It’s no shocker, but Thursday has been another volatile trading session. Following Wednesday’s action — where the Dow Jones Industrial Average fell 800 points and the Nasdaq Composite tumbled 3% — it was a mixed session in the stock market today. It wasn’t exactly the rebound that bulls were hoping to muster given the massive declines experienced a day prior.
The stock market got off to a quick rally on the day, took an afternoon spill and then regained its footing. The SPDR S&P 500 ETF (NYSEARCA:SPY) rallied roughly 0.4%, the PowerShares QQQ ETF (NASDAQ:QQQ) was mostly flat and the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) finished higher by about 0.6%.
Movers in the Stock Market Today
Shares of Pivotal Software (NYSE:PVTL) erupted almost 70% to just over $14 after it was announced that VMWare (NYSE:VMW) intends to acquire the company at $15 per share. The interesting thing is that VMW — which is down about 7% on the announcement — is trying to get Dell Technologies (NYSE:DELL) to exchange its B shares for A shares.
General Electric (NYSE:GE) stock fell quite a bit on the day, although recovered off its lows. Shares finished lower by over 11% after a whistleblower called GE “meritless” for hiding financial problems. Accounting issues are never a good sign, and it’s no wonder investors sold the stock as a result. However, management has already disputed the claim, calling it market manipulation.
Cisco Systems (NASDAQ:CSCO) took it on the chin Thursday, falling over 8% after disappointing quarterly results. While earnings and revenue results came in ahead of expectations, guidance came up a bit short. The stock blew through all sorts of significant support levels, leaving CSCO stock flailing in no man’s land. Macro headwinds continue to create problems for U.S. companies and Cisco is the latest one.
Alibaba (NYSE:BABA) initially jumped 5% in early Thursday trading. However, the stock closed higher by about 3% after a late-session jump. The action comes after Alibaba reported a top- and bottom-line beat and showed strength in its underlying business. Analysts liked the quarter too, praising the results and maintaining price targets significantly above current levels.
(Here’s how to trade Alibaba, by the way).
What Canopy Growth (NYSE:CGC) investors would give to have the same post-earnings reaction as Alibaba. Shares are getting crushed Thursday, down about 15% after an earnings and revenue miss. A loss of $3.70 per share took investors by huge surprise, thanks to extinguishing warrants with Constellation Brands (NYSE:STZ).
However, management did not provide an adjusted earnings result, causing concern and confusion among investors. Revenue came up short too. It was a lose-lose report and now shares are at their lowest point since the start of 2019.
The demand for bonds remains intense, as the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) continues to press higher. The ETF hit a new 52-week high on Thursday and the upside volatility continues to cause investor concern in the equity market in the short term.
Key Levels to Watch
Above is a chart of the SPY ETF, representing the S&P 500. With Thursday’s afternoon decline, the August lows near $281.72 were almost tested. Buyers stepped in early enough to prevent it, but many traders are hesitant to buy without the SPY not testing the 200-day moving average.
A test of the 200-day would “clear the air” for a lot of investors, so to speak. It would also give investors a pullback down to the 38.2%. Seeing how SPY reacts to this level would help investors gauge what type of environment we’re working with.
The 20-day is now below the 50-day moving average, indicating that the short-term trend is now more bearish. If the August lows hold, see if the SPY can reclaim the 100-day moving average (not shown above) at $239.40.