The stock market today suffered a bearish reversal, and the Dow Jones Industrial Average's mild gains fizzled fast in late-afternoon trading Thursday. The blue-chip index also extended its losing streak to four sessions, falling more than 3% over that period. Other major equity indexes also reversed lower as volume accelerated ahead of a fresh monthly report on the U.S. labor market.
The Dow at one point jumped almost 300 points, or more than 0.7%, but then slumped more than 570 points, or 1.5%. It closed the day off nearly 1.4% at 38,596. The 30-stock blue chip index clipped the 50-day moving average for the first time this year, another negative sign.
The Nasdaq had outperformed the Dow Jones with a 1.1% advance early, but later reversed sharply for a 1.4% loss, its biggest drop since a nearly 1.7% slide in higher volume on March 5. The composite index ended the rough session at 16,049 and cut its gain since Jan. 1 to 6.9%.
The S&P 500 climbed as much as 0.8% before swinging 1.2% lower to 5,147. The large-cap benchmark sawed right through its 21-day exponential moving average for the first time in nearly three months.
Magnificent Seven Update
Meanwhile, all but two of the Magnificent Seven stocks also turned lower.
Meta Platforms rose 0.8%, but it had gained more than 4.5% intraday. AI and accelerated computing technology leader Nvidia backed off session highs to lose 3.4% in volume that ran 21% below average. The fabless chip megacap, at 859, now trades 12% below its all-time peak of 974. Google parent Alphabet, a recent breakout stock, stumbled 2.8% to 150.53. Volume edged 5% above its usual level.
Volume was initially mixed on the main exchanges. But by day's end, turnover sped 10% higher to 4.08 billion shares on the NYSE and grew 4.3% to 5.37 billion shares on the Nasdaq, official Dow Jones market data showed.
Such substantial declines in higher turnover point to another day of distribution, or unusually heavy institutional selling.
The Dow Jones blue chip index marked a session high of 39,421, up almost 0.8%, before sinking hard during the final two and a half hours of trading in the stock market today. The losses cut the Dow's year-to-date advance to 2.4%.
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Money flowed back into safe-haven government bonds for the second straight session. The benchmark 10-year U.S. Treasury bond closed the session at 4.30%, down 4 basis points and well off its session high of 4.38%.
IBD's The Big Picture column in recent days has emphasized that although the number of distribution days remains high within the 25-session count, the stock market has been able to weather such blows. However, Thursday's nasty reversal displayed a more negative tone than recent drops.
After the close, Japanese cuisine chain Kura Sushi jumped more than 4% after posting quarterly results. The stock posted a fifth straight loss, off 0.3%, in the regular session to 103.85.
KRUS has fallen below a 108.22 buy point in a long cup with handle, yet remained above its rising 50-day line.
Kura Sushi posted a larger net loss of 9 cents per share in the February-ended fiscal second quarter, larger than expected on Wall Street but a penny less than the year-ago quarter. Revenue jumped 31% to $57.3 million, above the consensus estimate.
Prior to the report, analysts polled by FactSet saw earnings soaring 166% in the fiscal year ending in August to 37 cents a share and growing another 104% in FY 2025 to 76 cents.
Jobs Report Looms
Bloomberg reported on Thursday afternoon that at least one more Federal Reserve official, Minneapolis Fed chief Neel Kashkari, voiced the possibility that the U.S. central may not need to reduce interest rates this year to ward off a potential economic slowdown while keeping inflation contained.
Investors are eager to see the March nonfarm payrolls report on Friday before the open. In February, the jobless rate edged up to 3.9%. That is not expected to change, while economists see 200,000 jobs created in the past month. That's down from 275,000 new job additions in February.
Outside the stock market, gold futures traded as high as $2,325 an ounce, then lost those gains, down 0.2% to $2,310. Yet gold is shining with a nearly 12% gain year to date.
Gold tracking exchange traded fund SPDR Gold Trust broke out of a two-month double-bottom base — a bullish chart pattern for savvy investors — on March 1. Now it's on pace to rally for six out of seven weeks. The ETF, down 0.6% in heavy volume, has advanced as much as 3.7% this week.
Silver ended 0.3% lower to $26.99 an ounce. On Wednesday, it reached $27.45, the highest level since March 2022. Meanwhile, copper shot 1.2% higher to as high as $4.25 a pound before easing to $4.21. The industrial metal is now up 8.7% since Jan. 1, indicating global copper demand may be recovering in the wake of positive manufacturing data from both China and the U.S.
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Elsewhere, Meta, a half-size position in IBD Leaderboard, at one point jumped more than 4%. Jefferies hiked its price target on the Facebook and Instagram parent to 585 from 550.
At one point, fellow megacap tech Nvidia breached 900, reaching as high as 906.33. Yet after Thursday's 3.4% slide, NVDA slipped below support at the 21-day exponential moving average.
Alphabet, the Google search engine operator, fell nearly 3%. Reports said the web search and cloud computing titan is considering a paid service that incorporates artificial intelligence software.
Alphabet is struggling to coast past a new base with a buy point at 153.78 after its recent breakout. But Google stock has not fallen much below the entry in its cup without handle. And shares are leading the 50-day moving average higher this past month, a bullish sign.
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Reports that Alphabet is interested in purchasing marketing software firm HubSpot sent the latter's shares cruising past a new buy point at 660. HubSpot pulled back from Thursday's intraday peak yet still rose 5% to 657.85, sharply outperforming the stock market.
HubSpot formed a flat base while finding support during pullbacks to the rising 50-day moving average. The proper buy zone goes from 660 up to 693.
Before Thursday's price spurt, HubSpot held an enviable 95 Composite Rating on a scale of 1 to 99. You can see all of IBD's stock-selection ratings, including the Composite, at IBD Stock Checkup.
After the market close, HubSpot's Composite Rating rose to a 97.
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Salesforce Leads Dow Industrials Lower
Within the Dow Jones, 20 of the 30 components slumped 1 point or more, or two-thirds of the index.
Salesforce, the enterprise software giant, led the downside. It fell more than 3% in heavy volume. The cloud-based software innovator is facing a critical test of demand at the rising 50-day moving average.
The megacap tech has risen as much as 34% after clearing a four-month base with a 238.22 buy point on Nov. 30.
Other Dow Jones stocks that fell the hardest on a point basis: Goldman Sachs (off 1.9%, yet still trading above its rising 21-day exponential moving average); charge card giant American Express (down 2.8%, clipping its 21-day line); Amgen (-2.3%, closing below its long-term 200-day moving average to fall 7% since Jan. 1); and construction and mining equipment behemoth Caterpillar (-1.6%, but owning the highest Relative Strength Rating within the Dow industrials at 93).
Also in the stock market today, San Francisco-based Levi Strauss continued its impressive recovery. Shares finished at the low end of the intraday range, yet still soared 12% following February-ended quarterly results that came in better than expected. Volume zoomed 13 times average to the highest level in more than a year.
The jeans and casual apparel firm saw profit fall 24% to 26 cents a share as sales slipped 8% to $1.56 billion. However, Wall Street is expecting a robust rebound in the bottom line, with earnings expected to jump 166%, 35%, 20% and 25% over the next four quarters.
Watch for potential upside revisions by sell-side research analysts. Currently, Wall Street sees Levi's earnings to rebound 15% in fiscal 2024 (ending in November) to $1.27 a share and up another 12% in FY 2025 to $1.42. In fiscal 2023, the bottom line fell 27% to $1.10.
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ConAgra Bucks Stock Market Dip
ConAgra Brands also led the upside on the stock market today. The packaged-foods titan gapped up and rallied more than 5% on fiscal third-quarter numbers. Earnings fell 9% to 69 cents a share in the February-ended quarter, 4 cents above views, on a 2% decline in sales to $3.03 billion. Wall Street expected $3.01 billion. But ConAgra also gave a slightly brighter earnings outlook of $2.60-$2.65 a share for the fiscal year ending in August, vs. Wall Street's estimate of $2.60.
The stock rose back above its 200-day moving average and rushed past resistance near 30. Volume grew 180% above normal levels.
The daily chart highlights a 3-1/2-month base that features the elements of a double bottom and a 29.89 entry. ConAgra is in buy range from this buy point; that range goes up to 31.38.
However, industry compatriot Lamb Weston got creamed with a 19% drop in heavy trade. MarketWatch reported that the company's slower-than-expected implementation of a new enterprise resource planning software system hit its third-quarter adjusted earnings. The supplier of frozen french fries and hash brown potatoes also cut its fiscal 2024 sales outlook.
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