Profit-taking remained a priority Thursday as the Nasdaq slipped back below the 20,000 mark and the other major indexes slipped as well. Adobe got hammered on quarterly results, increasing its year-to-date loss to more than 20%.
In late afternoon trading, the Nasdaq composite and the S&P 500 dropped 0.7% and 0.5%, respectively. On Wednesday, the Nasdaq surged 1.8% and rallied to an all-time high of 20,055, putting it up 33.6% since Jan. 1. The Nasdaq 100, which also struck an all-time high on Wednesday, backtracked nearly 0.7% Thursday afternoon.
The Dow Jones Industrial Average initially edged slightly higher in the morning before reversing. It ended the day 0.5% lower. At the day's high of 44,208, the Dow held a solid 17.3% year-to-date gain. The IBD suggested exposure level remains at 80%-100% for active trading portfolios.
UnitedHealth was the day's biggest point loser within the Dow industrials, off nearly 18 points. The Relative Strength Rating has suffered, currently at 29 out of a best-possible 99. This means the managed health care firm has outperformed only 29% of all companies in the IBD database over the past 12 months. Caterpillar, Home Depot and Sherwin-Williams fell five points or more.
Breadth was negative in the stock market today. Decliners outpaced risers by a near 3-to-1 margin on the New York Stock Exchange and roughly 5-to-2 on the Nasdaq.
The NYSE composite saw its early tiny decline grow to 0.6% in late-afternoon trading. The index has also gotten closer to its 50-day moving average amid a fifth drop in six sessions. Down 1.7% for the week, the NYSE index is also testing its 10-week line on a weekly chart.
The Russell 2000 slumped 1.4% and is down nearly 2% so far this week.
Inflation Metric Hits Stocks
Indexes cooled on news of hotter-than-expected prices at the wholesale level. The November producer price index jumped 0.4% vs. the prior month, above the Econoday estimate of a 0.3% increase, while PPI rose 3% year over year vs. a 2.6% expected increase.
The data followed a report on consumer prices that showed the housing market cooling off, boosting expectations that the Federal Reserve will trim interest rates for a third time this year at its final meeting next Wednesday.
In stocks, Adobe plunged nearly 14% Thursday after the software maker offered a disappointing outlook in the wake of its earnings report. Investors apparently are growing impatient with Adobe's efforts to monetize artificial intelligence tools for content creation and digital marketing.
2:56 p.m. ET
Stock Market Today: Transit Firm Hits Entry
Some transportation sector players have been doing well lately, especially airlines. But trucking firm C.H. Robinson Worldwide broke out of a new base. Shares jumped roughly 5% and rolled past a 113.10 proper buy point in an eight-week flat base.
In a flat base, the decline should not exceed 15% from high to low. In C.H. Robinson's case, the flat base showed a correction of less than 13%. The stock had fallen sharply on Halloween, when the logistics expert reported earnings per share up 45% to $1.48, and revenue up 7% to $4.64 billion. But C.H. Robinson has recovered from that day's big loss and more.
In the MarketSurge Growth 250, Gambling.com led the upside, shooting sharply ahead in huge volume. Gambling.com recently joined the IBD Sector Leaders screen and has cleared a deep cup pattern at 14.83.
The company announced Thursday that it acquired Odds Holdings, the parent company of OddsJam. Odds shareholders will receive an initial $80 million and up to an additional $80 million based on Odds' performance through 2026.
Also in the MarketSurge Growth 250, Hut 8 flexed strength. The bitcoin miner rose as much as 7% higher after Tuesday's test of bullish support at the 21-day exponential moving average. Recently, shares broke out of a deep cup pattern at 21.10 and remain extended.
1:59 p.m. ET
Arm Clears Trendline Entry
While Adobe slumped more than 10%, semiconductor design innovator Arm enjoyed a bullish morning. Shares rallied more than 3% and made a session high of 150, the highest price in more than four weeks. Arm is building a relatively shallow base after a breakout past a 152.39 entry in a deep cup with handle failed.
Arm, based in the U.K., is also trying to rise above a trendline near 148-149. The company posted a disappointing 19% drop in fiscal second-quarter earnings to 30 cents a share. Revenue growth of 5% was the smallest year-over-year gain in five quarters. But Wall Street is anticipating a rebound in the bottom line, seeing earnings rising 17%, 45% and 13% in the next three quarters. Arm has 1.04 billion shares outstanding and a market capitalization of $155 billion.
Also, highly rated database software firm Confluent rose modestly but remains down sharply for the week. The midcap growth stock is trying to clear resistance near 34-35. Telecom network gear giant Ciena soared after its earnings report; the stock has rallied nearly 40% since clearing a large cup with handle at 59.24 in late September.
10:32 a.m. ET
Stock Market Today: Spotify, Axon Among Market Movers
Other solid movers to the upside in the stock market today included Spotify, Leaderboard stock Axon Enterprise, Coinbase and insurer Kinsale Capital.
Social media giant Meta Platforms and cloud computing and business software behemoth Microsoft recently pushed past an early buy point in December.
Market Backs Off Highs; Two 2 AI Stocks Flash Buy Signals
In Other Financial Markets
Long-dated U.S. Treasurys ran into some light selling. The yield on the 10-year government bond edged up three basis points to 4.3%, according to Cboe data. Crude oil futures for December delivery fell 1% to $69.59 a barrel on the NYMEX.
Gold futures sank 1.6% to $2,713 an ounce but remain up 30.9% year to date.
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