Dow Jones Falls Amid Hot GDP, Other Data; AI Play Soars After Earnings

Dow Jones Industrial Average dropped 0.1% amid hot economic reports, while other indexes continue to fall. The blue-chip index is below the key moving averages. A 50-day line that slopes downward is a sign of additional weakness.

Today, the S&P 500 dropped 0.4% on the stock market. The Nasdaq was underperforming with a loss of 0.9%. Both indexes are below their 200-day moving averge.

The volume on the NYSE was higher than the same time Wednesday.

The Russell 2000 small-cap index rose 0.6%. The Innovator IBD ETF (FFTY), which tracks the 50 most innovative companies in the world, fell 0.6%.

Crude oil dropped 2% to $83.61 per barrel.

Following economic data, the yield on the benchmark 10-year Treasury Note fell by 3 basis points to 4.91%.

Initial claims for unemployment rose from 198,000 to 210,000 in the week ending Oct. 21. This is above expectations of 208,000. Prior week's claims were revised from 198,000 to 200,000. The consumer spending has continued to grow, as shown by the third-quarter GDP. This was higher than expected at 4.2%, and twice that of Q2.

Econoday reports that orders for durable goods by manufacturers rose 4.7% in September, compared to the consensus estimate of 1%.

The UAW struck workers reached a tentative agreement with Ford (F), which may be the model for an agreement with Stellantis and General Motors. This deal also includes a 25% pay increase over 4.5-years. The members have yet to approve the deal as Ford workers are returning after six weeks.

Ford's stock has lost most of its early gains. After the close of the market, Ford reports its earnings.

Housing data shows that pending home sales rose by 1.1% in September, against expectations of a 1% drop and following August's 7.1% plunge.

Dow Jones Stocks

Apple (AAPL), which is due to release its earnings next week, has fallen below the 200-day moving median for the first since March 2.

Microsoft (MSFT), after a huge earnings surge on Wednesday, is close to a buy-point of 340.86. The stock dropped 1.5% on Thursday. Merck (MRK), a pharmaceutical company, jumped 3% to reclaim the 50-day line. The drugmaker announced third-quarter results, raised its sales forecast for the full year to $60 billion, and revised its midpoint earning estimate to $1.36 a share.

Stocks moving today

Meta Platforms, the parent company of Facebook (META), fell below 50-day line in spite of strong revenue and earnings. Views were also higher. The shares fell on the late-Wednesday conference call after the company mentioned uncertainty regarding its advertising segment. This is a major contributor to revenue.

Align Technology (ALGN), after its earnings, fell by over 24 %. Sales in the third quarter rose 7.8%, but earnings per share of $2.14 were less than $2.22 from a year earlier. The company anticipates a seasonal decline in the fourth-quarter, compounded by the Middle East crisis and supply risks.

Mobileye and Nextracker, two of the newer issues that have reported results, are Mobileye (MBLY), and Nextracker NXT. Mobileye saw its 3Q revenue increase 18% due to a combination of volume and pricing. However, earnings of 22 cents were 47% higher than the previous year. The company reduced its full-year midpoint sales forecast but increased its profit outlook. MBLY shares rose, retaking the 50-day line.

Nextracker, a manufacturer of solar equipment, reported a 23% increase in sales. It also raised its earnings and sales targets for the entire year. NXT soared, but lost most of its gains by mid-morning.

ServiceNow Mastercard

ServiceNow (NOW) has seen its subscription revenue grow by 27%. The AI company expects to generate 26% in subscription revenue for the entire year. The IBD 50 component shares are returning to the 50-day line with a new entry of 614.36.

Mastercard (MA), outside of the Dow Jones Index, gapped below its 20-day line. The company gave a weak outlook for growth after reporting 11% revenue growth and 14% earnings increase in Q3. Stock has fallen 4.5% below its base.