Stocks mostly fell Thursday, as Dow component Salesforce led a drop in software firms. However, a few stocks elsewhere broke out or expanded their gains after moving past buy points in the stock market today. They included trading app Robinhood, hospital operator Universal Health and computing gear behemoth HP.
Chip firms soured in the final hour of trading on media reports that the U.S. government is seeking to limit sales of AI chips and other high-performance-computing gear to the Middle East. Bloomberg reported that the move is a fresh attempt to prevent China from obtaining the most advanced semiconductors on the market.
VanEck Semiconductor ETF fell 1.4% to drift back near a 239.14 consolidation buy point. Much of the drop came in the final 45 minutes of trading.
Ahead of an inflation report due Friday before the opening bell, the Nasdaq composite slumped 1.1% on Thursday. Yet the tech-centered index holds a year-to-date gain of nearly 12%, making it a leader among indexes.
The S&P 500 kept losses modest at around 0.6%. The large-cap benchmark no longer has a gain in the second quarter with one trading day left in May and all of June still to go. But the Russell 2000 rallied 1.1%. It had sunk in five of the prior six sessions.
The S&P 500 is up nearly 10% since Jan. 1, outpacing a slim 1% advance by the Russell 2000.
Meanwhile, the Dow Jones Industrial Average lost 307 points, or 0.9%, after dropping to 38,000 early in the session. Keep in mind, however, that the Dow is a price-weighted index. Thus, the loss of more than 53 points by Salesforce made a disproportionate impact on the 30-stock index.
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Despite the overall drop in large caps, advancers actually led decliners by more than a 3-1 margin on the NYSE. On the Nasdaq, gainers led losers nearly 5 to 3.
Meanwhile, Universal Health rose more than 3% and moved past a cup with handle that gives a 182.92 entry. The relative strength line bolted into new high ground.
The hospital chain last month posted a 58% jump in March-quarter profit to $3.70 a share as revenue accelerated 11% vs. year-ago levels to $3.84 billion. UHS stock remains in the 5% buy zone to 192.07. Universal holds a strong 95 IBD Composite Rating.
Dorian LPG, a leader in the liquefied petroleum gas market, has excelled since its May breakout past a 42.75 buy point in a cup with handle. Shares have since gained nearly 20% and hit an all-time high of 51.48 Thursday.
Robinhood, featured in Thursday's IBD Live show, powered further past a 20.55 entry and has moved beyond the 5% buy zone.
Salesforce Selling Whacks Enterprise Sector
Salesforce reported a beat on the bottom line, earning $2.44 a share in the April-ended fiscal first quarter. That beat Wall Street's forecast by 7 cents. However, while sales rose 11% to $9.13 billion, the total came roughly $20 million short of views. Plus, the cloud-based business software titan issued a soft outlook despite heightened expectations that artificial intelligence would drive further strong growth.
Shares crashed nearly 20%. Salesforce's woes threw cold water on the entire sector.
Enterprise software innovator Nutanix plunged 23% in massive volume on the stock market today. First-quarter earnings jumped 189% to $1.04 a share on a 17% lift in sales to $524.6 million. But Nutanix saw second-quarter revenue at $530 million to $540 million, below views for $546.1 million. The stock triggered a sell signal by gapping below its 50-day line.
Further, the iShares Expanded Tech-Software ETF gapped down more than 5% in nearly quadruple average volume. The popular software-sector exchange traded fund is struggling to hold support at the 200-day moving average.
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Major Cathie Wood Holding Plummets
Outside the Dow, UiPath, a developer of productivity-boosting enterprise software bots, plummeted more than 34% to about 12. Earlier, it dropped to levels not seen since January 2023.
UiPath initially ushered in a sell signal in February, when it fell 7% from a buy point of 26.53. The stock's breakout on Feb. 10 lasted all of two days, then shares reversed lower.
According to the website for Cathie Wood's ARK Funds, UiPath held a 5.5% weighting in ARK Innovation.
UiPath reported first-quarter adjusted profit of 13 cents a share, a penny above FactSet's forecast. However, the company is now expecting fiscal 2025 sales of $1.41 billion, well below its previous estimate of roughly $1.56 billion. UiPath added that co-founder Daniel Dines will return as the company's chief executive.
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The yield on the benchmark 10-year bond fell 7 basis points to 4.55% after rising more than 15 basis points the prior two days.
On Thursday, the market absorbed a downward revision in real U.S. GDP output to 1.3% in the first quarter of this year, down from 1.6%. Bill Adams, chief economist at Comerica Bank in Dallas, said the revision was "no surprise after the April retail sales report made downward revisions to consumer spending in February and March."
On Friday before the market open, watch for the personal consumption expenditures (PCE) price index, which will provide a reading on April inflation. Econoday forecasts the PCE will rise 2.7% year over year and core PCE will climb 2.8% vs. a year earlier. Both figures would reflect no change from year-over-year increases in March.
Spot bitcoin ETF ProShares Bitcoin Strategy rose more than 3% before that gain got tamped down to 1.9%. Bitcoin at one point jumped 3% to near $69,400.
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Earnings Movers
Kohl's cratered and also led the downside in the stock market today after posting a surprise loss of 24 cents a share in the latest quarter. Capital IQ was looking for a net profit of 7 cents. The discount retailer also trimmed its full-year outlook.
Kohl's shares fell more than 22% as volume zoomed more than six times normal levels. Back in early April, the stock made a feeble breakout attempt at 29.45 and quickly fell 7% from that entry, delivering a sell signal.
On the upside, former Dow industrials member HP blasted 16% higher in heavy trading. It was its best day in more than 11 years. The stock leapt out of a long consolidation with a 33.90 entry. Arguably, HP stock cleared an early trendline entry point near 30 two weeks ago.
HP's sales fell 1% to $12.8 billion in the April-ended fiscal second quarter. Profit inched up 4% to 82 cents a share, marking a third straight quarterly increase in the bottom line.
Stock Market Today: After The Bell
After the close, Dell Technologies plummeted more than 14% following the company's April-quarter earnings report. And Marvell Technology fell more than 2% after its quarterly results were announced.
Please follow David Chung on X/Twitter: @saitochung and @IBD_DChung
