The Dow Jones Industrial Average fell amid a broad stock market pullback. A Tesla (TSLA) sell-off sparked by a mooted stock sale by CEO Elon Musk intensified. Bitcoin managed move higher ahead of Coinbase (BASE) earnings. Visa (V) was the worst blue chip as PayPal (PYPL) weighed on payment stocks.
Roblox (RBLX) impressed with a bullish move, while a few stocks attempted breakouts despite the challenging action. Cybersecurity play SentinelOne (S), Bitcoin play Riot Blockchain (RIOT) and Kohl’s (KSS) are all near buy points.
The pullback is not surprising given the stock market’s unbroken advance, which lasted more than two weeks.
Continuing inflation worries did not help Tuesday’s market action. The producer price index climbed 0.6% in October from the previous month and 8.6% from a year ago. Those readings were in line with economist estimates. It was also the highest annual pace in records going back more than a decade.
Nasdaq Falls, Growth Stocks Struggle
The Nasdaq was faring worst out of the main indexes, with Tesla’s underperformance weighing it down. It dipped around 0.7%.
The S&P 500 also struggled, falling 0.4%. PayPal was the worst laggard here, with Tesla not far behind.
The S&P sectors were mixed, with utilities and real estate making the best gains. Consumer discretionary and financials were the worst laggards.
U.S. Stock Market Today Overview
Last Update: 2:58 PM ET 11/9/2021
Small caps were being hit amidst the weakness among financials. The Russell 2000 fell 0.6%.
However, it was growth stock investors who were given the worst mauling by the bears. The Innovator IBD 50 ETF (FFTY) was down 1.1%.
SiTime (SITM) edged Tesla as the worst laggard in the index, falling nearly 15%. It comes after the firm announced a follow-on offering.
Dow Jones Dips As Visa Stock Weighs
The Dow Jones Industrial Average was also struggling amidst the broader action, falling 0.5%. Visa was the biggest laggard.
Payment stocks fell in sympathy after PayPal plunged on mixed Q3 results. While earnings topped views, revenue and total payment volume missed estimates.
Fiscal 2022 revenue outlook came in light. The stock was down more than 11%, and fell to its lowest levels since November 2020.
Tesla Stock Plunges Hard; Elon Musk Stays Quiet
Tesla continued to fall hard as the high volume sell-off sparked by Musk mooting a stock sale on Twitter intensified.
The eccentric billionaire, who has suggested he will sell a 10% stake in the EV giant, was keeping quiet on social media Tuesday.
But that did not stop the stock from selling off Tuesday. While off session lows, it remained down nearly 10%.
Miller Tabak chief market strategist Matthew Maley told Bloomberg the Tesla sell-off was part of a normal and healthy pullback, a “reaction to a very overbought condition.”
Tesla stock had already looked due for a pullback after surging nearly 40% above a 900.50 buy point in only two weeks. The stock remains well extended after recently triggering the eight-week hold rule from the 900.50 cup with handle entry.
Tesla stock is also a member of the IBD Leaderboard, and is currently a three-quarter size position.
Bitcoin Gains Ahead Of Coinbase Earnings
Bitcoin was trading near record highs ahead of Coinbase earnings. The cryptocurrency was up around 1% at the $66,500 level, according to CoiuDesk.
Coinbase posts Q3 earnings after the close. Wall Street expects the company to earn $1.73 per share on revenue of $1.566 billion.
The results will follow Coinbase’s August warning of lower trading volume and active users for the quarter. This came after a drop in crypto prices and trading action, though Bitcoin has since rebounded.
Coinbase in September halted plans for a lending program after pressure from the Securities and Exchange Commission.
It has teamed up with Facebook parent Meta Platforms (FB) to help with storage services for the social media company’s new digital crypto wallet.
Roblox Stock Powers Up
Video game stock Roblox gapped up in huge volume following its latest earnings report. While it was off highs, it remained up nearly 35%.
The video gaming platform reported Q3 results that included a 31% rise in average daily active users and average bookings per daily active user of $13.49.
Roblox stock is considered a play on the emerging metaverse, which is being touted as a next-generation version of the current internet.
These 3 Stock Are Near Buy Points
Cybersecurity play SentinelOne sits around the top of its buy zone after passing a cup-with-handle entry of 70.77.
The relative strength line is spiking, but the stock’s IPO status makes it riskier. It has yet to turn a profit. Fidelity Contrafund (FCNTX), rated one of the best funds by IBD research, is a holder.
Riot Blockchain is back below its entry after gapping above the 40.90 buy point of a cup base, which formed within a larger consolidation.
Cryptocurrency-related stocks are rallying as the price of Bitcoin reaches record highs. Fundamental performance for RIOT stock is not ideal, however.
Kohl’s sits just under a double-bottom base buy point of 60.60, according to MarketSmith analysis.
The stock boasts good overall performance, with stock market performance its strongest suit for now. Retail plays have been faring well of late.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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