks outperformed after Russia signaled a 500,000 barrel cut in daily output, starting next month. WTI crude oil futures rose 2% to just over $79.50 per barrel. Halliburton and BP were top gainers in the MarketSmith Growth 250.
The 10-year Treasury yield strengthened a bit, up 5 basis points to around 3.73%. The 10-year yield is up sharply after hitting a low at 3.33% last week.
Dow Jones stock Salesforce fell hard after jumping more than 2% Thursday. Dan Loeb's Third Point hedge fund has taken a stake, joining other activist investors like Elliott Investment Management, Starboard Value and others, according to the Wall Street Journal.
Outside the Dow Jones
Sellers pummeled the Nasdaq composite for a third day. The index is down 2.6% this week after five straight weekly price gains. Thursday's distribution day was the first for the index since Jan. 18.
The stock market uptrend has delivered strong moves from several top-rated growth stocks. But if distribution days start to cluster, it will be a formidable headwind for stocks.
Google parent Alphabet ticked lower, adding to two days of sharp losses. Wednesday's AI event didn't go exactly as planned when Google's Bard AI chatbot gave a wrong answer.
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Alphabet lost $172.95 billion in market cap Wednesday and Thursday, the largest two-day loss for the company on record, according to Dow Jones data.
After 14 gains in 15 trading sessions and stalling-type price action Thursday, Tesla gave back more than 5% Friday. But it's still holding comfortably above short-term support levels.
Selling pressure was muted in the S&P 500 as the index holds just above its 21-day exponential moving average. It's a key support level to watch. The iShares Russell 2000 ETF broke through its 21-day line in early trading Friday but moved off lows.
After a close just above the 50-day line Thursday, the Dow Jones was holding near the key support level.
Inside the S&P 500, PayPal faded off highs after reporting Q4 results. CEO Dan Schulman said he's retiring at the end of this year.
Earnings Winners
Despite early losses, there were many earnings winners.
Cloudflare faded but still added 1% after reporting a 500% surge in quarterly profit. Revenue increased 42% to $274.7 million.
Fast-growing software firm Alteryx surged near the top of a cup base. The provider of data analytics software reported a 367% jump in quarterly profit. Revenue of $301.1 million was well ahead of estimates and up 73% year over year. The company also issued strong guidance.
Diabetes stock Dexcom surged 9% after earnings and revenue topped expectations. The stock gapped bullishly above its 50-day line
In the enterprise software group, SPS Commerce topped a 146.91 entry early in the session. Shares were off highs, but the stock still rose 5.5% after reporting its second straight quarter of accelerating revenue growth.
Dow Jones has delivered strong earnings reports recently from Boeing, JPMorgan Chase and American Express.
ETF News
The Energy Select Sector SPDR ETF jumped above its 50-day line, rising 3%.
The SPDR S&P Retail ETF was under more selling pressure after Thursday's bearish reversal. The ETF is down more than 6% so far this week.
After a sharp drop to the 50-day moving average Thursday, the Materials Select Sector SPDR ETF edged lower as it tries to hold support at the 50-day line.
Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.
