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The Dow Jones Industrial Average reversed slightly higher while the S&P 500 rallied out of official bear market territory. Tesla (TSLA) dived amid reports about alleged sexual misconduct by CEO Elon Musk. Apple (AAPL) rallied while Boeing (BA) fell hard.
It is always important to look for stocks showing strength for one’s watchlist as the market struggles. In this case, energy was once again a relatively bright spot, with oil driller Noble (NE) and natural gas play Western Midsteam (WES) building bullish bases.
X
Volume was down on both the Nasdaq and the New York Stock Exchange compared with the same time Thursday. This was at best a crumb of comfort.
Meanwhile, the yield on the benchmark 10-year Treasury note fell 7 basis points to 2.79%. West Texas Intermediate crude climbed 0.5% to nearly $113 per barrel.
The S&P 500 made headlines by officially dipping into bear market territory — a decline of more than 20% from prior highs. But it managed to close above this level after ending the day flat. Ross Stores (ROST) cratered on earnings, falling more than 22%. This made it the index’s worst performer.
The tech-heavy Nasdaq also fought back, but still gave up 0.3%. Dollar Tree (DLTR) was one of the losers here, sloing down 5.7% as pressure on retail stocks continued.
U.S. Stock Market Today Overview | ||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31260.58 | +7.45 | +0.02 |
| S&P 500 | (0S&P5) | 3901.37 | +0.58 | +0.01 |
| Nasdaq | (0NDQC ) | 11354.62 | -33.88 | -0.30 |
| Russell 2000 | (IWM) | 176.28 | -0.25 | -0.14 |
| IBD 50 | (FFTY) | 29.93 | -0.22 | -0.73 |
Last Update: 4:12 PM ET 5/20/2022 | ||||
The S&P sectors were mixed. Consumer discretionary, industrials and materials fared worst. Health and real estate, defensive areas, made the best gains.
Small caps finished the day in negative territory, with the Russell 2000 sliding 0.1%.
But it was growth stocks that got the worst mauling from the bears. The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, skidded 0.7%.
The Dow Jones Industrial Average closed basically flat after rallying into slight positive territory. The fractional gain was a relief for investors though after earlier losses.
Apple had been one of the index’s losers but managed to reverse higher. It closed up 0.2%. The stock closed down 6.5% for the week, according to MarketSmith.
But it was Boeing that was suffering most on the Dow Jones today. It finished the session down 5.1% as it lost more ground on its moving averages.
Cisco Systems (CSCO) ended the day as the top performer on the Dow Jones, rising 2.9%.
Before Friday, it was fears a takeover of Twitter (TWTR) could distract Elon Musk that weighed on Tesla stock.
But that changed after Business Insider reported his space exploration firm SpaceX paid a $250,000 severance to a flight attendant after she made a sexual misconduct claim against Musk.
The eccentric executive later took to Twitter to say the “wild accusations” against him are untrue. He also joked that people can now “use Elongate as scandal name.”
It was no laughing matter for owners of Tesla, though. It was one of the worst performing stocks of the day, closing down 6.4% despite a late rally.
Its market cap got knocked down to just under $690billion. It has lost almost a quarter of its value so far in May.
Meanwhile, the Donald Trump SPAC Digital World Acquisition (DWAC), which is set to take public the former president’s social media network Truth Social, closed up 2.2%. This was relative outperformance.
Cybersecurity stock Palo Alto Networks was a standout as it surged on earnings. It beat Wall Street views on both the top and bottom lines. Billings came in at $1.8 billion, up 40% from a year earlier, compared with estimates for $1.6 billion.
Crucially, it also hiked its outlook for the current quarter. Palo Alto expects per-share earnings in a range of $2.26 to $2.29. That’s on revenue of $1.54 billion.
The stock remains rooted below its 200-day moving average despite rallying 9.7%.
Amid other stocks in the cybersecurity industry group, Fortinet (FTNT) popped 3.7%, CrowdStrike (CRWD) jumped 4.3% and Zscaler (ZS) gained 3.5%.
Noble is forming a base-on-base pattern. The ideal buy point here will be 36.89, according to MarketSmith analysis.
Nevertheless, the stock is slipping further below the 50-day moving average, which is not ideal. It remains in the top 4% of stocks in terms of price performance over the past 12 months.
One reason to be bullish on the Swiss provider of offshore contract drilling services is the performance of energy stocks so far in 2022. The Vanguard Energy Index Fund ETF (VDE) is up almost 40% in 2020.
Western Midstream is another stock to keep tabs on as it forms a choppy consolidation. The ideal entry here is 27.39. It could also be interpreted as a base-on-base formation.
The stock is holding above its 50-day line while the relative strength line is at new highs, a bullish sign. Earnings are a strength. It boasts an EPS Rating of 83 out of 99 and earnings are seen spiking 38% in 2022.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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