The Dow Jones Industrial Average fell back from record levels as stocks pulled back following a weak earnings report from Amazon.com (AMZN). Procter & Gamble (PG) was the top blue chip, while China EV stocks, including Nio (NIO), rallied. American EV giant Tesla (TSLA) also rose.
Breakouts were hard to come by in a tough day for growth stocks. However, solar play Enphase Energy (ENPH) moved above a new aggressive buy point.
Nasdaq Falls Back As Growth Stocks Get Caned
The Nasdaq composite was faring the worst out of the major indexes, dipping about 0.7%. Atlassian (TEAM) was making a tremendous gain of more than 22% on strong earnings as more businesses move to the cloud. EBay (EBAY) was a big laggard, dipping around 7%.
The S&P sectors were mixed, with real estate and health care making the best gains. Consumer discretionary was lagging following Amazon’s beatdown.
U.S. Stock Market Today Overview
Last Update: 2:49 PM ET 7/30/2021
Small caps were getting beaten down by the bears, with the Russell 2000 falling 0.9%.
However, it was growth stocks that got the biggest caning, with the Innovator IBD 50 ETF (FFTY) down 1.4%. The loss comes after an 8.7% jump last week.
Dow Jones Dips As PG Pops
The Dow Jones Industrial Average fared best out of the major indexes, but was still down about 0.5%. It had been trading near record levels.
Procter & Gamble was the top Dow Jones component, rising more than 2% after revenue growth accelerated a touch from Q1. It rose 7% to $18.9 billion vs. a 5% top-line increase in the first quarter.
Caterpillar (CAT) was the biggest Dow laggard, dipping more than 3%.
Amazon Stock Slammed
Amazon stock was getting hammered following disappointing earnings, slipping more than 7%.
While it found support at the 200-day line, it gapped under its 50-day moving average. The relative strength line also dipped hard. Volume was massive.
The e-commerce giant reported Q2 adjusted earnings that topped views. But its sales missed, and Amazon issued a disappointing Q3 forecast.
Amazon stock is on pace for its largest daily percent decrease since May 1, 2020, when it fell 7.6%. AMZN stock is on track to post a weekly dip of almost 9% for the week. This would put it on pace for worst week since Feb. 28, 2020, when it fell 10.13%.
Nio Stock, China EV Plays Rally
China EV stocks were rallying, with Nio gaining more than 4%. The move was enough to see it rise above its 50 and 200-day moving averages. But there’s no new buy area so far.
Nio announced Friday that it will report for the second quarter Aug. 11. And a local unconfirmed Chinese report said Nio would release new, cheaper model from a “sub-brand” next year.
Xpeng Motors (XPEV) was faring even better, popping by about 7%. Li Auto (LI) was doing best of all, charging more than 8% higher. Neither stock is in a proper base so far. They rallied despite Beijing continuing to rein in the tech sector.
Meanwhile, Tesla was also turning in a gain of just over 1%. The EV giant is trying to rally back after slipping on earnings earlier this week.
This New Leader Passes Buy Point
Enphase Energy rose above an aggressive buy point near 181 after rallying above a very short trend line.
The move saw the stock added to the prestigious Leaderboard list of leading growth stocks. The solar energy technology specialist has been rising following Tuesday’s earnings report. The stock is now looking to move above a handle buy point at 196.12.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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