The Dow Jones Industrial Average closed near session lows after ceding ground early as Walt Disney jumped following its report. Famed fund manager Cathie Wood loaded up on Roblox despite a huge plunge for the stock. China stock Alibaba vaulted after earnings.
Meanwhile, a couple of stocks attempted breakouts amid the buoyant early action. But Expro Group and Progress Software had mixed luck after moving above entries.
Stocks initially jumped after data showed consumer prices in July rose 3.2% vs. July 2022, cooler than economists consensus view for a 3.3% lift. The rise of 0.2% from June was in line with expectations. Core prices, which exclude food and energy, were up 4.8% year over year and 0.2% from June. This met expectations. Investors are hoping falling inflation will cause the Federal Reserve to be less aggressive on interest rates.
"Stocks pared gains after summer doldrums settled in and the buying dried up," Oanda senior market analyst Edward Moya told IBD. "The S&P 500 is at some key technical levels and it seems buyers are not willing to try to push it higher."
Treasury yields rose. The 10-year yield jumped 10 basis point to 4.11% while the two-year yield rose 5 basis point to 4.85%. The yield curve remains inverted.
Nasdaq Gains Vanish As Small Caps Slide
The tech-heavy Nasdaq saw almost all of its early gains disappear as it closed 0.1% higher. MercadoLibre was a top performer here, rising 5.7% and clearing a cup base buy point of 1,365.64.
The benchmark S&P 500 fared even worse, closing virtually flat. Tapestry stood out here for the wrong reasons, plunging 15.9% on the news it plans to buy rival Capri Holdings for $8.5 billion.
The S&P 500 sectors ended the session mixed. Communication services and consumer discretionary fared best in the stock market today. Utilities and real estate lagged the most.
The bears nibbled at small caps, with the Russell 2000 falling 0.4%. Growth stocks were also mauled, with the Innovator IBD 50 ETF closing the day down 0.8%.
Dow Jones Today: Disney Stock Pops After Earnings
The Dow Jones flirted with negative territory. It ended the session with a meager gain of 53 points, a 0.2% gain.
Disney was the top performer on the Dow Jones today, popping despite posting mixed results late Wednesday. While it is struggling with slowing streaming growth and high content costs, Wall Street cheered its second set of major price increases in less than a year.
Among those hikes were more than 20% increases to the cost of the ad-free versions of Disney+ and Hulu. The cost of the ad-supported versions will not change. Disney Parks, Experiences and Products revenue jumped 13% over the year to $8.33 billion.
But while Disney stock gained 4.9%, its lift year to date of just over 3% badly lags the benchmark S&P 500's gain of nearly 17%. Disney gapped up through its 50-day moving average. But with the stock still below its 200-day line, this would be a very aggressive entry point.
Intel and Salesforce were the next best performers on the Dow Jones, with gains of 1.2% each. Goldman Sachs lagged as it skidded 0.7% and sank further below the 200-day line.
Cathie Wood Loads Up On Roblox Stock After Plunge
Fund manager Wood is never afraid to buy on the dip. Some would say the ARK Invest CEO outdid herself after loading up on Roblox stock Wednesday.
At its lows for that session, Roblox lost 23% on the previous day's closing price. It was hammered after missing analyst views for both earnings and revenue.
A silver lining for bulls is that daily active users rocketed 25% year over year.
She snapped up just under 664,000 shares for her ARK Innovation ETF, almost 122,000 for the ARK Next Generation Internet ETF and just under 80,000 for the Ark Fintech Innovation ETF.
And Cathie Wood is not the only fan of Roblox stock. Wedbush analyst Nick McKay upgraded the stock to outperform from neutral. He has set a price target of 37. In a research note he said the stock "may have the most compelling growth trajectory among the video game names in our coverage universe."
Roblox stock rallied 3.9% Thursday but remains firmly rooted below its 50-day and 200-day moving averages, MarketSmith analysis shows.
Alibaba Earnings Boost China Stocks
China e-commerce play Alibaba had a strong session after it posted solid results.
The firm managed to beat analysts expectations on the top and bottom lines. A 14% pop in revenue was its best year-over-year sales growth since 2021. Management also touted its efforts in artificial intelligence, telling analysts "the growth opportunity driven by AI services has just begun."
Alibaba stock finished the session up 4.6% and sits above both its major and its short-term moving averages.
Other China stocks also rose. Vipshop rose 0.4% while Baidu lifted 0.6%, Tencent rose 0.6% while Warren Buffett-Backed BYD rose 0.9%.
Outside Dow Jones: These Stocks Test Buy Points
Even with the current stock market uptrend under pressure, it is important to keep an eye on breakouts.
Oil well construction play Expro Group ended the day in a buy zone after clearing a cup-with-handle entry of 23.72.
Overall stellar performance has netted it an IBD Composite Rating of 97. It is currently in the top 6% of stocks in terms of price performance over the last 12 months.
Progress Software had less luck, reversing back under its buy zone after testing a cup-base entry of 61.79. The database software play boasts strong earnings and stock market performance but has been struggling to move decisively higher of late.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
