October 2, 2023

Dow Jones falls on strong jobs data; Hot AI Stock C3.ai crashes 24% on earnings

The Dow Jones Industrial Average fell Thursday on key economic data, with the release of the ADP’s employment report and the Labor Department’s weekly jobless claims. Meanwhile, hot AI stocks C3.ai (AI) crashed as much as 24% after its first quarter earnings report.


ADP’s employment report showed job growth of 278,000 in May, much stronger than the forecast figure of 160,000, but still slightly lower than April’s figure of 296,000. ADP’s report is a precursor to Friday’s job numbers from the Labor Department.

Meanwhile, initial jobless claims rose to 232,000, slightly short of the forecast of 235,000 versus 229,000 the previous week.

Furthermore, the PMI manufacturing index is expected at 9:45 am. Finally, Wall Street expects May’s ISM manufacturing index to fall to 47.0 from April’s 47.1 reading. The ISM is out at 10am

C3.ai, which announced some fiscal fourth-quarter results in mid-May, issued a full-year 2024 revenue forecast that beat analyst estimates. The stock was up more than 20% this week, but is about to lose the most.

Other major revenue movers include Tough (CHWY), CrowdStrike (CRWD), NetApp (NTAP), Nordstrom (JWN), Okay (OKTA), Sales team (CRM) and Veeva Systems (VEEV).

Chewy shares rose 20% as CrowdStrike reported April quarterly earnings and revenue that beat analyst estimates. CRWD shares fell 8.5% as growth slowed in a key metric, annual recurring revenue.

NetApp was up more than 6% in early trading, while Nordstrom shares rose 9.3%.

CRM shares sold nearly 8%, while Veeva shares rose 13%. Also, Okta fell 19% in early morning trading.

Fair today

Lucid engines (LCID) lost 13% after announcing a $3 billion equity offering and separate private placement. Giant of electric vehicles Tesla (TSLA) was trading nearly 1% higher Thursday morning. Dow Jones tech giants Apple (AAPL) and Microsoft (MSFT) were lower after today’s market open.

Arista Networks (ANET), IBD Leaderboard Share ASML (ASML), Cloud Flame (NET) and Taiwan semiconductor (TSM) – as well as Dow Jones stocks Boeing (BA), Cisco systems (CSCO) and Sales team (CRM) – are among the best stocks to buy and watch in the uptrend of the stock market.

Arista was a recent IBD Stock Of The Day, while ASML and Salesforce are IBD Leaderboard stocks. And Cisco was featured in this week’s Stocks column near a buy zone.

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Dow Jones Today: Oil Prices, Treasury Yields

After Thursday’s opening bell, the Dow Jones Industrial Average fell 0.4%, while the S&P 500 lost 0.1%. The tech-heavy Nasdaq composite closed lower in morning action.

Among US exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) fell 0.1%, while the SPDR S&P 500 ETF (SPY) fell 0.15% early Thursday.

The yield on 10-year US Treasury bills fell to 3.58% on Thursday. On Wednesday, the 10-year interest rate fell sharply for the second day in a row.

US oil prices fell Thursday morning, extending this week’s losses. West Texas Intermediate futures lost 0.5% on Thursday, pushing West Texas intermediate futures below $68 a barrel.

Stock market action

On Wednesday, the Dow Jones Industrial Average lost 0.4%, while the S&P 500 lost 0.6%. The Nasdaq composite also lost 0.6%, slightly less than its 2023 highs.

Wednesday’s Big Picture column noted, “So for tech investors, the first five months out of a tacky 2022 should feel a lot nicer. But in this tale of two stock markets, blue chips outside of the tech realm are really mixed.”

This is an important time to read IBD’s The Big Picture column following the recent bullish shift in the market’s outlook.

Five best Dow Jones stocks to buy and watch right now

Dow Jones Stocks to Buy and Watch: Cisco, Boeing, Salesforce

Dow Jones networking giant Cisco Systems is building a cup base with a buy point of 52.66. Keep an eye out for a possible entry, which would reveal a previous entry. CSCO shares fell 1% on Wednesday, completing a three-day profit streak. CSCO shares fell 0.4% on Thursday.

Dow Jones aerospace giant Boeing climbed 0.5% on Wednesday and closed above the 50-day mark again. Stocks are still flat with a buy point of 221.43, according to IBD MarketSmith pattern recognition. BA shares rose 0.6% early Thursday.

According to Leaderboard analysis, Salesforce surged past alternate entries at 194.01 and 200.10 in recent weeks. Meanwhile, the relative strength line reached a new high on Wednesday, a bullish signal. Shares hit the 20% profit zone off a 178.94 cup handle entry, so investors would be justified in taking some profits ahead of the company’s first-quarter results late Wednesday.

CRM shares plunged more than 6% Thursday morning. Last Wednesday, Salesforce reported earnings and revenue for the April quarter that beat analysts’ estimates as operating margins improved amid cost-cutting driven by activist investors. The revenue outlook is lined only by views.

4 Top growth stocks to watch Stock market rally

Best stocks to buy and watch: Arista, ASML, Cloudflare, TSMC

Network giant Arista Networks fell sharply below its buy point of 171.54 during Wednesday’s 4.6% decline, according to IBD MarketSmith pattern recognition. ANET shares gained 0.5% Thursday morning.

IBD Leaderboard stock ASML remains just outside the buy range after a buy point of 683.28 in a handle cup, despite Wednesday’s drop of 0.7%. ASML rose 0.6% on Thursday.

Cybersecurity leader Cloudflare broke out on Wednesday after a buy point of 66.30 in a double bottom. Shares closed in the 5% buy territory, which runs to 69.62. NET shares fell 1.7% on Thursday, lower in sync after CrowdStrike and Okta earnings.

Chip foundry Taiwan Semiconductor fell 3.3% on Wednesday, falling back into the buy range past the buy point of 95.92 with a double bottom. The 5% buying area extends to 100.72. TSM shares rose 1% Thursday morning.

Learn how to time the market with IBD’s ETF market strategy

Best stocks to buy and watch in stock market rally

Here are the top four stocks to buy and watch in the current stock market, including two Dow Jones leaders.

Company Name Symbol Correct point of sale Point of sale type
ASML (ASML) 683.28 Cup with handle
Sales team (CRM) 200.10 Consolidation
Boeing (BA) 221.43 Flat base
Arista Networks (A NET) 171.54 Cup base
Source: IBD data as of May 31, 2023

Join IBD experts as they analyze leading stocks in the current stock market rally on IBD Live

Tesla stock

Tesla shares rose 1.4% on Wednesday, closing in on a cup base’s 207.89 buy point. The stock is above the long-term 200-day line for the first time since Sept. 21. Shares closed Wednesday down 35% from their 52-week high.

TSLA shares appeared to add to Wednesday’s gains, rising nearly 1% Thursday morning.

Dow Jones leaders: Apple, Microsoft

Among Dow Jones stocks, Apple stocks fell lower on Wednesday, posting a four-day profit streak after hitting a new 52-week high of 179.35. The stock remains sharply above a buy point of 157.48, falling outside the buy range that rose to 165.35. AAPL shares fell 0.1% in morning trading Thursday.

Microsoft shares reversed from new highs and fell nearly 0.9% on Wednesday. They traded as high as 335.94. Stocks have hit the 20%-25% gain zone from a 276.86 flat-base buy point, so investors could at least take some profit here. On Thursday morning, MSFT shares fell 0.8%.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more information on growth stocks and the Dow Jones Industrial Average.


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