Dow Jones collapses as market sells, but software stocks remain strong


Shares remained volatile at noon on Wednesday as the Dow Jones Industrial Average fell nearly 300 points, but (CRM) and Microsoft (MSFT) recorded small gains.


Dow Jones Industrials fell 0.9%, the S&P 500 fell 0.8% and the Nasdaq composite edged down 0.4% in the stock market today. Small caps followed by the Russell 2000, down 1.3%, lagged behind. Volume was higher on both major exchanges compared to the same time on Tuesday.

Among the exchange traded funds, Innovator IBD 50 (FFTY) fell 0.9%, while the Nasdaq 100-tracking Invesco QQQ Trust (QQQ) was basically flat. The IBD 50 ETF, which fell below its 50-day moving average last week, still finds support at its 200-day line.

The US economy continues to recover from the Covid-19 pandemic, which triggered nationwide lockdowns more than a year ago. A resurgence of cases fueled by the more contagious delta variant has recently started to slow as vaccinations increase.

Cumulative Covid-19 cases worldwide have exceeded 237 million, with more than 4.8 million deaths, according to Worldometer. In the United States, cases are approaching 45 million with nearly 725,000 deaths.

Growth stocks to watch

Snowflake (SNOW) rose 2% as it found support at its 50-day moving average. It has been holding at or above the 50-day line since mid-May, although this is the line’s first pullback since breaking through a grip entry on August 26. Snowflake stock is around 28% of its 52 week high as it recovers from a strong correction. The September 2020 initial public offering raised $ 3.4 billion and set a record as the largest software IPO in the United States.

Snapshot of the US Stock Market Today

Index symbol Price Loss of profit % Switch
Dow jones (0DJIA) 33994.86 -319.81 -0.93
S&P 500 (0S & P5) 4311.93 -33.79 -0.78
Nasdaq (0NDQC ) 14372.04 -61.79 -0.43
Russel 2000 (IWM) 218.18 -2.84 -1.28
MICI 50 (FFTY) 46.35 -0.16 -0.34
Last Modified: 12:12 PM ET 10/06/2021

Acuity marks (AYI) widened and jumped 11% in significant volume to pass a buy point of 194.69 on a 22-week consolidation. The maker of commercial lighting products reported strong fourth quarter earnings growth. Revenue was also on target, and Acuity said the price increases offset rising costs.

More in the MICI 50, oil drilling technology company ChampionX (CHX) slipped 6% to test its 50-day moving average. The stock has consolidated over the past four months and is trading around 24% below a buy point of 30.58.

Callon Oil (CPE), Wesco International (COE) and Atkore (ATKR) fell by more than 3% each.

Corn Cloudflare (REPORT) climbed more than 5% in rapid turnover, on course to extend its winning streak to five. Stocks regained the 50-day line after losing support last week. They are also back above a tight three-week entry of 122.87, according to MarketSmith chart analysis.

In Mode (INMD) rose 4% in a twice normal trade after finding support at its 10 week line. But that didn’t make it possible to buy or add any stocks, as the stock has already rebounded several times. InMode is at 7% of its high and remains well extended from a point of purchase of 43.60 of a cup with handle.

Among the other IBD 50 laureates, Upwork (UPWK), Datadog (DDOG), SiTime (SITM) and TaskUs (TASK) added more than 2% each.

Software stocks are outperforming. The iShares Expanded-Tech Software ETF (IGV) is in place for a second consecutive day.

Dow Jones Movers

Dow Inc. (DOW) led the decline on the blue chip index with a sharp 4% drop in volume. The chemicals giant’s stock traded below its 50 and 200-day lines for much of the past month.

American Express (AXP) and Cisco Systems (CSCO) fell by more than 2% each, while caterpillar (CAT), Merck (MRK) and Travelers (VTR) dropped out about 1.5% each.

American Express is working on the handle of a mug base with a buy point of 178.90. The shares are about 4% of the new entry.

Merck, which fell nearly 2% on Tuesday, continued to decline on Wednesday. Stocks widened on Friday and climbed more than 8% to erase a 79.33 buy point on a flat basis. That day, Merck said its Covid pill halved the risk of hospitalization in an end-stage study. and Microsoft, up 0.5% and 0.3% respectively, were among the few Dow stocks to avoid liquidation. Microsoft continues to trade below its 50 day line. A new flat base is forming with a buy point of 305.94.

Follow Nancy Gondo on Twitter at @IBD_NGondo


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