Stock Market Falls More Than 1% As S&P 500 Breaks This Key Level

The stock market fell in early trading Thursday as it continued a seesaw pattern that keeps frustrating investors.

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The Nasdaq composite gapped down at the open and was down 1.3%. The S&P 500 lost 1.3% also, and is below its 200-day moving average.

Stock market indexes remain volatile, making wide price swings each day and shifting direction from week to week or day to day. With direction unclear, IBD’s current market outlook is “uptrend under pressure.”

The Dow Jones Industrial Average fell 1.2%. But Dow components Walmart (WMT) and Cisco Systems (CSCO) rose after both reported earnings.

Walmart early today posted better-than-expected quarterly earnings. Walmart also gave a relatively upbeat sales forecast and plans to focus on value as consumers grapple with inflation. Shares, which sank to an 11-month low this week, rose more than 2% in big volume.

Cisco gapped up more than 4% and reclaimed its 200-day line in heavy volume. The networking equipment company beat sales and profit views and raised its sales guidance for the fiscal year ending in July.

Stock Market Still Watching Ukraine

Volume rose on the NYSE and fell on the Nasdaq compared with the same time on Wednesday.

The stock market remains largely focused on Ukraine. Western officials say Russia continues its military buildup in the region, despite stating that it has pulled back some troops. Earnings reports also continue to influence trading.

The Philadelphia Semiconductor Index fell nearly 2% following earnings reports from some key companies in the industry.

Graphics-chip maker Nvidia (NVDA) slid more than 4% in heavy volume. Late Wednesday, the company beat expectations for its January-ended quarter as data-center processor sales boosted results. Nvidia also guided higher for the current quarter.

Despite Thursday’s loss, the stock has been rebounding off its 200-day moving average. Still, Nvidia was the worst-performing stock in the IBD 50 today.

Chip-equipment maker Applied Materials (AMAT) topped expectations for its January quarter but gave guidance below estimates. The stock climbed at the open but reversed lower. It was down nearly 2% in active trading.

Technology, financials and transportation sectors saw losses of 1%. None of the 11 S&P sectors climbed so far this morning.

IBD 50 Underperforms Stock Market

Innovator IBD 50 ETF (FFTY) tumbled 1.6%.

NMI Holdings (NMIH) slid below its 21-day exponential moving average. The stock is back below its 25.70 buy point, which already has been a challenge for NMI. Earlier today, Keefe, Bruyette & Woods downgraded the stock from outperform to market perform, but raised the price target from 26.50 to 27.50. The stock reversed lower Wednesday after a mixed quarterly report.

There were no major moves in the index, but a number of stocks are forming bases. Those include Simply Good Foods (SMPL), Arista Networks (ANET), Mueller Industries (MLI) and Commercial Metals (CMC), which is on Wednesday’s IBD 50 Stock to Watch.

Stock Market Watches Jobless Claims, Housing Data

In economic reports, jobless claims rose to 248,000 in the latest report from a revised 224,000 the previous week. The new number was well above the 224,000 economists had forecast, according to Econoday.

Bankrate.com Senior Economic Analyst Mark Hamrick said the number of new claims defied expectations for improvement. “Even so, one would not construct a new trend out of one week’s movement, particularly given the generally low level of new claims overall and with unemployment at 4%.” In a bright spot, continuing claims dropped to 1.59 million.

Housing starts in January fell more than 4% to 1.638 million, below the consensus estimate of 1.708 million. Jennifer Lee, Senior Economist, BMO Capital Markets, said a decline was expected but the size of the drop was larger than expected.

“Nothing terribly shocking there. But what was very interesting was the unexpected increase in building permits,” she noted. Permits rose for the fourth straight month, to 1.899 million units, the highest since May 2006. Econoday’s consensus forecast was 1.760 million permits.

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